Record Investments in Healthcare, Education, Housing, Infrastructure, and the Environment
Increases State Reserves to 15 Percent of State Operating Funds Spending by 2025
Strengthens Public Safety and Government Ethics
Governor Kathy Hochul today announced the highlights of the historic FY 2023 Budget, which blends record investments into the long-term future of New York along with significant one-time aid to help recover from the COVID-19 pandemic and unprecedented fiscal responsibility. This historic blueprint meets the once-in-a-generation moment to invest in New Yorkers by rebuilding the healthcare economy, building the education system of the future, reducing the tax burden for those who need it most, improving the state's transportation and housing infrastructure, combating climate change, creating jobs, and improving public safety and ethics in government.
In pairing bold vision with fiscal responsibility, the Budget brings the State's reserves to 15 percent of State Operating Funds spending by 2025 - a level never seen before. Planned deposits are: $5 billion in FY 2022, $5.1 billion in FY 2023, $2.5 billion in FY 2024 and $2.9 billion in FY 2025.
"When I was sworn in, I promised that every decision I make will go through one lens: what is best for New Yorkers?" Governor Hochul said. "This budget fulfills that promise and provides us with a blueprint for the short- and long-term future. We have a once-in-a-generation opportunity to not just bring relief to families and put more money in people's pockets today, but also to make historic investments in New Yorkers for years ahead. With this budget we are seizing that opportunity and ushering in a new era of a stronger, safer, more prosperous New York State."
Highlights of the FY 2023 Budget include:
The budget agreement includes a historic $20 billion multi-year healthcare investment in the FY 2023 State Budget. Creating better working conditions for healthcare workers will be a priority, with $1.2 billion dedicated to frontline healthcare worker bonuses, as well as a $4.5 billion multi-year investment in payment reform. Other landmark investments include $2.4 billion being directed to improving healthcare infrastructure and $3.9 billion in funding to provide aid to hospitals struggling financially from the COVID-19 pandemic. Another $7.7 billion will be spent over four years to increase the home care worker minimum wage by $3. These groundbreaking investments will work together to improve working conditions and grow the workforce by 20 percent over the next five years, and improve the healthcare industry for all New Yorkers.
The State Budget provides unprecedented support to build the education system of the future with $31.5 billion in total School Aid for School Year 2023, the highest level of State aid ever. This investment represents a year-to-year increase of $2.1 billion (7.2 percent) compared to School Year 2022, including a $1.5 billion Foundation Aid increase, $125 million of additional funding for full-day prekindergarten, and a $451 million increase in all other School Aid programs. The Budget also includes transformative investments in SUNY and CUNY with more than $500 million in additional support of the systems' operations and $2.2 billion to fund capital projects on SUNY and CUNY campuses. Additionally, it includes $150 million to expand TAP, a critical lifeline for students that is currently largely unavailable to those studying part time, to cover students enrolled in six or more credits of study at a SUNY, CUNY, or not-for-profit independent college. This investment in TAP is estimated to provide a life changing opportunity to 75,000 additional New York students annually.
The Budget includes a new historic $32.8 billion five-year capital plan for programs and proposed projects administered by the New York State Department of Transportation. The adoption of this new capital plan, the largest investment ever in the state's transportation infrastructure, represents a $9.4 billion (40.2 percent) increase over the prior five-year plan period. The new transportation plan prioritizes and refocuses investments on State and local roads and bridges in smaller municipalities; makes our state's communities more resilient to extreme weather events; and incorporates strategic investments to reconnect neighborhoods and facilitate regional economic growth, while creating thousands of new jobs.
The Budget will authorize an additional $1.2 billion for the landmark Clean Water, Clean Air, and Green Jobs Environmental Bond Act, bringing the total investment to $4.2 billion. In addition to the Bond Act, the Budget contains a record $400 million Environmental Protection Fund to support climate change mitigation projects, improve agricultural resources, protect our water sources, advance conservation efforts, and provide recreational opportunities for all New Yorkers, as well as a $500 million investment to develop the State's offshore wind supply chains and port infrastructure. This nation-leading initiative will create 2,000 jobs in a growing industry, while helping to make New York the offshore wind capital of the country for years to come. The Budget also helps protect public health and advances environmental and economic restoration by extending and enhancing New York's successful Brownfield Cleanup Program and includes an additional $500 million in clean water infrastructure funding, bringing the State's total clean water investment to $4.5 billion since 2017.
The Budget will advance a bold, comprehensive, $25 billion, five-year housing plan that tackles systemic inequities by creating and preserving 100,000 affordable homes, including 10,000 homes with support services for vulnerable populations. This plan also electrifies an additional 50,000 homes as part of the State's plan to electrify one million homes and make another one million electrification-ready. Funding includes $5.7 billion in capital resources, $8.8 billion in State and Federal tax credits and other federal allocations, and $11 billion to support the operation of shelters and supportive housing units and to provide rental subsidies.
The Budget reinforces Governor Hochul's commitment to giving children the best possible chance at success and parents the ability to participate and advance in the workforce by investing $7 billion over four years, more than doubling New York's support for child care. The Budget increases the income eligibility threshold for child care subsidies to 300 percent of the federal poverty level ($83,250 for a family of four), extending eligibility to more than half of young children in New York. The Budget also expands access to high quality child care by increasing the child care market rate to include 80 percent of providers. This change will broaden the child care options available to subsidy families while also increasing reimbursements for child care providers. To further support providers, the backbone of the industry, the Budget invests $343 million provide a second round of provider stabilization grants. These grants will go directly to providers and their employees, with 75 percent of the grants dedicated to workforce support, including wage increases, bonuses, tuition reimbursement, and contributions to staff retirement plans and health insurance costs.
The Budget supports programs that are a lifeline for vulnerable New Yorkers as the global pandemic made plain the fragile connection many have to basic needs. As part of an agreement with the legislature to spend $2 billion in pandemic recovery reserves on one-time investments, the FY 2023 Enacted Budget includes:
- $800 million in state funds for the Emergency Rental Assistance Program (ERAP), which has so far paid or obligated $2.1 billion for rental arrears, supporting more than 160,000 low and moderate-income households at risk of housing instability;
- $800 million for hospitals still experiencing financial distress from the COVID-19 pandemic;
- $250 million in utility arrear assistance;
- $125 million in homeowner and landlord assistance; and
- $25 million in other one-time, non-recurring investments.
The Budget includes meaningful and significant changes to our public safety laws to make our state safer, to tackle the pervasive unease many are feeling in our streets, and to make our criminal justice system more fair for all. These changes include:
- Allowing judges to set bail for gun charges that were previously subject only to release;
- Adding factors that judges must consider when setting bail for any bail-eligible offense;
- Closing problematic loopholes on Raise the Age and Discovery; and
- Making Kendra's Law more effective.
The Budget also includes $90 million in new resources to support discovery reform implementation and pretrial services. This includes:
- A $65 million investment in approaches to discovery that ensure public safety, including system-wide coordination, technology, expanded storage capabilities, and administrative support; and
- $25 million for pretrial services, alternative to incarceration services and reentry programs. These services include reminders and monitoring of court attendance, screening, and referrals for mental health and substance abuse treatment.
The Budget will also include $227 million to fund bold initiatives that will strengthen the gun violence prevention efforts of law enforcement and community-based organizations. Through these comprehensive actions, we will work to restore New Yorkers' sense of safety and community by tripling the state's gun violence intelligence resources, providing $13.1 million to expand the use of Community Stabilization Units,tripling investment in New York's SNUG outreach program, and allocating $20 million to respond to regional needs in the aftermath of gun violence.
The Budget will accelerate tax relief to middle-class New Yorkers, the backbone of our economy, by providing the fully implemented reduced tax rates beginning in Tax Year 2023, to deliver relief to 6.1 million New Yorkers. Small businesses were hit particularly hard by the pandemic downturn. The Budget also provides significant support for New York's small businesses, including a new capped refundable tax relief program targeting COVID-19-related expenses. The program provides up to $250 million in additional relief to small businesses. The Budget also creates a new property tax relief credit, the Homeowner Tax Rebate Credit, for eligible low- and middle-income households, as well as eligible senior households. Under this program, basic STAR exemption and credit beneficiaries with incomes below $250,000 and Enhanced STAR recipients are eligible for the property tax rebate where the benefit is a percentage of the homeowners' existing STAR benefit. This $2.2 billion investment will help approximately 2.5 million homeowners.
To tackle the high cost of fuel, which has surged in recent months as a result of the war in Ukraine, New York will suspend the state sales tax imposed on fuel, the motor fuel tax, and the metropolitan commuter transportation district sales tax imposed on gasoline and highway diesel from June through December 2022, providing an estimated $585 million in relief for working families and businesses statewide. The State will make roads and bridges and public transit entities such as the Metropolitan Transportation Authority and local transit systems throughout the state whole by replacing estimated lost tax revenue using the State General Fund. Additionally, localities would have the option to cap the price their applicable local sales tax rate is imposed on at $4 per gallon.
Making Critical Reforms to Restore Faith in Government
The Budget will improve ethics and restore New Yorkers' trust in state government by creating a new entity, the "Commission on Ethics and Lobbying in Government," to replace the broken Joint Commission on Public Ethics. Nominees for the 11-member Commission will be put forward by the Governor, Senate, Assembly, Comptroller, and Attorney General and then reviewed by law school deans for approval or denial. The Commission will work differently and more transparently than before with special voting requirements eliminated, the body and votes subject to the Open Meetings Law and FOIL, any breach of confidentiality referable to the Attorney General, and improved training of staff and notice to victims who have suffered harm by their perpetrators. The Commission is also required to hold an annual meeting to report on its activities and hear feedback from the public and any findings must be reported in 20 days, down from the previous 45 days. The Budget also includes measures to increase transparency, such as adding domestic partners to be disclosed in financial disclosure forms.
The Budget will allow for the sale of alcoholic beverages "to go" for off-premises consumption. To-go drinks were a critical revenue stream for New York's bars and restaurants during the pandemic, helping many small businesses across the state pay their rent or mortgages. The Budget will continue supporting the recovery of bars and restaurants. The new policy addresses the concerns of small businesses operating liquor stores - by requiring food orders, sealed containers, and no bottle sales. Additionally, requiring sealed containers, coupled with open container laws in effect in every municipality of the state, will ensure concerns of public drinking are addressed. The Budget also calls for a comprehensive look at all Alcohol and Beverage Control laws to ensure they are applied and updated relating to this new legislation.
Since the governor proposed her Executive Budget in January, additional revenue has been forecast and surplus funds have been realized. The total Budget for FY 2023 is currently estimated at approximately $221 billion, based on a preliminary assessment of the negotiated changes to the Executive proposal. The spending plan will include the $2 billion for pandemic assistance that Governor Hochul indicated was available for use when the Executive Budget was released in January, but had not been included as a spending line-item.