Gov. Kathy Hochul announces tentative deal for $229 billion state budget

ALBANY — Gov. Kathy Hochul on Thursday said she and legislative leaders have reached a tentative agreement for a $229 billion budget for 2023-24 that would give judges more discretion in setting bail and exempt suburban counties from an increase in the MTA payroll tax.

“A conceptual agreement has been reached,” Hochul said at a news conference Thursday night.

“This is a blueprint for the future of New York,” she said. “What is important is not a race to a deadline but a race to results.”

Hochul won a change in the state’s bail law after lawmakers agreed to remove a provision telling judges to use the “least restrictive means” to ensure defendants will return to court when deciding whether bail should be applied. The change will apply only to bail-eligible offenses.

The budget will also provide $40 million each for public defenders and for prosecutors as well as a higher rate for court-appointed attorneys when defendants can’t afford counsel.

But absent from the deal is Hochul’s proposed “housing compact” that was aimed at creating 800,000 units of affordable housing statewide.

In all, the latest budget in more than a decade will total about $229 billion. The final budget shows about $2 billion was added in negotiations with legislative leaders to Hochul’s budget proposal from Feb. 1.

Other major elements of the tentative agreement include:

• Long Islanders won’t be subject to an increase in the payroll tax that Hochul proposed to help the Metropolitan Transportation Authority. Although the MTA is need of a solid funding stream to maintain and improve the mass transit system critical to the Northeastern United States, suburban Democrats opposed any increase in the “MTA mobility tax,” because they feared moderate Democrats could lose reelection bids next year. An MTA payroll tax was blamed for State Senate losses by Democrats representing Long Island more than a decade ago.
• The minimum wage would rise to $17 an hour in phases until 2026, from the current $15, and rise with inflation after that.
• The state Taxation and Finance Department would be able to seize proceeds of cannabis sales by retailers who aren’t authorized by the state Office of Cannabis Management, legislative sources said. The state program to become an authorized retailer involves background checks and regulations for sales and taxation. Authorized retailers have said they are facing unfair competition by thousands of unauthorized retailers since the state legalized adult use of cannabis products in 2021. Previously, only the Office of Cannabis Management was authorized to raid illicit sellers, confiscate products, issue fines or close down stores. But that office didn’t have the enforcement personnel of the Taxation and Finance Office, which needed to be authorized to act on unauthorized cannabis sales.
• Increasing the cigarette tax by $1 to $5.35 a pack to further discourage smoking.
• Record school aid of $34.5 billion.
• $2.4 billion for new capital projects for SUNY and CUNY. 
• $500 million more for water quality programs as part of what Hochul called a nation-leading climate change plan.

Hochul's original budget proposal had sought to increase the amount of affordable housing by 800,000 units over the next decade. But it included creation of a state board that could overrule local zoning that rejects projects.

Independent studies have shown state power is needed to create new housing in communities that have blocked new projects for reasons other than public safety. The researchers said zoning laws have traditionally been used to keep racial minorities out of some communities.

"We’ve simply not kept up with demand … and I believe major action is required,” Hochul said Thursday night. “But we are not walking away from this issue.”

Hochul said in coming weeks she will take executive action to increase housing supply to improve affordability.

“People know I’m a fighter and I will continue working,” she said.

The tentative agreement now must be crafted into a printed bill with language approved by Hochul, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins.

That process can take about 36 hours, and rank-and-file senators and Assembly members said they expect to begin debating and voting on the bills next week.

“We’ve accomplished a great deal, we had a lot of intense conversations, but I believe New Yorkers will be proud of this budget,” Hochul said. She said the budget will make living in New York more affordable, and the future will be safer.

There was no immediate comment from legislative leaders.