Hochul announces a New York state budget deal – sort of

Published Apr 15, 2024 at 6:59 p.m. ET

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Published Apr 15, 2024 at 6:59 p.m. ET

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New York Gov. Kathy Hochul made an announcement Monday afternoon that was two weeks overdue. She and legislative leaders were said to have a handshake deal on a $237 billion state budget agreement – sort of.

In the Capitol’s ornate Red Room, Hochul, a Democrat, picked her words very carefully as she announced she and the leaders of the State Senate and Assembly “have the parameters of a conceptual agreement” on a budget, which was due before the April 1 start of the state’s fiscal year.

It was all part of Hochul’s latest turn at what has become a tradition in the sometimes-up-is-down world of Albany: Governors announcing a deal before the actual deal, signaling the end is near — but not quite there — in the annual state budget process.

“We’ve proved that we can come together for the good of our state, and we did,” Hochul said at her press conference.

Neither of Hochul’s main negotiating partners, Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) and Assembly Speaker Carl Heastie (D-Bronx), were in attendance for the governor’s announcement.

Just prior to the announcement, the Senate and Assembly’s Democratic majorities both signaled they were nearing an agreement with the governor, but still had more negotiating to do.

“We are close but there is no agreement,” Senate Democratic spokesperson Mike Murphy said during Hochul’s announcement.

Mike Whyland, a spokesperson for Assembly Democrats, said he agreed.

“The negotiations are moving in the right direction but there are still many issues to discuss with our members,” he said.

Like governors before her, Hochul used the press conference to deliver an overview of what she and legislative leaders have agreed on. In some cases, it was light on details, many of which remain to be negotiated.

Most notably, Hochul focused on a new housing package expected to be included in a final budget.

After more than a year of false starts, Hochul and lawmakers are poised to implement measures meant to tackle New York’s statewide housing crisis, including two policies favored by Mayor Eric Adams.

“This is a landmark deal, and I’m really proud of it,” she said.

The budget is slated to include a lucrative property tax break for developers who build new housing with a portion of the units reserved for low-income residents, according to the governor. The program replaces the tax break known as 421-a, which expired without renewal in 2022, but lowers the ceiling for rents deemed “affordable.”

The plan would also raise a cap on residential building size in the five boroughs that limits square footage to 12 times the lot size. Developers and policy experts say the “floor area ratio,” also known as FAR cap, makes it even harder to convert offices to apartments and condos in Manhattan because many of the buildings are already bigger than residential rules allow.

The budget is also set to include new protections for residents in non-rent stabilized apartments, though it is expected to exempt far more people than progressive lawmakers and tenant advocates had called for. The “Good Cause eviction” legislation will require landlords to offer a lease renewal to tenants who pay their rent and follow the terms of their lease, and will allow tenants to challenge rent increases beyond a certain percentage.

But Elizabeth Fine, counsel to the governor, said the particulars of the “Good Cause” legislation are still being worked out, declining to get into specifics.

“We’ll have more to say about it once we have the final details of the package,” Fine said.

Both tenant organizations and landlord organizations blasted the housing arrangement — just as they had done on Friday, when details of the emerging agreement began trickling out.

“Governor Hochul is pushing through a housing deal written by the real estate industry to ensure they keep getting richer off the backs of hardworking tenants,” said Cea Weaver, director of the Housing Justice for All coalition.

The Real Estate Board of New York, the influential lobbying group for real estate developers, said some of the measures in the housing plan will help produce more housing in some cases. But ultimately, the group concluded it’s not good enough.

“We are confident that this package falls far short of addressing the city’s housing needs and must be reassessed in the coming years to put the rental housing market on a solid footing,” REBNY president James Whelan said in a statement.

Hochul also touted measures that will make it easier for the state and local governments to crack down on an explosion of illicit marijuana shops that have cropped up in New York City and beyond since the state legalized recreational marijuana in 2021.

Specifically, Hochul said allegedly unlicensed shops will remain closed while they go through the adjudication process, which was a major priority for the Adams administration.

“While due process plays out, the padlock remains on,” she said.

Hochul said the budget will not increase income taxes, which had been a line in the sand for her even as progressive-minded legislators pushed for a tax hike on the rich.

That drew plaudits from the Partnership for New York City, a major business group.

“Governor Hochul and legislative leaders have reached agreement on a state budget that will reinforce the strength and stability of New York’s economy,” Kathryn Wylde, the group’s president and CEO, said in a statement.

Some other major proposals remain under negotiation, according to the Hochul administration.

That includes a push to sweeten pension benefits for relatively recent hires for state and local workers government in New York, as well as a renewed push by Hochul to extend mayoral control of the New York City school system.

The current system of mayoral control is due to expire in June. Earlier Monday, Queens Sen. John Liu — a Democrat who chairs the Senate New York City Education Committee — acknowledged a short-term extension was under consideration, though with potential strings attached.

"We're still working on it," Hochul said of mayoral control. "We've had some very positive conversations."

David Brand contributed reporting.

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Jon Campbell covers the New York State Capitol for WNYC and Gothamist. Prior to that, he covered the Capitol for more than a decade for the USA TODAY Network. He has twice earned the Walter T. Brown Memorial Award, an honor given annually by the Legislative Correspondents Association alumni for outstanding state government coverage. Jon grew up in the Buffalo area and graduated from the University at Albany. Got a tip? Email Jon at [email protected] or Signal 518-210-7087.

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