Governor Kathy Hochul called for a new tax break to promote affordable housing and increase support for fighting crime in New York City.
"We've traversed rocky terrain, but there are still switchbacks before the summit. Across our state and our nation, people worry that a safe and affordable life is unattainable," Democrat Hochul said Tuesday.
Hochul's annual State of the State speech hinted at a new willingness to challenge state legislators after two years of pledges to create a more collegial atmosphere in Albany, in contrast to her predecessor, Andrew Cuomo.
In a forward to her
She also called out the Democrat-led legislature for having "failed to act" to create more housing amid a dire shortage.
"Let's be honest with New Yorkers. The only thing that will solve this problem is building hundreds and hundreds of thousands of homes," Hochul said in the speech.
The new tone comes after lawmakers in her own party dealt her a series of politically damaging setbacks last year, thwarting her pick for a judgeship and her ambitious plans to build new housing statewide.
"We cannot spend money we do not have," Hochul said, acknowledging a budget shortfall. She said she would discuss how to handle New York City's migrant crisis and other difficult spending questions when she delivers her proposed budget later this month.
Trying again
Hochul said she will push for a new tax abatement to encourage the construction of new rental and affordable housing in New York City. A similar proposal stalled in the legislature last year amid progressive demands for expanded tenant protections.
The movement of residents out of New York to neighboring states comes from a lack of housing options, Hochul said. "People aren't necessarily looking for warmer weather, lower taxes."
Housing construction has been "anemic" in New York City since the 2022 expiration of a tax abatement known as 421-a in 2022, which gave developers a property tax break for decades in exchange for limiting rents on many units.
Hochul said a restoration of that abatement will need new requirements for below-market housing and wage standards for building service and construction workers.
She pledged to lift a floor-area ratio cap that would allow developers to build more densely and will pursue legislation legalizing basement apartments.
Hochul also offered to provide tax credits to commercial property owners willing to convert their unused spaces into housing.
Hochul and legislative leaders have yet to officially back a "good cause" eviction bill sought by progressives that would limit rent increases and ensure lease renewals for tenants across the state. Legislative leaders could include a version of that proposal to maintain progressive support for a broader housing deal.
Conflict with progressives
Hochul steps into 2024 with a history of disputes with progressives who hold some sway in Albany. Lawmakers' snub last year on her housing plan followed the historic rejection of her first pick to lead the state's highest court.
Hochul also angered progressives during the 2023 budget negotiations by successfully pushing for bail law changes and more charter schools over lawmakers' resistance.
Hochul signed hundreds of bills into law in the second half of the year, which helped relations, but she then disappointed lawmakers by vetoing measures like a
"I think the relationship has recovered, it just remains to be seen what is really going to set the tone in 2024," said political consultant Trip Yang of Hochul ahead of Hochul's address.
Budget gap
New York's $4.3 billion budget gap pales in comparison to the $68 billion deficit that Gov. Gavin Newsom faces in California.
Still, the shortfall sets up a conflict over taxes. Hochul said Tuesday that she will protect New Yorkers' "hard-earned money from bad actors and predatory lenders, and from politicians who want to raise your taxes."
Assembly Speaker Carl Heastie (D) and state Senate Majority Leader Andrea Stewart-Cousins (D) haven't ruled out calling for higher taxes. Hochul is also resistant to raising taxes on capital gains and inherited wealth.
Reducing spending without tax hikes will be difficult, considering roughly half of the state budget goes to education and Medicaid, the low-income health program.
New York State United Teachers and 1199SEIU — the largest union in the state — will push for education and health-care funds while likely opposing any budget cuts. Many lawmakers will be seeking their endorsements for reelection around the same time.
The legislative leaders could push tax increases while offering concessions to Hochul on other matters. They could use their supermajorities to override any vetoes, but such a move would be unprecedented.
Cannabis, theft
Hochul's speech also included promises to help New York City Mayor Eric Adams achieve some of his key legislative priorities, including a pledge to amend state law to give local police more power to padlock and seal illegal pot shops.
Adams has bemoaned the city's lack of enforcement authority to address the pot shops, an estimated 5,000 of which have opened across New York City over the past two years.
Hochul pledged to combat organized retail theft, a phenomenon that's been particularly acute in New York City, promising more funding to district attorneys offices and law enforcement to tackle the problem.
Labor
Hochul's proposals touch on a handful of hot-button labor and employment issues, but with little in the way of enforceable policy change.
The governor's office noted the worrying growth of child labor violations and proposed developing a "youth workers bill of rights" that would educate underage workers on the laws their employers must follow.
On the issue of heat dangers faced by construction, farm and other outdoor workers, Hochul tasked the state labor department with developing guidance for employers on ways to protect those laborers, stopping short of proposing a heat-safety regulation as California and a handful other states have done.
The governor also proposed requiring that businesses provide paid breaks for workers expressing breast milk for their nursing children — complementing Hochul's previous announcement of expanding paid family leave to cover prenatal care visits.
Mental, maternal health
Several proposals aim to make it easier for New Yorkers to address their mental health, a leading driver of homelessness.
Hochul said the state Office of Mental Health will monitor data provided by law enforcement, hospitals, prisons and health-care providers to help people access services in addition to pushing to create additional mental health courts and 200 psychiatric beds statewide.
Hochul's administration will also introduce legislation to double fines on health insurers who don't comply with state rules requiring access to mental health services that equals the availability of physical care.
Hochul wants to tackle maternal and infant mortality, which is on the rise for the first time in more than 20 years. Last week she unveiled a proposal to add prenatal care into the state's paid family leave program.
A focus on maternal health has personal appeal to influential lawmakers like Assemblywoman Rodneyse Bichotte-Hermelyn (D), who also chairs the Democratic Party in Brooklyn.
Consumer data
Hochul said the state Department of Financial Services will begin requiring licenses for businesses that engage in "Buy Now, Pay Later" loans.
That move will enable the state to better supervise how companies harvest consumer data, report customers to credit agencies and push people to make bigger purchases than they otherwise would with cash or traditional credit cards.
Hochul also aims to advance two child digital privacy bills that would crack down on algorithmic social media feeds and data collection to boost mental health.
Little said on migrants
The 180-page, 50,000 word policy book accompanying Hochul's address was notable in one item that was missing. Nowhere in the document did Hochul mention the word "migrant" or "asylum-seeker," despite the primacy of what Adams has repeatedly described as the city's migrant "crisis."
More than 160,000 migrants have come to New York City since the spring of 2022, and roughly 70,000 currently remain in the city's care, straining the city's shelter capacity and finances to what Adams has said is a breaking point.
In a rare public point of contention with Hochul, with whom he's maintained an outwardly cordial working relationship, Adams has for months called on Hochul's administration to do more to help the city pay for the cost to shelter and care for the migrants.
— With assistance from Danielle Muoio Dunn and Chris Marr
