What’s in the New York state budget

ALBANY — The state budget is finished and signed into law, and among the hundreds of pages of legislative language and billions of dollars in taxation and spending is a significant amount of non-budget related policy changes to things like environmental goals, construction reviews and auto insurance.

The final plan spends $268.5 billion, the largest in state history as most annual budgets tend to be in New York. That’s $113 billion more than the 2016-17 state budget 10 years ago.

Within the 10 bills that make up the state budget, many of the issues that Gov. Kathleen C. Hochul has pushed for this year have been addressed. The governor has some of her most significant leverage in budget talks, and as a result uses those negotiations and the legislation itself to push key issues that may not advance through the typical legislative process led by the Senate and Assembly.

CLIMATE ACT

One of the most controversial issues Hochul pushed for this year was a plan to change some aspects of the state’s keystone climate law, the Climate Leadership and Community Protection Act, or Climate Act. Hochul did not outline her plan for specific changes to the law until March 20, well after submitting her executive budget proposal and just 12 days before the April 1 budget deadline. Actual legislative language specifying what Hochul wanted to change in the law was not shared until the budget bill containing it was printed on Tuesday.

Hochul won a number of changes to the Climate Act that will delay the requirement that the state implement regulations to meet the act’s goals to the end of 2028; the original bill had a 2024 deadline and a court ruled that the state was in violation of the law by not putting regulations in place. State regulators have drafted a plan for a carbon tax program that will reinvest its revenues into green and carbon-neutral infrastructure. But Hochul argues, citing a report from the state energy research authority NYSERDA, that a carbon tax program would drive energy costs up by thousands of dollars for New Yorkers, with upstate two-car homes likely to bear upward of $4,000 in additional costs.

The carbon tax was not specifically called for in the original Climate Act, but rather identified by regulators as one of the more reasonable methods to achieve the act’s requirements. The changes made in the budget this year now name it as “cap and invest,” while not specifically requiring it come into effect.

The tweaked Climate Act also now includes a legislative workaround that promotes a 60% reduction in emissions from 1990 levels by 2040, while leaving in place the existing 40% cut by 2030 language as a goal rather than a mandate. The long-term goal of cutting emissions by 85% by 2050 is still in place. And the new legislation also changes the accounting timelines for the effects of greenhouse gasses, pushing New York to use a more common 100-year timeframe rather than the 20-year standard set in the original Climate Act.

These changes to the Climate Act are extremely unpopular among environmentalists and progressives in the state legislature; protesters repeatedly marched through the state Capitol, blocked entrance to the legislative chambers and the governor’s office as well as streets outside the Capitol to protest any efforts to rewrite the law. Discussions over changes to the law dominated much of the budget negotiations among legislative leaders and the governor.

AUTO INSURANCE

Another hard-fought issue that Hochul pushed through the budget this year was a list of changes to auto insurance and liability laws, aimed at lowering the cost of car insurance in the state. Hochul’s original list of changes wasn’t fully put in place by the budget legislation, and the legislature put in a number of adjustments. Key changes include a ban on “red lining” or using customer data like ZIP code or homeownership status to set the price of coverage, a change to state law that will require insurers get approval for any rate hikes, ending the current system that let companies hike rates by 5% annually without regulatory review.

A plan that came from Hochul to redefine what constitutes “serious injury,” in state law, restricting it to lower payouts to accident victims, also made it through. The new laws also block anyone found to be more than 50% responsible for an accident from getting an insurance payout. Other changes include a cap on “pain and suffering” payouts to $100,000 if they were committing a crime at the time of the accident and a series of changes meant to give law enforcement personnel more resources to investigate and prosecute attempted insurance fraud.

PENSIONS

The budget also makes changes to Tier VI of the state’s employee pension program, which covers most state employees hired after 2012. The tier includes higher contribution requirements, lower overtime caps and later retirement ages for employees covered by it, and was introduced in an effort to sustain the state’s pension fund as older state employees with more generous pension plans retire.

Public employee unions have complained for more than a decade about the plan and have pushed for changes; this year, some of those changes finally came to pass. This includes a slight cut to the contribution requirements from a range of 3% to 6% of annual pay down to a range of 3% to 5.75%.

For teachers, the retirement age has been cut to 58 provided the teacher has worked for 30 years. Unions were asking for a blanket retirement age cut to 55 for all employees on Tier VI. And state employees also got a bump to the amount of annual overtime they can count toward their salary for pension purposes up to $30,000 for most employees and up to 25% of wages for state police and professional firefighters. The total cost of the changes is $577 million per year, with local governments expected to pick up the bulk of the extra costs.

Another pension change was made for correction officers, enacting the “death gamble” bill that will allow the family of officers who die in the line of duty after their retirement age to collect on their pension benefits. That will come with a $1.7 million annual cost, plus a one-time $25.6 million lump sum payment to retroactively award pensions to the families of older officers who died at work.

Less controversial issues included in this year’s budget are a new exemption for tipped income, “no tax on tips,” and a new 75% tax on nicotine pouch products like Zyn. The new tax will generate about $54 million, while the tipped income exemption will cost about $50 million per year.

Lawmakers also authorized a one-time check to be issued to most New York taxpayers, expected to reach about 8.4 million people. At the cost of $1 billion, checks from $100 to $200 will go out to taxpayers who filed state income taxes last year and made less than $300,000 as a joint filing couple or $150,000 as an individual filer.

As the topic of high utility costs continues across New York, lawmakers also authorized a special commission that will be tasked with reviewing the causes of rising electricity costs and recommend savings; the commission will be made up of appointees from the governor and the legislature, without any space for the Republican minority to select members.

Some tweaks to regulations on utility companies will require they report the salaries of their top executives and their average employee pay when seeking a rate hike, and also requires they submit a second, more reserved rate plan when seeking rate hikes. It also adds a new requirement that when a company generates more profit than anticipated under their rate plans, they refund customers with bill credits rather than holding onto the extra cash.

In an attempt to make the construction of new housing more affordable, state lawmakers also approved the bulk of the governor’s proposal to exempt a limited list of housing and mixed-use developments from the state Environmental Quality Review Act, which requires lengthy and expensive reviews of a project’s impact on the space around it.

Before the changes were made, only single-family and small multi-unit housing projects were exempt from the review, but with the budget passed the exemption increases dramatically. Now, projects of up to up to 300 units in upstate cities and up to 100 in upstate rural areas that are slated for previously used land with access to existing water and sewer systems can go forward without a SEQRA review. In towns without zoning, projects of up to 20 units can go forward without the review, provided they have access to an existing water and sewer and are on previously used land.

Other projects were exempted from the review as well; public parks, trails, some water projects and schools in New York City can now also move forward without a SERQA review.

IMMIGRATION

Hochul sought only a few public safety-related issues in the state budget this year; the most significant being her push to limit the use of local law enforcement in immigration enforcement efforts. While Republicans and the Trump administration have portrayed her policy as a “sanctuary state” policy, Hochul has taken great efforts to combat that narrative.

“New York is not a sanctuary for criminals,” she told reporters in Albany on Thursday after a budget bill signing ceremony.

Hochul’s “Local Cops, Local Crimes” plan will bar any state office or local government agency, including local sheriff’s offices, from entering into or maintaining 287(g) agreements with federal immigration authorities. Those agreements can include allowing immigration agents to use local jails to hold immigration detainees, or to check jail populations for immigrants, as well as basic information-sharing agreements and in some cases, full deputization of local police officers to carry out immigration enforcement.

In St. Lawrence County, legislators approved a 287(g) agreement earlier this year giving sheriff’s deputies at the county jail the training and power to flag inmates wanted by federal immigration authorities. That agreement would have to end under state law as it stands now.

Over a period of time ranging from 90 days to 6 months depending on the agreements, the state will now require that local law enforcement agencies terminate formal or informal cooperation agreements with immigration officials, and restrict their access to non-public areas of their facilities. But it doesn’t fully block local police from working with federal agents; if an officer has a reasonable suspicion that someone in their custody has committed a crime, they can flag them to federal immigration authorities without penalty. That’s gotten criticism from progressives in Albany, who have spent most of the last year pushing for a bill that would essentially sever all contact between state and local officials with federal immigration officials unless a judge signs a warrant for the specific information or individual being sought by authorities.

The package passed in the budget does restrict state and local employees from cooperating with ICE in civil immigration enforcement actions; they can only share information in pursuit of a criminal, and mostly only with a signed warrant.

Local authorities including Nassau County’s executive Bruce R. Blakeman, the GOP candidate for governor, have moved to sue the state over this law, seeking to overturn it and continue their agreements with Immigration and Customs Enforcement. Blakeman’s county has entered into the most expansive 287(g) agreement possible, authorizing sheriff’s deputies and some local police to act as ICE agents within Nassau County.

The immigration package also lays out a list of “sensitive locations” where federal immigration authorities are not permitted to enter without a warrant signed by a judge; that includes hospitals and clinic offices, houses of worship, any school including colleges and childcare centers, parks, playgrounds and polling sites.

The budget also authorizes a new mechanism for state residents to sue ICE and other federal officers for violating their constitutional rights, and allows the state Attorney General to investigate complaints of federal overreach.

Hochul’s proposal to crack down on 3D-printed weapons and Glock “switches” was also included in the final budget bill, making it a felony to manufacture a gun or the major parts of one using a 3D printer, and requiring that printer companies implement new safety standards to block users from making such items on their platforms.

Hochul also pushed through a new ban on protests immediately outside a place of worship by defining a new misdemeanor for intentionally interfering with someone’s efforts to access or exit a place of worship. The law defines a 50-foot buffer zone around worship buildings where protests could create a “reasonable fear” that worshipers are being threatened, and authorizes police to keep protesters out of those 50-foot zones.

EDUCATION

New York’s public schools got another record-setting year of state aid, although the final details of just how much they were getting didn’t come until the day after budget votes were held across the state. Lawmakers are giving the schools $39 billion in total aid, plus the guaranteed 2% increase allotted to all districts. The formula for the main state aid package, Foundation Aid, was also updated to afford more money to districts with students learning English as a second language and for students in foster care or who are homeless.

Hochul pushed for the state to spur on universal pre-K programs across the state, mandating that all districts have full-day pre-K programs for 4-year-olds by the fall semester of 2028. In New York City, the state is encouraging a more wide-ranging program, giving funding for universal pre-K for kids as young as 2 to the city’s public schools.

Lawmakers also approved a delay to the mandate that schools buy all-electric buses; districts were meant to start buying only electric vehicles starting next year, but now have until 2032 to start the transition. Districts originally had until 2035 to fully transition their fleets, and now have until 2040. This comes after districts across New York have asked for more time, and more state support for the expensive undertaking, and in some cases have argued that electric buses will not work for their needs.

There are also a handful of New York City-specific issues addressed in the state budget; a new pilot program to crack down on habitual “super speeders” in the city was given a green-light, and some tweaks to state-mandated pension rules were allowed to give the city some breathing room in its budget.

A new tax on luxury second homes in the city, valued at more than $5 million or condos valued at more than $1 million will be subject to a new surcharge on their property tax bills. The rate ranges from 0.8% up to 1.3%. For condos and co-ops, the city can charge a much higher rate of up to 6.5%.The tax is set to expire after five years, but lawmakers could decide to extend that with future legislation.

Lawmakers also knocked out one provision that Hochul had laid out in her original budget request; her proposal to amend the state constitution to allow the sale and redevelopment of Camp Gabriels, the former prison in the Adirondack Park. Hochul’s proposed amendment would have allowed the state to sell the property, which is currently restricted as forest preserve and constitutionally barred from being sold or redeveloped. Local officials have been asking for the redevelopment for years, to repurpose what was once a significant employer in the area and to stop the uncontrolled deterioration of the existing structures on the site.

“Governor Hochul included the measure in her proposed executive budget, but after negotiations with the Legislature, it did not make the final plan,” a spokesperson for the governor said Friday afternoon.

Hochul signed the last of the bills to enact the state budget on Friday.

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