New York Gov. Kathy Hochul is including funding to help school districts secure students’ cell phones as part of her $252 billion state budget proposal released on Tuesday.
The plan would direct school districts to come up with their own policies to separate students from mobile devices “from bell to bell,” said Blake Washington, Hochul’s budget director. The Democratic governor has said for months that she wants children to put down phones at school.
The proposal is one piece of an omnibus spending package the governor put forth on Tuesday, kicking off a process in which the state passes much of the year’s most important legislation. In the coming weeks, the state Senate and Assembly will offer their own proposals. They and Hochul will negotiate any differences before a final budget is voted on and signed.
This year’s budget proposal reflects relative financial health for New York, Washington said. State officials last fall were projecting a roughly $1 billion deficit for the coming fiscal year, which begins on April 1. But a better-than-expected economy — including strong profits by Wall Street firms — have brightened the fiscal picture.
The result is a $5.3 billion surplus that Hochul is proposing to spend on rebate checks for taxpayers (totaling $3 billion this year), an income-tax cut to be phased in over the next two years and an expanded child tax credit, among other items.
“This budget is laser-focused on putting money back in New Yorkers’ pockets,” Hochul said.
Tax rates would eventually fall by two-tenths of a percentage point for joint filers reporting less than $323,000 in income, Washington said. Hochul previously said this would result in “hundreds” of dollars of savings.
The governor’s budget proposal includes a planned 4.7% increase in school aid, as well as more money for Medicaid, which provides health care for low-income people.
Higher costs for Medicaid, which is jointly funded by the state and federal governments, burst beyond the levels allocated in last year’s state budget. Washington said some of the higher spending was due to the expiration of COVID-related federal aid programs, along with the fact that about 900,000 more people have enrolled in the program since before the pandemic.
Hochul is turning away from her proposal last year to overhaul the formula by which school aid is distributed, which could have reduced funding to some districts as the number of pupils dropped. She also wants to offer grants totaling $13.5 million to school districts to defray the cost of securing cell phones.
Andrew Rein, president of the fiscal watchdog Citizens Budget Commission, said the surplus funds could be directed in ways that would help the state save more money in the long term. But he acknowledged it is more popular to send checks to voters than fix sewers or pay down debt.
“This is an election-year budget starting a year early,” Rein said.
Perennial fights over issues like school foundation aid and funding for social service programs tend to dominate the governor’s negotiations with legislators in the state Assembly and Senate, both of which are controlled by Hochul’s fellow Democrats.
Assembly Speaker Carl Heastie, a Democrat from the Bronx, said he thought Hochul’s proposal was a good starting place.
“The hell is in the details,” he said. “ But I would say this budget is a great start. There's not anything that jumps out to me that's problematic.”
Washington said Hochul would extend for five years higher tax rates on people reporting more than $1 million in income. That surcharge, which was enacted in 2021, means millionaires living in New York City currently pay the highest level of combined state and local income taxes in the nation.
Republicans faulted Hochul for doing little to restrain spending. Assemblyman Ed Ra, a Republican from Nassau County, noted that there are growing deficits over the next several years, including an $11 billion projected shortfall in 2029.
“Tax receipts have been very strong. That's a good thing. But my fear is, what happens when the bottom drops out?” Ra said.
Progressive groups say tax hikes are politically popular and could help make the governor’s proposals for child tax credits and universal school meals more sustainable over time. Michael Kink, executive director of the Strong Economy for All Coalition, said doing so would help Hochul claim the mantle of populism.
“Democrats need a real fight against real villains,” he said. “Taxing the super-rich and wealthy corporations, redistributing that wealth into tax breaks and tax credits and robust funding for services for regular working people, I think that’s a recipe for success.”
The proposed budget doesn’t include any new money for New York City to defray the cost of caring for asylum seekers, but Washington said there are resources that were already appropriated and could still be spent.
Hanging over the state’s budget is the threat of federal cuts to programs like Medicaid. Washington said if Congress enacts major changes, New York would face difficult choices.
Hochul said citizens should focus their voices on Congress to preserve programs amid a “cloud of uncertainty.”
“New York and other states will simply not be able to shoulder these costs on our own,” she said.
Text by Jimmy Vielkind; audio report by Jeongyoon Han.
