Albany hurtles toward budget deadline with taxes, climate goals on agenda

ALBANY — You know it’s the end of March when climate protesters line the Capitol hallways bellowing "Stop the Pollution," thousands of transportation workers’ green T-shirts demanding "Our fight! Our Contract" clog the food court, and in the concourse the 30-piece Mexico High School jazz ensemble rumbles through "On Broadway."

Welcome to budget time in Albany.

It’s just days before New York’s April 1 budget deadline, which apparently Gov. Kathy Hochul and state legislators won’t meet. Again.

Amid the noise of the high school bands and picket signs, lawmakers are trying to hammer a deal on a roughly $260 billion budget, and it’s not dollars and cents holding them up so much as key policy differences. Here’s what to know:

Policies, not pennies

Hochul, a Democrat, and the Democrat-controlled Legislature don’t appear terribly far apart on how much New York should spend on the 2026-27 fiscal year, which begins April 1.

Legislators will want to bump up Hochul’s $37 billion earmark for school aid, as they always do. They’ll also want to be more generous on child care (especially workers’ pay), prekindergarten and higher education. One area of financial turbulence is whether to boost state pension benefits for people hired in the last 15 years.

The disagreements, as they typically are under this governor, are about policies Hochul wants adopted as part of the budget.

The most high-profile of those deal with climate laws, environmental and building laws, automobile insurance and tax rates for the rich.

At the same time, they generally agree on some others, such as pushing back against President Donald Trump’s immigration policies. But they aren’t in sync on how far to go.

Climate

Hochul wants to slow down the state’s target goals for transitioning off fossil fuels (a 70% reduction by 2030) and says doing so is a key part of her "affordability" agenda, which will also play into her reelection campaign against Republican Bruce Blakeman, the Nassau County executive.

But it’s the one issue that’s caused the strongest blowback from Democrats who run the state Senate and Assembly.

The governor wants to push back climate regulations that are supposed to be developed essentially now to 2030. Further, she wants the new regulation tied to a new 2040 goal while keeping the 2050 goal of an 85% reduction in place. And she wants to change the way emissions are calculated, essentially arguing that New York is stricter than other states.

Environmentalists and progressive Dems are resisting. A group of 29 of the 41 Senate Democrats signed a letter that says they "categorically oppose any effort to roll back New York’s nation leading climate law," contending that doing so will hurt the state in the long run.

Hochul says opponents "don’t realize the world has changed since 2019," when the goals were set — and before the second Trump administration moved to block wind energy and other projects.

Building laws

Hochul proposes easing or suspending some environmental reviews when a project involves housing, child care or clean energy. She says the red tape of the state’s Environmental Review Quality Act (SEQRA) can add two years to a building completion.

Builders and some unions like it. But it’s opposed by environmental groups and progressive Dems — and Republicans in the Legislature who say the way Hochul would cut red tape would override local zoning control.

"We all want to see smart redevelopment and vibrant communities, but those decisions must be made by the people who live there," Assemb. Keith Brown (R-Huntington) said.

Car insurance

This is another plank of Hochul’s "affordability" agenda. In short, she wants to limit insurance payouts for pain and emotional suffering in crashes under certain circumstances and reduce fraud by giving prosecutors more tools.

The state’s Trial Lawyers Association and some consumer groups oppose her, saying her proposals won’t lower insurance premiums, which have skyrocketed since 2019.

Taxes

The Senate and Assembly proposed raising tax rates on annual incomes of $5 million or more. Additionally, the Assembly wants to lower the rates for incomes $323,000 and lower. In part, the Legislature is in sync with New York City Mayor Zohran Mamdani, who has asked Albany to raise taxes on the rich to help close the city’s budget gap.

Hochul has been steadfast in opposing any income tax hikes.

Also, she has opposed any hike in corporate tax rates, while the Senate and Assembly want to raise them for companies with revenues of at least $5 million.

ICE

Hochul wants to ban counties from signing formal cooperation agreements with the federal Immigration and Customs Enforcement agency. She wants to prohibit local police from transferring custody of people to ICE without a judicial warrant.

But immigration activists and progressive Dems are pushing for more. They favor the "New Yorkers For All" bill, which, among other things, would ban ICE agents from entering nonpublic areas of government-run locations like schools or motor vehicles agencies, ban local and state agencies from sharing information with ICE and prohibit local police from asking a person’s immigration status.

By Yancey Roy

yancey.roy@newsday.com@yanceyroy