In the News-New York State
Governor Hochul Releases Our New York, Our Future: New York’s Fiscal Year 2025 Executive Budget
Governor Kathy Hochul this week unveiled the largest budget in New York State history, a $233 million spending plan that closes the State’s $4.3 billion budget gap.
“This will be a $233 billion budget, accomplished without raising income taxes,” Governor Hochul said. “And today, New Yorkers will learn about how we’re presenting a solid, balanced budget without cuts or added burdens.”
According to the Governor, the budget reflects her commitment to making New York more affordable, more livable, and safer – while utilizing a fiscally responsible approach.
“This budget makes it clear that fiscal discipline can co-exist with progressive, people-driven policies,” Governor Hochul said. “I am committed to fight the right fights on behalf of New Yorkers, and to pursue the common good with common sense – by seeking common ground.”
Spending increases in the “big three”—school aid, Medicaid, and migrants—coupled with the drop in federal pandemic aid, have driven up state operating funds by $5.9 billion, according to State Budget Director Blake Washington.
Governor Hochul’s budget includes an $825 million increase to school aid, bringing this funding to a record $35.3 billion. This includes the State of the State proposal to revamp how literacy is taught in the State. The Governor also proposed a four-year extension of mayoral control of schools in New York City.
Migrant funding totals $2.4 billion with money to be used for shelter, social services, and resettlement. Of that, $1 billion will specifically be used to reimburse the City, and $500 million is coming from a one-time withdrawal from the state reserves for emergencies.
In FY 2025, the State-funded portion of the Medicaid program will total $35.5 billion; with the average cost per member per year of over $10,047. Total enrollment in the program is expected to reach 6.8 million enrollees by March 2025.
The Executive Budget includes $7.5 billion in funding over the next three years ($6 billion Federal, $1.5 billion state) through an amendment to New York’s Medicaid Section 1115 Demonstration program to support actions to advance health equity, reduce health disparities, and strengthen access to primary and behavioral health care across the state. The State’s plan includes establishing sustainable base rates for safety net hospitals (Bronx, Kings, Queens, and Westchester Counties) that serve underserved communities; connecting people to housing and nutritional support services; enhancing access to coordinated and comprehensive treatment for substance use disorders (SUDs); and making long-term, sustainable investments in the state’s health care workforce.
Proposed program enhancements to Medicaid under the budget include providing financial incentives for hospitals to reduce unnecessary C-sections; allowing access to doula services without the need for a physician referral; removing or reducing barriers to accessing gender affirming surgery; increasing rates for providers serving Medicaid members with intellectual, developmental, or physical disabilities; and expanding access to dental care in school-based health centers.
Meanwhile, as the Governor proposes increases and expansion with one hand, she seeks cuts and reforms with the other.
For example, under Medicaid, the Governor is seeking $1.2 billion in savings, including discontinuing wage parity for consumer directed personal assistance program (CDPAP) and bolstering the state share savings across long term care programs.
With respect to education, the Budget Director explained, the Executive Budget proposes a change in school aid funding that seeks to level aid disbursement between wealthy and poorer districts.
“We have a proposal to modify that and to step down from a state support for the districts that are overfunded relative to their foundation aid level and to try to right size and drive the resources to the districts that are growing and high poverty,” Washington said, according to published reports.
Both the Medicaid cuts and education funding changes were met with criticism by members of the Legislature. Assemblymembers–including Amy Paulin, John McDonald, Pat Fahey, Al Stirpe, Fred Thiele, Mary Beth Walsh, and Carrie Woerner–held a press conference calling upon the Governor to claw back her budget proposals which fail long-term care, and New York’s increasing aging population. Senator Pete Harkham railed against the Governor’s education funding changes, calling the decreasing support to districts is a “step backwards” and “an insult to students, educators and taxpayers.”
The Executive Budget has set the stage for a contentious budget season, starting in earnest next week with the 2025 Legislative Fiscal Committees’ hearings on the Executive budget. The Senate Finance Committee and the Assembly Ways and Means Committee will hold a series of 11 hearings beginning Tuesday, January 23rd through Wednesday, February 14th. A schedule of the hearings can be found on page 3.
2024-2025 New York Legislative Fiscal Committees’ Executive Budget Hearings
|
Date |
Day | Time | Hearing |
Request to Testify: |
|
January 23 |
Tuesday | 9:30 a.m. | Health | Senate |
| January 24 | Wednesday | 9:30 a.m. | Transportation | Assembly |
| January 25 | Thursday | 9:30 a.m. | Public Protection | Senate |
| January 30 | Tuesday | 9:30 a.m. | Economic Development/Arts | Senate |
| 2:00 p.m. | Workforce Development/Labor | Senate | ||
| January 31 | Wednesday | 9:30 a.m. | Human Services | Assembly |
| February 1 | Thursday | 9:30 a.m. | Elementary & Secondary Education | Assembly |
| February 6 | Tuesday | 9:30 a.m. | Local/General Government | Assembly |
| February 7 | Wednesday | 9:30 a.m. | Environmental Conservation | Senate |
| February 8 | Thursday | 9:30 a.m. | Higher Education | Assembly |
| February 13 | Tuesday | 9:30 a.m. | Mental Hygiene | Senate |
| February 14 | Wednesday | 9:30 a.m. | Taxes | Assembly |
| 12:00 p.m. | Housing |
Governor Continues Push to Spur Housing Development Across New York
Governor Hochul’s FY 2025 Executive Budget again challenges the State Legislature to focus on initiatives to address New York’s housing crisis.
This year’s proposal seeks to earmark $25 billion to create or preserve 100,000 homes throughout the state, with another $500 million to create 15,000 homes on state-owned land. This would require a so-called “pro-housing” community designation for municipalities to access $650 million in funds. In addition, the Governor has offered a number of legislative proposals to increase the housing supply in New York City.
At the opening of this year’s session, both Senate Majority Leader Andrea Stewart Cousins and Assembly Speaker Carl Heastie identified housing development as a key issue in 2025. Last year Governor Hochul’s budget proposal was met with stiff local opposition and did not gain traction over the course of the 2024 budget negotiations. Governor Hochul then moved to Executive Orders to enact limited housing proposals over the second half of 2023.
Legislative changes proposed by Governor Hochul include:
- Create New Tax Abatement for Rental Housing Construction Purpose: This bill adds a new section 485-x of the Real Property Tax law establishing the Affordable Neighborhoods for New Yorkers Tax Incentive program (ANNY) to incentivize the development of housing that includes affordable units in New York City. ANNY benefit recipients would receive a full property tax exemption during the construction for up to three years. ANNY homeownership developments would then receive 40 years of full exemption. ANNY rental units would receive 25 years of full 24 exemption after the construction period, followed by 10 more years with the exemption percentage pegged to the percentage of units in the building that are affordable units. All affordable rental units would be rent stabilized and, in buildings of 30 or more units, the rental units would be permanently affordable at the levels determined by the City Department of Housing and Community Development. Building service workers in ANNY developments would receive prevailing wage during the benefit period. Construction wage requirements, including the average hourly wage requirements based on geography and building size and the fines for non-compliance, would be established by a memorandum of understanding (MOU) executed by the largest trade association of real estate developers in New York City and the largest building and construction worker trade labor association with membership in New York City. If an MOU is executed, buildings would need to commence development within five years of the MOU execution and complete within nine years of the MOU execution. If the MOU is not executed by January 1, 2025, the ANNY program would not go into effect.
- Extend the Project Completion Deadline for Vested Projects Under 421-a: Under current law, to be eligible for a tax abatement pursuant to section 421-a of the RPTL, a vested project must be completed by June 15, 2026. This bill would extend this completion deadline to June 15, 2031.
- Residential Development: This bill would amend the Multiple Dwelling Law (MDL) to authorize the City of New York and the New York State Urban Development Corporation (UDC) to allow for denser residential development than is otherwise permitted under the MDL. Currently, any dwelling or dwellings on a lot within New York City are held to a maximum floor area ratio (FAR) of 12.0. The proposed amendment to the MDL would authorize the City and UDC to allow for denser residential development than 12 FAR in specified circumstances.
- Authorize Tax Incentive Benefits for Converting Commercial Property to Affordable Housing: This bill would establish the Affordable Housing from Commercial Conversion Tax Incentive Benefits (AHCC) program in NYC to incentivize the inclusion of affordable rental units in certain multiple dwellings converted from commercial, manufacturing, or other non-residential buildings. AHCC would not be available for converting a hotel or other class B multiple dwelling.
- Enable the City of New York to Create a Pathway to Legalize Pre-Existing Basement and Cellar Dwelling Units in New York City: This bill would provide the City of New York with the authority to enact a local law allowing for the conversion of inhabited and other currently existing basement or cellar dwelling units to legal dwelling units. The City would be authorized to create a program to provide amnesty to owners of existing basement or cellar dwelling units.
Teamsters Fight for Budget Funding to Implement Warehouse Workers Injury Reduction Act to Combat NY’s Warehouse Safety Crisis
The Teamsters, in conjunction with the New Yorkers for a Fair Economy coalition, this week called upon Governor Kathy Hochul to add $5 million in the 2024 NYS budget to implement the Warehouse Worker Injury Reduction Act (S5081B), Sponsored by Senate Labor Chair Jessica Ramos, and address the state’s rampant warehouse safety crisis.
“Teamsters have fought for generations to make warehousing a safe and family-sustaining job. We won’t let Amazon turn this into a dangerous industry. The Warehouse Worker Injury Reduction Act will hold warehouse employers to a high standard to protect New York workers and will provide funding to make sure it is enforced,” said Thomas Gesualdi, President of Teamsters Joint Council 16.
The coalition includes ALIGN, the Retail Wholesale & Department Store Union (RWDSU), Teamsters, NELP, and NYCOSH, among others. The bill would require warehouses to be designed for safety first, with mandated annual evaluations by ergonomics experts to identify hazards and assign fixes. Fixes may be simple, such as providing dollies for heavy loads or raising a shelf several feet so that workers don’t have to bend over repeatedly.
According to analysis released by the National Employment Law Project (NELP), Amazon’s ALB1 distribution center in Schodack, NY, tops the list of dangerous large warehouses with an injury rate of 18.8 per 100 workers, or nearly one injury for every five workers.
Warehouse workers are injured four times more than the average New York worker, and at Amazon facilities overall, 1 in 12 workers are injured on the job. Lifting and twisting with heavy boxes can cause muscle strains, sprains, and tendonitis. All of these injuries reported to OSHA are serious enough to require some medical attention.
The most serious of these injuries cause workers to miss time or need a job transfer, and can have lifelong impacts on worker health while employers experience high turnover and New York’s healthcare and workers’ comp systems are further burdened.
“When a worker gets injured, it does not just destabilize their life, it ripples out to th
ives of the“New York must step up to guarantee that no warehouse workers have to face dangerous conditions to make ends meet. The Amazon Labor Union has made great strides in raising awareness about the current safety conditions in warehouses nationwide, and this bill will help address these issues at the root of the problem. The Warehouse Worker Injury Reduction Act is our solution to ensuring warehouses prioritize the safety of their workers. I’m proud to co-sponsor this legislation and help play a part in ensuring every warehouse worker returns home safely,” said Senator Jessica Scarcella-Spanton.
In the News-New York City
Mayor Adams Releases Preliminary Budget for Fiscal Year 2025
In Addition to NYPD, FDNY, and DSNY, Mayor Adams Hold Libraries Harmless in Preliminary Budget, While DOE, DYCD, and Aging Are Partially Exempted
New York City Mayor Eric Adams this week released New York City’s balanced $109.4 billion Preliminary Budget for Fiscal Year (FY) 2025. The budget builds on the Adams’ administration emphasis on responsible fiscal management, while prioritizing the needs of working-class New Yorkers by restoring investments in public safety, public spaces, and young people.
Projected tax revenues in the Preliminary Budget exceed those in the November 2023 Financial Plan tax by $1.3 billion in FY24 and $1.6 billion in FY25, due to better-than-anticipated economic performance in 2023. Tax revenue growth is expected to remain slow in upcoming fiscal years as the local economy cools — reinforcing that the city cannot rely solely on revenue growth to solve immediate fiscal challenges.
The Preliminary Budget includes a near-record level $8.2 billion in reserves — including $1.2 billion in the General Reserve, $4.8 billion in the Retiree Health Benefits Trust Fund, $250 million in the Capital Stabilization Reserve, and $1.96 billion in the Rainy-Day Fund. A combination of savings and FY24 revenue was applied to balance FY25. Outyear gaps are now reduced to $5.2 billion in FY26, $5.1 billion in FY27, and $6.0 billion in FY28.
The New York City Police Department (NYPD), Fire Department of the City of New York (FDNY), and New York City Sanitation Department (DSNY) were exempted from the Preliminary Budget PEG to avoid impacts to public safety and cleanliness.
According to the Mayor, after they met their PEG targets, he decided to exempt the city’s three library systems from this round of PEG savings as well to prevent related potential service reductions. The New York City Department of Education (DOE), New York City Department of Social Services (DSS), New York City Department of Youth and Community Development (DYCD), and New York City Department for the Aging (DFTA) were partially exempted to minimize service disruptions.
Funding Public Safety
Funding is restored in the Preliminary Budget for the NYPD to add another police academy class of 600 new recruits set to join the ranks in April 2024. This class of recruits will graduate in October and will join the three police classes already scheduled to graduate this year.
Funding will also be restored to return a fifth firefighter at 20 FDNY engine companies and maintain 190 firefighters on payroll who are not expected to be able to return to full-duty status.
Funding Clean Public Spaces
The Preliminary Budget includes restored funding to maintain 23,000 DSNY litter baskets and allow DSNY to continue installing its Litter Basket of the Future. Funding will also be restored for the New York City Department of Parks and Recreation’s (NYC Parks) Parks Opportunity Program (POP), which gives thousands of low-income New Yorkers six-month paid opportunities and training programs each year.
Funding Young People
In the Preliminary Budget, $10 million is restored to 170 DOE community schools, which partner with community-based organizations to provide holistic support to students and their families, including providing health care, additional learning opportunities, and social and emotional counseling. The budget also includes an $80 million investment to fund DOE’s portion of the Summer Rising program — the city’s summer enrichment program for elementary and middle school students, which is jointly funded with DYCD.
The Adams Administration’s spending plan was met with a mixed reaction from the City Council.
“While we are pleased about relief for some programs and will continue to review the Mayor’s Preliminary Budget for Fiscal Year 2025 (FY25), it is critical to underscore the need for a better approach to budgeting that is based on a more accurate and shared set of facts,” Speaker Adrienne Adams and Finance Chair Justin Brannan said in relation to the Mayor’s Fiscal Year 2025 Preliminary Budget. “Budgets and the numbers that determine them have significant implications on the lives of all New Yorkers, including the hardworking public servants in our city agencies. It is counterproductive for New Yorkers to needlessly fear dire threats to essential services they rely upon when so many are struggling through an inequitable recovery. Agencies should not be pre-occupied and demoralized by unnecessary budget exercises when they have no shortage of work to complete on behalf of New Yorkers.”
Briefs
Governor’s Workforce Initiatives Take Shape in Executive Budget
Budget Advances Proposals to Increase NY Short-term Disability Allowance & Establish First-in-Nation Paid Prenatal Leave
New York Short Term Disability
Currently, the maximum paid benefit available to New Yorkers who need time off from work to address their own health needs, including for any pregnancy-related conditions, has been capped at $170/week since 1989. Adjusting for inflation, $170 today was worth approximately $69 in 1989.
Governor Hochul proposes to increase the maximum weekly payment for eligible employees on short term disability from $170 to two-thirds of an employee’s average weekly wage, capped at two-thirds of the Statewide Average Weekly Wage (SAWW) by 2029 for the first twelve weeks of disability. Thereafter, the benefit would be capped at $280 weekly for weeks thirteen through twenty-six.
The increase to the weekly benefit would roll out in annual increments, starting at half of an employee’s average weekly wage in 2025, capped at $400, and ending at two-thirds of the SAWW by 2029.
The annual increases for benefits paid for the first twelve weeks of leave would be:
- 2025: 50% AWW up to $400.
- 2026: 50% AWW up to $630.
- 2027: 50% AWW up to 50% SAWW.
- 2028: 60% AWW up to 60% SAWW.
- 2029: 67% AWW up to 67% SAWW.
For weekly payments between the twelfth and twenty-sixth week of disability, the steps would be as follows:
- 2025: 50% AWW up to $280.
- 2028: 60% AWW up to $280.
- 2029: 67% AWW up to $280.
The minimum short-term disability benefit would set to $100 in 2025 and beyond, except when the employee’s weekly wage is below $100; when the employee’s wage is below $100, the employee would receive their full wage.
Paid Prenatal Leave
This bill would provide eligible pregnant employees the ability to take up to 40 additional hours of leave for prenatal medical appointments in addition to New York’s current 12 weeks of Paid Family Leave. Leave for prenatal visits could be taken in hourly increments.
This bill would amend Workers’ Compensation Law to provide 40 additional hours of leave to New York’s Paid Family Leave Law for eligible pregnant employees to attend appointments for prenatal care, including physical exams, monitoring and testing, and discussions with a health care provider. The amendment would provide 40 hours within a 52-week calendar period, available in hourly increments.
The leave for prenatal care would not reduce the 12 weeks of Paid Family Leave or 26 weeks of disability leave for eligible employees. Leave benefits would be paid hourly and written notice or proof to the employer for leave would be due within 30 days following the appointment.
Executive Budget Boosts NY’s Legal Adult-use Cannabis Market By Revising Cannabis Taxes
Governor Kathy Hochul’s Executive Budget included a proposal to replace the potency tax on adult-use cannabis (“AUC”) products with a percentage tax on the wholesale price to support the expansion of the legal adult-use cannabis market.
Under current law, a tax is imposed on AUC products sold or transferred by distributors to retail sellers based on the total THC (potency) indicated on the product label. These tax rates vary based on the type of AUC product sold. This bill would amend Tax Law to replace these potency-based tax rates with a single percentage-based tax rate of 9 percent of the amount charged for the sale or transfer of AUC products by a distributor to a cannabis retailer.
This bill would amend the Tax Law to replace these potency-based tax rates with a single percentage-based tax rate of 9 percent of the amount charged for the sale or transfer of AUC products by a distributor to a cannabis retailer. It would also provide that for retail sales by vertically integrated microbusinesses and registered organizations, the tax rate of 9 percent would apply to 75 percent of the amount they charge for their sale or transfer of AUC products to a retail customer.
Executive Budget Affordable Gas Transition Act Disincentivizes Natural Gas Hook Ups
Governor Kathy Hochul renewed her push to disincentivize natural gas hook ups by again calling for the elimination of the “100-foot” rule to allow for the “strategic and managed transition of the natural gas system.”
The Affordable Gas Transition Act (AGTA) would “support responsible, equitable, and effective gas system transition planning by eliminating the ‘100-foot’ rule – the obligation to serve customers with natural gas – and other provisions of the law that restrict the Public Service Commission (PSC) from ensuring utilities respond appropriately to a changing market and meet the Climate Leadership and Community Protection Act’s (CLCPA’s) greenhouse gas (GHG) emission reduction requirements,” according to the Executive Budget documents.
This bill amends the Public Service Law (PSL) relating to the mission of the PSC to add achievement of the CLCPA’s GHG emissions reduction requirements to the obligations of regulated utilities in providing certain utility services. AGTA would also update the PSC policy to ensure that customers who want to continue using gas can do so safely while at the same time allowing PSC to establish programs for the transition to electric heating and other alternatives to natural gas.
According to the Budget documents, “These changes would allow utilities and the State to better manage energy system planning, end the shifting of costs associated with new gas customer hookups to existing customers, and limit the continued investment of rate-payer funds into what may become stranded assets.”
The Governor’s 2023 proposal was not included in the final budget.
In Line With the Federal Monitor, Mayor Adams Vetoes City Council Bill That Would Make New York City Jails Less Safe For Those In Custody And Employees
New York City Mayor Eric Adams today vetoed Intro. 549-A, a New York City Council bill that would have jeopardized the safety of both those in the city’s custody and correctional staff, interfered with the restrictive housing program designed in consultation with the federal monitor in the Nuñez case, and contradicted best practices for correctional safety.
Last week, Federal Monitor Steven Martin provided an assessment stating that he “has deep concerns about many of [Intro. 549-A’s] provisions,” and added that, “Many of the provisions, as currently drafted, could inadvertently undermine the overall goals of protecting individuals from harm, promoting sound correctional practice and improving safety for those in custody and jail staff. Consequently, this could impede the Department’s ability to comply with the Nuñez Court Orders.”
“Under our administration, the city’s jails are getting safer — but this bill would have taken us in the wrong direction. Vetoing this bill will keep those in our custody and our correction officers safer,” said Mayor Adams.
Mayor Adams Vetoes City Council Bill That Could Make NYC Streets Less Safe
Intro. 586-A Could Slow NYPD Response Times, Undermine Community-Oriented Policing, and Add Tens of Millions of Dollars in Overtime to NYPD’s Budget
Following vocal opposition from faith leaders, community advocates, business organizations, district attorneys, law enforcement professionals, and everyday New Yorkers, New York City Mayor Eric Adams today vetoed Intro. 586-A, which could make New York City less safe by forcing New York City Police Department (NYPD) officers to spend more time filling out reports after Level 1 interactions with the public instead of patrolling the street and keeping the public safe.
According to the Mayor, under his Administration, overall crime — including violent crime — was down in 2023. However, Intro. 586-A could slow NYPD police response times, erode years of progress building police-community relationships and preventing crime through community-oriented policing, and add tens of millions of dollars in additional NYPD overtime each year.
“As young men, my brother and I were beaten by the police in the basement of a local precinct, but I turned my pain into purpose and joined the police force to effect change from within the system. And, in my time as a police officer and throughout my career in public service, I have fought for transparency and against abusive policing tactics that targeted communities of color. While Intro. 586 has good intentions behind it, the bill is misguided and compromises our public safety,” said Mayor Adams.
Coming Up
New York State
Monday, January 22nd
Senate Insurance, Room 124 State Capitol, 11 a.m.
Senate Codes, Room 124 State Capitol, 11:30 a.m.
Senate Health, Room 124 State Capitol, Noon
Senate Crime Victims, Crime and Correction, Room 123 State Capitol, 1 p.m.
NYS Assembly Session, State Capitol, 2 p.m.
NYS Senate Session, State Capital, 3 p.m.
Tuesday, January 23rd
Senate Aging, Room 904 Legislative Office Building, 9 a.m.
Senate Education, Room, 510 Legislative Office Building, 10 a.m.
Assembly Correction Committee, Room 524 Legislative Office Building, 10 a.m.
Senate Social Services, Room 410 Legislative Office Building, 10:30 a.m.
Senate Energy and Telecommunications, Room 124 State Capitol, 11 a.m.
Senate Labor, Room 308 Legislative Office Building, 11:00 a.m.
Senate Agriculture, Room 901 Legislative Office Building, 11:30 a.m.
Assembly Agriculture Committee, Room 829 Legislative Office Building,11:30 a.m.
Senate Higher Education, Room 912 Legislative Office Building, Noon.
Assembly Aging Committee, Room 823 Legislative Office Building, Noon.
Assembly Tourism, Parks, Arts and Sports Development Committee, 714 Room 823 Legislative Office Building, 1 p.m.
NYS Assembly Session, State Capitol, TBD.
NYS Senate Session, State Capital, TBD.
Wednesday, January 24rd
NYS Assembly Session, State Capitol, TBD.
NYS Senate Session, State Capital, TBD.
New York City
Tuesday, January 23rd
Subcommittee on Zoning and Franchises, 250 Broadway – Committee Room, 16th Floor, 11 a.m.
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