With a focus on economic recovery, balanced budgets and tax cuts, Governor Hochul today unveiled a $216 billion budget plan that continues a notable shift for the New York Democrat, who s is distant from the progressive wing of her party.
The proposed budget, which will no doubt go through changes in the state legislature, pays particular attention to the needs of New Yorkers emerging from the Covid pandemic.
Some of those measures include $10 billion in investments in the state’s health care system and $31 billion in aid to the state’s school system, which are billed as the largest-ever spending on education. school aid in New York.
The healthcare investment aims to increase the state’s healthcare workforce by 20% over the next five years by expanding programs to train, educate and recruit healthcare professionals.
The plan also includes three initiatives aimed at small businesses: a tax relief plan ??for small businesses and the middle class?? a $1 billion program to ??finance innovative small businesses,?? and a tax credit for Covid-related expenses.
This is all on top of an accelerated personal income tax cut plan, which began in 2018 and was to be fully implemented by 2025. Under Ms Hochul’s plan, these cuts tax will now be fully in place for 2023 and will affect approximately 6.1 million New Yorkers.
The 2023 budget proposal is supposedly balanced, with no loopholes that would plunge the state into deeper debt. In fact, state budget projections show no deviation through 2027, as much of the spending is made up of one-time investments.
??After years of unprecedented hardship, this Budget makes the State, from a financial point of view, as resilient as its spirit. This is the budget New Yorkers deserve and expect, ?? State Budget Director Robert Mujica Jr. said today in a report.
The small business tax relief would help about 195,000 businesses by increasing the small business tax change from 5% to 15%.
This represents a triple increased tax relief for businesses or farms earning less than $250,000 per year.
Other measures to support small businesses include a $200 million grant program for “newly opened start-ups despite the COVID-19 pandemic.” as well as a small business loan initiative to provide low-interest loans to growing businesses.
The governor also announced a new set of tax refunds for homeowners. This one-year program will benefit owners who earn less than $250,000 per year.
The average benefit under this program is estimated to be $970 in tax relief outside of New York and $425 in New York.
These tax breaks for businesses and homeowners come as Ms. Hochul and Mayor Adams appear to be trying to distance themselves from the far left of their party.
At a recent joint press conference, the two announced that there would be an increase in the number of police officers in the city’s subways as well as additional awareness efforts to deal with homelessness. Critics believe such measures will lead to more clashes between police and homeless people.
The plan for a balanced budget comes after the legalization of marijuana and sports betting, which the state says will each generate hundreds of millions of dollars in tax revenue in the coming years.
The income is expected to help fund new spending as well as pay for the inflated cost of the state’s Medicaid program. Just two years ago the estimated state budget gap for 2023 was $8.5 billion. Most of this shortfall was due to the rising cost of Medicaid.
Overall, the budget’s apparent fiscal prudence signals a new approach for the once-deficit state. The final budget will be due April 1 and is subject to change and approval by the state legislature.
Image: Governor Hochul speaks during a press conference on December 14, 2021. Reuters/Carlo Allegri