Gov. Hochul proposes sending checks to many NYers dealing with inflation

ALBANY — Gov. Kathy Hochul on Monday proposed sending checks of up to $500 to New Yorkers as an "inflation rebate."

The checks would provide $300 to a taxpayer who makes up to $150,000 and files as a single person. For a joint return, $500 checks would go to families making up to $300,000.

Hochul said 8.6 million New Yorkers would receive the checks, including 1.3 million Long Islanders.

"Because of inflation, New York has generated unprecedented revenues through the sales tax — now, we're returning that cash back to middle-class families," Hochul said. "My agenda for the coming year will be laser-focused on putting money back in your pockets, and that starts with proposing Inflation Refund checks of up to $500 to help millions of hardworking New Yorkers. It's simple: the cost of living is still too damn high, and New Yorkers deserve a break."

The $3 billion to cover the one-time checks would come from sales tax revenue that has increased beyond projections.

Hochul said this is the first piece of her State of the State address due to be delivered next month to set her legislative agenda for 2025.

The practical value of sending government surplus checks from one of the most heavily taxing state governments in the country is questionable, independent analysts have argued, because the checks don’t reduce or even promise reduced levels of spending.

"Inflation comes from too much money chasing too few goods and services," said Ken Girardin, research director at the nonpartisan Empire Center for Public Policy think tank in Albany. "This is a proposal to make state lawmakers feel better about making inflation worse."

Citizens Budget Commission President Andrew S. Rein said more must be done to provide relief.

"A one-time rebate may feel good, but what New York needs is lower taxes to be more affordable and competitive," Rein said.

In her proposal, Hochul confronts the affordability issue — which many political observers say cost the Democratic Party the White House, Congress and Senate last fall and recent gains by the GOP in New York State. But affordability has also been a constant theme for Hochul since she took office in 2021 and has been the basis for her legacy issue of increasing the affordability of housing.

Her proposal is similar to the STAR property tax rebate checks begun by the Republicans more than a decade ago when they controlled the State Senate. The political value of sending a check to New Yorkers, often in a mailing that prominently noted elected leaders’ names, is well established.

The governor will release her budget proposal to the State Legislature in late January. She will have to detail how she will fund the $3 billion cost then and seek the approval of the leaders of the Democratic majorities of the Senate and Assembly.

The friction will be that the Legislature and progressive factions within the Democratic Party have argued there are many other unfunded needs for more revenue, particularly in education.

"Proposals like this are a good first step and we have been discussing a comprehensive affordability agenda with the governor and Senate," said Michael Whyland, spokesman for Assembly Speaker Carl Heastie.

The Senate majority was considering the proposal and had no immediate comment.

Assembly Republican leader Will Barclay said Hochul's proposal is a gimmick and she is repeating concerns Republicans have voiced for four years.

"While I may agree with the governor’s intent, the strategy remains highly questionable," Barclay said. "Instead of paying New Yorkers with their own money, don’t take it from them in the first place."

"The governor's mindset is promising, however words are words," said Senate Republican leader Rob Ortt. He said the state needs "real affordability … not just one-shot gimmicks."

Some states have gone further since 2023 to address inflation.

The National Conference of State Legislatures said 14 states reduced personal or corporate income tax rates since 2022. Several other states are considering tax relief, the association’s survey of states found.

For example, Arkansas and Kentucky cut income tax rates, Florida created a permanent tax exemption for many products including those for babies.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.