ALBANY, NY (TIP): New York Gov. Kathy Hochul presented a $227 billion state budget plan on Wednesday that includes more money for schools and public transit and raises taxes on cigarettes. She also put the spotlight on public safety, including another set of revisions to the state’s controversial bail reform laws.

The governor’s plan includes a 10% increase in school aid, finally fulfilling a nearly 20-year-old court order that said more money needs to be invested in the state’s poorest schools. Health care spending would be increased by about 8%, with $1 billion used for more psychiatric beds and residential mental health treatment facilities.

The governor is able to add the money because of larger-than-expected tax collections and funds remaining from federal pandemic relief programs that have led to an over $8 billion budget surplus.

“We’ve set the table for what should be one of the most prosperous times in our state’s history,” Hochul said. “But if New Yorkers don’t feel safe, they can’t afford to buy a home, they can’t pay their rent, the cost of everything keeps rising, then nothing we’ve done will make a difference.”

To that end, Hochul is proposing that 800,000 new housing units be built in the state over the next decade, financed mostly by private developers, but with 100,000 units of affordable housing paid for by the state.

No new broad-based taxes are proposed, but she wants to extend a temporary corporate tax surcharge. She’d add a payroll tax surcharge for businesses in the regions served by the downstate Metropolitan Transit Authority to help stem pandemic-related losses for the transit agency. Hochul also wants to raise taxes on a pack of cigarettes by $1 to $5.35.

The governor also detailed a public safety plan that includes $337 million to fight a surge in gun-related violence and provides $80 million to district attorneys to hire more prosecutors and to better follow recent statutes that require them to turn over evidence to defendants in a timely way.

She also wants to revise the state’s controversial bail reform laws to allow judges more discretion to set bail when people are charged with serious crimes. Hochul portrays the changes as an attempt to clear up confusion caused by previous changes to the 2019 laws that she said conflict with each other. A standard imposed during changes made last year requires judges to choose the “least restrictive means” to ensure that someone accused of a crime returns for court dates.

“We looked at this very thoughtfully, and realize what judges are telling us that they don’t have the clarity that they need to have, when someone’s before them, and meets the standards of being bail-eligible,” Hochul said.

MTA

Hochul wants to create a new revenue stream for the MTA that would keep massive service cuts and layoffs from going into effect.

“We have to face the harsh reality of MTA’s fiscal cliff,” Hochul said.

To offset this budget gap, Hochul is proposing a hike on the MTA payroll tax for New York City companies and would direct revenue from new casinos in the city towards funding the MTA.

However, even if this is approved, the MTA will still be moving forward with its 5.5% fare hikes this year.

There are legal snags in Hochul’s plan, under current state law, casino revenue is flagged for educational purposes, but MTA Chair Janno Lieber says businesses should be responsible for funding MTA service.

“We need them to pay a little slice of the cost of maintaining five days a week service when people are only coming in 2-4 days,” Lieber said. “That’s the rationale.”

NY Schools

Hochul wants to eliminate the regional cap on charter schools, which would allow more charter schools to open in the city. Per pupil funding for charter schools would increase by 4.5%.

“What we’re trying to do is something that is just common sense,” Hochul explained.

However, this already is kicking off a fierce fight with the state’s powerful Teacher’s Union.

In a statement, NYSUT President Andy Pallottaq said, “This will have a devastating impact on our public schools, especially for our state’s most underserved students. History shows that the corporate charter school industry is interested in making profits, not in the well-being of all students, educators, and families.” Hochul is also proposing a $3.1 billion or a 10% increase to annual School Aid, the largest School Aid increase in history, for a total of $34.5 billion. This includes fully funding the Foundation Aid formula for the first time in its 17-year history.

NY Migrant Crisis

Hochul is proposing to direct $1 billion in state aid to fund resettlement costs for migrants. This includes reimbursing the city for a share of shelter and relief centers, health care costs and National Guard members who have been assisting with this crisis.

Hochul also wants to set up a future funding formula so that costs are split evenly between the city, state, and federal government.

However, the federal government still has not committed to providing resources to aid in the migrant crisis.

Hochul said she spoke with the President on Wednesday.

“He did say that there be money coming from the federal government to help the city,” Hochul said. He did not give a number, but we believe that they should be picking up a significant share.”

NY Corporate Taxes:

Despite promising no new taxes, Hochul does want to extend a higher tax rate for wealthy corporations.

Former Governor Andrew Cuomo increased the tax rate for corporations taking in at least $5 million a year in revenue from 6.5% to 7.25% in 2021.

That three-year tax hike was meant to be temporary and is set to expire at the end of this year.

But Hochul is proposing extending that for at least another 3 years.

Some lawmakers would like to see this tax hike made permanent.

NY Mental Illness Help

Hochul wants to direct $890 million in capital to build 2,150 new residential beds for people with mental illness who need varying levels of support.

Hochul also wants to set aside $18 million in capital funding to open 150 State-operated inpatient psychiatric beds.

Bail Reform:

Hochul wants to spend $40 million in additional funding to hire hundreds of new prosecutors around the state and direct $20 million for pretrial services.

Hochul also wants to remove the “least restrictive means” standard from the state’s bail laws so that judges can have more discretion when setting bail.

This has been met with strong pushback in the past by Democratic state lawmakers but some recently have expressed that they are willing to work with Hochul on certain changes. Democrats who lead the state Legislature have been resistant to making more changes to bail reform.