Governor Hochul: “With our partners in the Legislature, we're going to take on some of the stubborn issues, like crime, especially retail theft, domestic violence, hate crimes. We'll also rebuild our mental health system after decades of under investment, and we'll focus on those with the most critical needs. And we'll keep our young people safe in school and online…We'll also tackle out of control costs and protect New Yorkers hard earned money, all while making it easier for them to deal with affordability, medical emergencies, and even those who need insulin – that they can pay for it without having to break the bank.”
Hochul: “We must crack down on persistent crime, revolutionize our mental health care system, invest in children and families, and build the economy of the future. And we'll continue our commitment to assist New York City in sheltering migrants. And keep the conversation about housing, which I began one year ago, keep it front and center.”
Earlier today, Governor Kathy Hochul announced the highlights of the FY 2025 Budget. This budget reflects Governor Hochul’s commitment to making New York more affordable, more livable and safer – while utilizing a fiscally responsible approach that keeps the State on a steady path for years to come.
VIDEO of the event is available on YouTube here and in TV quality (h.264, mp4) format here.
AUDIO of the Governor's remarks is available here.
PHOTOS of the event are available on the Governor's Flickr page.
A rush transcript of the Governor's remarks is available below:
I want to thank, first of all, on this Budget Day, all the people who worked so hard to bring us to this place. A lot of the staff that's not seen, the hard working individuals who are up through the night, and I'm grateful to all of them.
I also want to thank our extraordinary Lieutenant Governor Antonio Delgado, who is covering every inch of this State and carrying our message in such a powerful way. Thank you very much, Lieutenant Governor, for all your hard work.
The captain of our team, Secretary Karen Persichilli Keogh, has joined us, and our counsel Liz Fine. Director of State Operations, Kathryn Garcia– anything you want to know about handling a blizzard or snowstorm, Kathryn is the person who was there with us all weekend. Chief of Staff, Stacy Lynch, thank you for all you do, managing our team. And of course, our Josh Allen of the day, our State Budget Director, Blake Washington. Alright.
And, this is my team, but the team that represents the entire State is our leadership in the Legislature. And I want to thank Senate Majority Leader Andrea Stewart-Cousins for her friendship over many, many years and her willingness to roll up her sleeves and work so hard with us to serve the people of this State. Ladies and gentlemen, our Senate Majority Leader Andrea Stewart-Cousins. Speaker Carl Heastie, we won't talk football necessarily. A little rough weekend for you, but we're okay, okay. […] Also, our State Comptroller who understands the money behind this budget and manages it so very well, our great Comptroller, Tom DiNapoli.
Another person who's not unfamiliar with the cold weather, especially this weekend, Assembly Minority Leader, Will Barclay. A little rough up there in the North Country, but we got through it. Assemblymember Ed Ra joined us as well. Finance Chair Liz Krueger, Senator Tom O'Mara representing the Senate Minority, and all my other partners in government.
One week ago, as you know, you were there, we proudly presented my commonsense vision for New York State. The State of the State book outlined 204 policies, and at the time I put a spotlight on my top priorities – affordability, public safety, mental health, and economic growth. Well today, we have the opportunity to walk you through how we bring that vision to life in our fiscal year 2025 Executive Budget proposal.
Let me first say the number. This will be a $233 billion budget accomplished without raising income taxes. And today, New Yorkers will learn about how we're presenting a solid balanced budget without cuts or added burdens. Now, there is growth – State spending is up nearly $6 billion over last year. That's a 4.5 percent increase year over year. And across our major spending categories. This budget proves that you can have fiscal discipline and that can coexist with people driven progressive policies. And we did it with a laser focus on the needs of everyday New Yorkers. Now in the coming year, with our partners in the Legislature, we're going to take on some of the stubborn issues, like crime, especially retail theft, domestic violence, hate crimes.
We'll also rebuild our mental health system after decades of under investment, and we'll focus on those with the most critical needs. And we'll keep our young people safe in school and online. And we're going to help our kids get ahead by going back to basics when it comes to reading, helping our kids learn to swim, and we're also going to focus on our moms and our babies, focusing on maternal and infant mortality.
We'll also tackle out of control costs and protect New Yorkers hard earned money, all while making it easier for them to deal with affordability, medical emergencies, and even those who need insulin – that they can pay for it without having to break the bank. With unprecedented boldness, we'll ensure economic competitiveness, and we're going to lay claim to the future by making New York the global leader in AI research and development.
These are the priorities, and New Yorkers expect us to fight the right fights for them while focusing on delivering common sense solutions. Now, what this means, we're going to be building on, building on investments we made over the last two years in, for example, our infrastructure and continue to combat climate change.
But I'm also going to give New Yorkers some straight talk about our tough fiscal issues and how we're managing two of the largest drivers in our budget, including how we're sustainably investing in education and taking steps to control Medicaid spending – while taking care of those who do need our help.
And we're ready to share how we're ready to help tackle the humanitarian crisis that brought tens of thousands of migrants to New York City's doorstep. And we'll talk about addressing our inexcusable housing shortage. We talk about how we're taking care of New Yorkers, their health, but also the State's fiscal health.
Now let me start out, when I first became Governor, took an oath of office right in this room in August of 2021, I first asked, what are our reserves? Reserves that are used for one time emergencies and one time crises. At the time, they were only four percent of our budget. I felt that that left our State vulnerable. Having worked in municipal budgets for over a decade and a half, I knew it was important to have, at least have a 15 percent reserve. Now, we've worked hard with the Legislature, our leaders, to ensure that our past two budgets have achieved that goal, just landing a little bit over 15 percent. With that, we've been able to maintain a double A plus credit rating, which means our cost of borrowing is lower, the Comptroller knows this, it means we're also ready to weather any of the storms that lie ahead.
So, what you'll hear about is how this budget invests in programs and services New Yorkers rely on the most, while not spending the money we don't have. Let's start with our crime and public safety efforts. I will say it again, and I'll say it again and again. Keeping New Yorkers safe is my number one priority.
And over the last few years, for example, we've made historic investments in gun prevention programs, gun violence prevention – and it's paid off. Shootings and murders are way down. Gun seizures are up. And it's proof that when we invest in targeted strategies, and make the right decisions, we can change trends and make our communities safer.
But as we continue to take aim at gun violence, now is not the time to turn down the heat. Last year we committed a record $347 million, up over 53 percent over the previous year, because we took this so seriously. All to drive down gun violence that was affecting particularly our cities. We were able to tackle every angle of this, from peacemaker programs, youth mentorship programs, additional resources for police and district attorneys as well.
We were successful with those investments. Now we're zeroing in on other types of persistent crimes. Number one, you're all hearing about it, no matter where you go – retail theft. Even products and stores down the road here from our State's Capital, are under lock and key. This is not just New York City. It's affecting everywhere. So, to tackle retail theft for the first time ever, we're going to invest $40 million to establish dedicated teams with our state police, help our DA's offices and local police officers, and help them drive down this spike in retail theft. Secondly, domestic violence – we see headlines every single day of horrific murders and attacks, but these are more often committed by known partners, someone the victim knows, than by total strangers. And it's primarily women who faces violence at home. Sadly, the vast majority of these cases are actually dismissed. And most of the abusers are never prosecuted, so they go at it again and again. And that's why, in addition to support for survivors, my budget directs another $40 million to law enforcement and District Attorneys for new tools to gather evidence, prosecute abusers, and help survivors rebuild their lives.
The third area of crime we're going to tackle, hate crimes. We've seen such a huge uptick in the last few months, especially against Jewish and Muslim New Yorkers. Last year, working $25 million to combat hate crime. And now, with the shocking escalation, more crimes since the October 7th attack by Hamas on Israel, we now feel the need to increase that support by $10 million more for a total of $35 million. This will all be used to protect our most vulnerable communities and strengthen security at organizations and houses of worship.
In addition to crime, as I spoke about last week, mental health is also top of mind for our residents. Our system was underfunded for decades, and I've been working so hard with all of you to counteract this callous indifference since day one.
I'm proud to say that State investment in mental health is now up over 45 percent from $3.3 billion in 2022 to 4.8 billion in 2020, across the entire continuum of care and we'll keep investing. This year with $24 million more to help people with mental health problems who are involved in the criminal justice system, $37million for new programs for our street homeless population dealing with mental health, and $43 million to keep supportive housing units for those who really need the services.
Those suffering from mental health, from serious mental illness, need intensive supervision and support. That's why our budget will also commit $55 million for 200 new inpatient beds. And as we've talked about, our kids need so much help as well. Since COVID, there's been a nearly 70 percent uptick in the use of school based mental health clinics. Now that's assuming your school has a mental health clinic. And so, as part of our ongoing investments, we're directing more than $45 million towards school based and wraparound services, and peer to peer support, and strategies that keep our children safe and out of inpatient care and in their communities.
Another very important constituency that too often gets overlooked is our community with intellectual and developmental disabilities. They've suffered from disinvestment and neglect. We're setting out to change that. We're dedicating $45 million to expand services and independent living opportunities, and $6.7 million to become an employment first State. And we're continuing our efforts to reduce the devastation created by the opioid epidemic. We began distributing $200 million from the Opioid Resettlement Fund last year. We again appreciate the hard work that our Attorney General, Tish James, did to secure those funds. This year we'll put another $67 million toward harm reduction programs, medication treatment programs, and more prevention and recovery strategies.
Now let's turn to education. In my first months as Governor, I was determined to resolve the almost 20-year dispute regarding Foundation Aid and do what was right for our educational system. In partnership with the legislature, we increased school aid by the largest amount ever – $5 billion over two years. It was done by fully funding Foundation Aid for the first time. And with this year's increase, we'll have boosted Foundation Aid by 33 percent compared to 2021 funding levels. The $825 million increase I'm proposing this year will cement. This is the highest level of education funding in state history, at $35 billion, a 20 percent increase since I was sworn into office.
Now, I'm going to be straight with all of you. As much as we may want to, we are not going to be able to replicate the massive increases of the last two years. No one could have expected the extraordinary jumps in aid to recur annually. And remember this, between the federal government and the state, an additional $20 billion has been targeted to our schools over the last three and a half years.
And moreover, over the last decade, K through 12 school enrollment by 12 percent overall. It is well known that we spend vastly more on education per student, right now more than any time in history, more than any state. And it's common sense to ensure that the schools are getting the appropriate money based on their enrollments today compared to what they were a decade and a half ago. And with these record investments, we're also focused on improving student performance, like teaching kids how to read in a way they understand. Abandoning debunked theories, updating our curriculum to use proven teaching methods.
So, to get our teachers ready, we're going to help train them with $10 million to train 20,000 elementary school teachers and teaching assistants across the state. And regarding education, I once again support New York City Mayor Eric Adams request to continue mayoral accountability for the school system for another four years, which has been granted to every mayor since the year 2002.
Now, investing in our K through 12 programs builds the foundation for students to excel later in our outstanding public higher education system, both CUNY and SUNY. Over our past two budgets, we made $1.1 billion in investments to restore our institutions of higher learning to basically where they should have been. This year, we'll invest 207 million for SUNY and CUNY operations, and $1.2 billion for capital projects, keeping our commitment to them very much alive and well.
Speaking of alive and well, let's talk about health care. I'm going to address our spiraling costs and just tell you like it is. Our Medicaid spending exceeded our projections this year by $1.5 billion. Let me explain how it happened. First, 200,000 more people than anticipated remained on state-funded Medicaid after the federal government ended their supplemental pandemic support. Maintaining the coverage for these previously unenrolled residents now costs the state an additional $400 million annually. On top of that, to make matters worse, the state is still awaiting repayment of a $1.5 billion one-time bridge loan made to financially distressed hospitals, which actually are about one third of the hospitals in the state. It was all intended to keep them afloat while they're waiting for their federal disbursement. Helped them out. We've been left hanging. The federal government has paid the hospitals, but the majority thus far have not paid us. That also contributed to the $1.5 billion shortfall. This all means that the 2024 Medicaid global cap, which we are statutorily required to remain within, is projected to be exceeded over $1.5 billion. We're providing current year financial plan resources to manage it, but it just continues.
The growth in our Medicaid obligations, what we have to pay out, increased 11 percent just since last year. Over the last three years, our Medicaid spending is up 40 percent. And we're trying to find ways now to save over a billion dollars in Medicaid.
Now to address some of these long-term stressors facing our health care sector, I've impaneled two key resources. One is the New York State Commission on the Future of Healthcare and the New York State Master Plan for Aging. These efforts will help us identify ways to improve the long-term care sector, which is by far the fastest growing area of health care.
Our aging population, that's the answer. We knew this was coming, it's demographics, it is hit. The number of people needing this care is dramatically higher than it was even a decade ago. So, we're willing to work with our health care industry and other stakeholders, the legislature, to find the right answers. And we'll find ways to maximize our Medicaid dollars and reimagine the delivery system.
And there's some good news. After a year of hard work, we submitted our application, I believe, in September of 2022. And teaming up with powerhouses like 1199 SEIU and the SOMOS Community Care, and alongside our congressional delegation in Washington, the Democratic members helped us, CMS and the Biden administration approved my request for a $7.5 billion New York Health Equity Reform Waiver. It's called an 1115 waiver amendment. This will leverage almost $6 billion in federal funds coupled with $1.5 billion in state funds to support and protect our health care system. It'll help the safety net hospitals that are the lifelines of our underserved communities. It'll support our health care workforce from serious cuts.
In addition to all that, we're taking on another challenge where many states have not gone before. We're taking on rare diseases. This will help the one in 10 residents who suffer from these afflictions across the country and in our state because we think now is the time to finally give them some hope. We'll focus on many diseases, but for now we're starting $25 million to support patients and get them into clinical trials across the state, and how we can defeat ALS.
You know, the health of our economy deserves our energy and attention as well. That's why I spoke earlier about building the economy of the future and a bridge to the middle class and beyond in my State of State Address. Part of the strategy is to make New York the global leader in AI research and development. And to plant our flag, put down our marker, my budget includes a 10-year total of $275 million investment to create the Empire AI Consortium, which will harness the power of these emerging technologies, which will improve society and create great paying jobs. And we'll begin this year with $50 million from the state. And I already have $125 million committed from the private sector and university partners. And right here in Albany, we're also allocating $500 million in capital to establish the International Hub for Advanced Chip Research at Albany Nanotech.
There's a reason why Micron decided to come here, investing $100 billion, creating 50,000 jobs, because they know we're not afraid to seize these opportunities to establish New York's preeminence in the industries of the future. A trained, motivated workforce always sets us apart. It's what we're known for. We'll continue that tradition with $200 million to create four workforce development centers and strategic sites to support these industries Upstate, most likely along the thruway corridor. This is how we meet the needs of the 21st century.
We also have to continue investing in infrastructure and transportation systems, which had been neglected before I took office. Our fiscal year ‘25 budget allocates $7.9 billion in state operating aid to the MTA, which last year, and I want to thank our legislators again for working so closely and so hard with us to save the MTA from the looming fiscal cliff a year ago, and keeping New York City economy and its way of life on track. Transit systems across the state are supported with Upstate receiving 323 million, and non-MTA downstate receiving $551 million, all a 5.4 percent increase. And this budget aligns with our record five-year DOT capital plan, providing nearly $7.6 billion in planned funding. That's a lot of jobs, that's a lot of projects, that's how we move forward.
We also want to deliver the kind of transformative change that can remake communities and improve lives. This budget includes progress on initiatives I announced last year, including the $45 million to advance design for the Interborough Express to connect residents from Jackson Heights to Bay Ridge with new transit options. We're going to expand the Second Avenue Subway westwards with $16 million this year to facilitate a feasibility study, and the engineering needed to build three new subway stops. You know, with our investments in AI, high-tech manufacturing, infrastructure, there's one thing that's crystal clear. There's no stopping New York.
Let's talk about something that's really personally important to me. Our climate goals. As a mom, as a grandma, we all have to be focused on the future that we're leaving for our children. We are, so proudly, saying that we are the most ambitious in the nation with our goals. We've committed to take decisive action, the Legislature, this administration. We have to do it to meet the scale and the urgency of the climate crisis, all while growing our economy and protecting our consumers. This year, we're investing $47 million to plant over 25 million trees across the State by 2033. I might be calling on all of you to join me on Arbor Day to plant a lot of trees. That's a big goal. We're also continuing to invest in transitioning to clean energy, using our $4.2 billion Clean Water, Clean Air, Green Jobs Environmental Bond Act, using those funds. This year, we're committing $400 million for the Environmental Protection Fund. $100 million for a Superfund cleanup, and $500 million for clean water over the next two years.
And to protect our communities from floods, whether it's the Hudson Valley, the Southern Tier, Long Island, we're investing $435 million in resiliency projects. That's not the only way we're looking out for homeowners. As we talked about, you saw that terrible coastal flooding on Long Island this past week, wiping out beaches, putting people's homes in harm's way.
That's why we're investing $250 million of the funds for a voluntary buyout program for families to help them move to safer ground. Then we'll transform these areas into resilient natural habitats to protect these communities. Talk about protecting communities and protecting lives. And water, tragically, drownings have reached record highs in recent years, claiming over 230 lives in 2021 alone.
Black and brown communities are at greater risk due to decades of disinvestment in even building swimming facilities or giving free or low-cost swim lessons. So, to right this wrong, we're proposing $160 million to build new pools, hire lifeguards, increase swim lessons, and expand these opportunities all over the State.
So, we're taking action with common sense solutions that are simple, easy to implement, just like those. But the truth is, we can't spend like there's no tomorrow, because tomorrow always comes. And some will say that by increasing our budget by an extraordinary $4.5 billion is not enough, that somehow this increase is actually a cut. Let me tell you, it's not. A 4.5 percent increase is simply not a cut.
The truth is sizable deficits are projected in coming years. And our discipline now will keep us out of a deeper hole in the future. And yes, I know, it's a lot more pleasant to say yes to everybody. But now we're called upon to make the tough decisions. And there are significant challenges.
New York continues to carry the burden of sheltering more than 69,000 migrants. Since day one, I have said that this is ultimately the responsibility of the federal government to address this crisis. Congress, the House of Representatives in particular, and the White House, must remain at the negotiating table until they restore the rule of law on our border, fix our asylum system and provide relief to States like New York who've been shouldering this burden for far too long.
This Friday, I'll be traveling once again to Washington to advocate for effective immigration reform, a stronger border and increased support from the federal government for New York. But until we see a change in federal policy that slows the flow of new arrivals, we're going to be swimming against the tide.
For the last six months, with the City of New York, with the support from my team, they've been successful in moving approximately 100 and – I'm sorry, 10,800 – 10,800 migrants per month out of the shelter. Sounds good, doesn't it? Except every month, 13,600 new individuals arrive. That's how you just can't get your head above water.
So, to help the City, last year, our budget we worked on together allocated nearly $1.5 billion to provide shelter. It then ended up growing to $1.9 billion when you added in the costs of our National Guard and health care and other services we've been providing, legal services. And because these extraordinary circumstances, which show no sign of abating right now, we have no choice but to plan for those costs again in this year's budget.
The State will now maintain that same $1.1 billion in funding. But because the number of migrants and the expenses have only grown, I am proposing that we draw $500 million from State reserves that are intended for one-time emergencies like this.
This will help manage the migrant crisis for a total of $2.4 billion. Now you know how I'm protecting that reserve. I remain firmly committed to ensuring that our reserves do not drop below the 15 percent. But I'm willing to use the excess generated by our sound investment practices.
We're doing this not just because it's the right thing to do for the migrants and for the City of New York. We also know that companies won't do business in New York if there are thousands of people sleeping on the streets, or the quality of life is dramatically impacted because the City is forced to cut essential services.
We must support the City of New York in this moment to avoid these disastrous effects, and to protect our economy and State revenues in the short term and long term as well.
We're going to continue focusing on securing work authorization and put the migrants and asylum workers to work. Put them to work. That's exactly what they came here for. That'll continue to be our focus.
Where do we put people? It's not like we have a lot of housing, is there? Let's talk about our housing crisis, our shortage. Housing unsheltered New Yorkers, long term residents and new arrivals alike remains a challenge as long as we lack sufficient affordable housing options. Even federal vouchers are meaningless if there's no available apartment inventory.
At least 10,000 individuals right now – individuals and families – are in New York City homeless shelters holding on to a housing voucher and they can't find an apartment anywhere.
When I presented a transformative housing plan last year, a lot of the members of the Legislature said they wouldn't support it. Others said they wanted local control for housing decisions. Okay, let's put that to the test.
New York City, a local government, should get the control – the local control they've been asking for. Like a new tax incentive for housing development in New York City, so there are places for the people to go. We can get them out of shelters. We can give them that opportunity to be liberated from that environment.
We also want to extend eligibility for projects that 421-a, because until then, there is no affordable housing being built. I want the housing components of those projects. Incentives for converting office buildings to housing? Why not. The alternative is vacant or underutilized buildings in the heart of New York City. We can stop that. And we should eliminate outdated density restrictions. They were put in place since the 1930s on housing development in Manhattan. And create a pathway to legalize basement apartments because we need every bit of space we can.
Now, as Governor, I'll continue to take executive actions on housing. And I heard loud and clear from my friends in the Legislature that they believe more in carrots than sticks. Let's do that too. To incentivize housing growth in the suburbs, and for transit-oriented development, which makes all the sense in the world.
So, we'll do that, we'll put the carrots to the test as well. I will make a pro-housing designation a requirement, not an option, but a requirement for municipalities to access over $650 million in discretionary funds. We'll also dedicate $500 million in capital funds to develop up to 15,000 housing units on State owned property. And we'll continue funding our five year, $25 billion housing plan, which will create or preserve 100,000 affordable homes.
But everyone knows this. Even with these historic investments, our State still needs hundreds and hundreds of thousands of new homes to solve our housing crisis.
The answer, my friends, is not blowing in the wind, it's shovels in the ground. And I know we can do this.
When I delivered my State of the State address last week, I said that even in our darkest hours, I could still see light on the horizon. I stand by that message today, and I stand by my commitment to fight the right fights for New Yorkers. And pursue the common good with common sense by seeking common ground.
To recap, to start, we must crack down on persistent crime, revolutionize our mental health care system, invest in children and families, and build the economy of the future. And we'll continue our commitment to assist New York City in sheltering migrants. And keep the conversation about housing, which I began one year ago, keep it front and center.
All this can and must be accomplished without raising income taxes on New Yorkers any further, so we can slow down the out migration that has resulted in the loss of $6 billion in tax receipts this year alone. We could have used that money.
But don't forget that this Executive Budget that I presented today comes on the heels of two years of unprecedented, incredible growth, which corrected years and years of underinvestment in everything from education to health care to mental health. When we made those historic investments, hardworking New Yorkers understood, and I was clear in saying, that they are one-time infusions of funds to right the ship and were never intended to be recurring expenses.
And despite that some will loudly protest that they see an increase, “it's not really an increase, but a cut,” they'll be wrong.
New Yorkers doing their bills at the kitchen table understand this. They know what it's like to make hard financial decisions for their family's long-term wellbeing. Some of these conversations will be hard. We'll have to compromise. We'll have to collaborate. But ultimately, we will make those decisions. We'll do it together. And I know together as my partners in the Legislature that we can get this done.
Together, we'll build our New York, our future. Thank you.