Highlights of Gov. Kathy Hochul's 2022-23 budget

New York Gov. Kathy Hochul's $216.3 billion budget proposal for 2022-23 would earmark funding for a wide range of programs for schools, small businesses and public transit.

Record spending on transportation programs includes $1 billion for a statewide "war on potholes."

Energy spending includes $17 million to electrify the state’s entire vehicle fleet by 2035.

Small businesses struggling to survive the COVID-19 pandemic would receive more than $1 billion in grants, loans and tax credits.

Following are highlights of Hochul's proposed spending plan:

SCHOOL AID

Overall state aid for public schools would rise by $2.1 billion or 7.1% to a total $31.2 billion for the 2022-23 fiscal year beginning July 1.

Hochul's budget includes a $1.6 billion increase in "foundation aid," the largest source of state financial assistance to schools.

Next year’s proposed foundation-aid increase represents the second installment in a historic, three-year package valued at more than $4 billion overall.

The first installment, for the 2021-22 school year, came in an agreement reached in April by state legislators and then-Gov. Andrew M. Cuomo, Hochul’s predecessor.

The third installment is to be paid in 2023-24.

The idea is to guarantee all school districts enough money to provide a "sound, basic" education as required by the state constitution.

"I believe to my very core that there is nothing more valuable than education and training when it comes to unlocking opportunity and prosperity," Hochul said in her State of the State address earlier this month.

"It changes lives, across generations," Hochul said.

The current state budget provided an increase of more than $417 million, or 13%, for Long Island.

Some of the least wealthy districts received funding hikes of more than 20%.

Also, Hochul's plan would help schools deal with the impact of the COVID-19 pandemic with new funding for after-school instruction and student psychological services.

District-by-district details of Hochul's 2022-23 budget plan have not yet been released.

— John Hildebrand

TRANSPORTATION

Hochul’s budget proposes record spending on transportation infrastructure, including for a "war on potholes."

The governor proposed a $32.8 billion, five-year capital budget for the state Department of Transportation that aims to ensure "stronger State and local roads and bridges for years to come," according to budget documents.

Hochul proposed $1 billion in funding to attack the pothole problem statewide. Operation P.O.P., or "Pave Our Potholes," will start with $100 million in funding for the new fiscal year.

Hochul proposes to fund some $13.5 billion in state transportation spending by using new federal infrastructure money.

The Metropolitan Transportation Authority, which includes the Long Island Rail Road, would get $6.6 billion in new funding, an increase of about 18%.

An additional $471 million in non-MTA aid will benefit bus systems in Nassau and Suffolk counties and other transit agencies.

In addition, Hochul's budget earmarks $106 million in new spending to improve the "customer experience" at the Department of Motor Vehicles.

In total, the state would spend $7.8 billion on transportation costs in 2022-23, an increase of 17% over 2021-22.

Hochul also stressed her commitment to major transportation infrastructure projects already underway, including the LIRR’s Third Track.

She pledged to fund future megaprojects "using cash, rather than borrowing money, so future generations are not hamstrung by the commitments we make today."

— Alfonso Castillo

SMALL BUSINESS/JOBS

Small businesses still struggling to survive the pandemic would receive more than $1 billion in grants, loans and tax credits from the state under Hochul’s proposed budget.

Much of the aid would be in the form of "capital and venture debt" awards to technology startups, along with $200 million in grants for new firms that opened despite the pandemic.

Hochul also wants to establish a Small Business Lending Initiative consisting of low-interest loans for companies that cannot obtain bank loans.

In terms of tax relief, the governor would provide $250 million in a refundable tax credit for COVID-19 expenses, such as outdoor seating at restaurants, personal protective equipment for employees and ventilation systems.

Hochul would increase a tax return adjustment, known as a subtraction modification, that serves to reduce a business's gross taxable income.

She also would make more companies eligible for the subtraction modification, with an estimated 195,000 businesses expected to save a total of $100 million per year.

The business relief package was endorsed by the Long Island Association, the region’s most prominent business group.

Matt Cohen, the association's CEO, said the proposed tax credits for COVID-19 related purchases would "provide much-needed relief to small businesses who weathered the crisis, and we applaud her forward-thinking new funding streams for innovative new businesses."

The National Federation of Independent Business also backed Hochul’s tax proposals.

But Ashley Ranslow, the group’s New York State director, said small employers are struggling to pay increased contributions to the Unemployment Insurance Trust Fund that resulted from record joblessness during the 2020 recession.

"With record levels of federal aid and higher-than-anticipated revenue, the state must and should allocate billions to address New York’s outstanding unemployment insurance debt," Ranslow said.

"Otherwise, small businesses will pay the price in increased" federal and state contribution rates, she said.

— James T. Madore

ENERGY

Hochul in her budget address referred to a previously announced plan to spend $500 million for manufacturing and supply chain infrastructure to help seed development of offshore-wind power in New York.

"We must speed up our transition to clean energy and we'll lead the way by making a nation-leading $500 million investment in offshore wind energy," she said.

The funding is part of Hochul’s five-year, $92 billion capital spending plan. It was unclear how much would be spent in 2023, and state spokesmen didn't comment immediately.

The state and offshore wind developers already have announced hundreds of millions of dollars in spending to beef up ports in Brooklyn and elsewhere to manage assembly, maintenance and operations of wind turbine arrays off the South Shore and up the East Coast.

Hochul’s budget said the investment would help build offshore wind supply chains and infrastructure that would create 2,000 jobs.

The executive budget also includes $17 million in funding to electrify the state’s entire vehicle fleet by 2035. The money would cover expenses including the purchase of new vehicles and creation of charging infrastructure.

The state is also backing an effort to expand electric buses for schools, which cost twice as much or more than traditional buses.

State budget director Robert Mujica state and federal grants would fund the conversion.

— Mark Harrington

HIGHER EDUCATION

The Executive Budget provides a combined $1.5 billion for the State University of New York and the City University of New York, including $160 million to boost the number of full-time faculty.

Hochul's spending plan also would expand part-time students’ access to grants from the Tuition Assistance Program, which helps students pay tuition at approved schools in New York.

SUNY and CUNY each would receive $53 million to hire an estimated 880 additional full-time faculty at four- and two-year colleges.

SUNY and CUNY operations would get more than $300 million a year combined over the next five years, while receiving expanded operating revenues from increased state support for TAP and the Excelsior Scholarship program.

Hochul's budget also would expand access to the TAP program to an estimated 75,000 part-time students taking six or more credits at SUNY, CUNY or nonprofit independent colleges.

— Carol Polsky

ENVIRONMENT

Hochul announced an increase of $1 billion for the Clean Water, Clean Air, and Green Jobs Environmental Bond Act, also known as the Restore Mother Nature Act. That would bring total borrowing to $4 billion.

New Yorkers will vote in November on the borrowing for initiatives including flood-risk reduction and mitigation of the effects of climate change.

It would be the state’s first major borrowing for environmental projects since 1996. A similar $3 billion measure was pulled from the 2020 ballot because of financial concerns related to the COVID-19 pandemic.

Hochul's budget also includes $500 million for clean water infrastructure funding.

The money will "ensure New Yorkers have access to clean drinking water and will allow municipalities to invest in efficient and effective wastewater treatment strategies," Hochul said.

The Environmental Protection Fund for projects to support initiatives including protection of water resources would receive a record $400 million under Hochul's budget.

The budget also allots $200 million — $90 million more than in the current state budget — to improve state parks.

Some $12 million would go for the Climate Resilient Farms Program, and another $12.5 million would go to local soil and water conservation districts to support greener agriculture.

— Vera Chinese

HEALTH CARE

The health care industry would get a $10 billion infusion to upgrade facilities and expand the workforce by 20% over five years under Hochul’s proposed budget.

Health care workers are "the heroes of this pandemic, so let's stop talking about the debt we owe them and actually pay them what they deserve," Hochul said.

The plan includes $2 billion for wages and $1.2 billion for retention bonuses, including $3,000 for full-time workers who remain in their jobs for at least a year.

Bonuses would go to workers earning up to $100,000, state officials said in a budget briefing book.

Federal matching funds would boost the bonus pool from the current $1.2 billion to between $2 billion and $3 billion, state budget director Mujica said in a presentation after Hochul’s speech.

Hochul's budget includes $1.6 billion for improvements to hospitals, nursing homes and other facilities, and $750 million to increase lab capacity.

The spending plan also calls for a 1% increase in Medicaid reimbursement rates, expanded Medicaid eligibility and $2.8 billion in payments to "safety net" hospitals.

Even before the pandemic, a survey showed New York needed to increase the size of its health care workforce by 32% over the 10-year period ending in 2028, Hochul’s administration said earlier this month.

By mid-2021, however, the health care workforce had declined by 3% compared with pre-pandemic levels, state officials said.

— Maura McDermott

Correction: A previous version of this story misstated the amounts of proposed borrowing in the Clean Water, Clean Air and Green Jobs Environmental Bond Act, and in a similar measure in 2020. Gov. Kathy Hochul has announced an increase of $1 billion for the bond act, to bring total borrowing to $4 billion. The 2020 measure contained bonding of $3 billion. Also, due to an editing error, the story misstated the proposed increase in a pool of retention bonuses for health care workers. Federal matching funds would boost the pool from the current $1.2 billion to between $2 billion and $3 billion, according to state Budget Director Robert F. Mujica Jr.