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Leaders find flaws in Hochul budget plan

New York Gov. Kathy Hochul presents her executive state budget in the Red Room at the state Capitol Wednesday, Feb. 1, 2023, in Albany, N.Y. (AP Photo/Hans Pennink)

New York Gov. Kathy Hochul proposed increasing state school aid by 10%, tuition hikes for public universities and raising cigarette taxes to a nation-high $5.35 per pack as part of her budget proposal Wednesday.

The $227 billion spending plan also includes a proposal to yet again revise state bail law, which is expected to be resisted by liberal state lawmakers. The proposal kicks off weeks of intense negotiations with state legislative leaders as they try to agree on a finalized budget by the April 1 deadline.

The budget would raise the state cigarette tax from $4.35 to $5.35 per pack. Washington, D.C., currently has the highest excise tax nationwide at $4.50, according to the Federation of Tax Administrators.

The budget also would prohibit the sale of all flavored tobacco products, as opposed to just flavored vaping products. The administration said the moves will reduce the number of young smokers.

The governor is proposing a record 10% increase in school aid, to $34.5 billion.

Under Hochul’s proposal, state and city colleges could increase tuition by either 3% or an amount tied to the Higher Education Price Index, whichever is less. The state’s university centers would have the flexibility to raise tuition 6 percentage points above the system’s base tuition rate each year for the next five years for in-state students.

Here’s a compilation of responses to Hochul’s 2023 budget proposal from various officials:

¯ State Sen. George Borrello: “There is no more obvious message that New York state is on the wrong track than our unrivaled national standing as ‘number one’ for the outmigration of our residents. That fact should be a call to action for our governor as she charts the path forward for our state.

“While we will be delving into the details in the coming days, the initial takeaway from the Executive Budget proposal released today is that we are looking at more of the same policies and approach that got us where we are.

“Rather than make badly needed structural reforms in programs where growth is exploding and leading us toward dangerous levels of debt as Comptroller DiNapoli noted this week, this massive $227 billion budget simply funnels more money into areas of the budget that we know are rife with inefficiency and abuse, such as the Metropolitan Transportation Authority (MTA) and Medicaid.

“Missing is the tax relief that our residents need to keep household budgets afloat as inflation and rising energy costs compound New York’s already-high cost of living. The stronger public safety measures and bail reform rollbacks New Yorkers have cited as their number one priority are nowhere.

“Our small businesses, who are crying out for relief from the nearly $8 billion in pandemic unemployment debt that they have been unfairly saddled with, have apparently been hung out to dry once again. A corporate tax that was due to expire is being extended and all New York City and suburban employers downstate will have to pay an increased MTA payroll tax.

“What all these actions indicate is that the rhetoric about reversing the outmigration of residents and jobs and revitalizing the New York dream, is just that: rhetoric. This is another budget of missed opportunities.”

¯ Comptroller Thomas DiNapoli — “Gov. Hochul introduced her executive budget while many New Yorkers continue to struggle to make ends meet and concerns of a recession grow. Inflation is still too high, and New York still has not regained all the jobs lost during the pandemic. Federal relief aid has provided critical support to the state budget, but will be depleted by the end of the financial plan. New York needs to fund essential programs and services that support quality of life in our state, while also ensuring the long-term sustainability of the state’s finances.

“With two months left in the state’s fiscal year, tax collections remain relatively strong, exceeding the Division of Budget’s mid-year projection by $7.7 billion through December. These funds should be used wisely in this shifting economic landscape, and I am pleased the governor has continued her promise to increase rainy day reserves. Robust increases to reserves will better prepare us for future downturns and challenges.

“I remain concerned about New York’s high debt burden and how it hinders our future, which is why I proposed a roadmap for reform to impose meaningful limits on debt and ban backdoor borrowing. This proposal can serve as the basis for discussion and action to give more power back to voters and return to prudent debt limits and practices.”

¯ State Farm Bureau President David Fisher — “Gov. Hochul said today, ‘Don’t forget the farmers,’ and she didn’t in the proposed state budget. Her economic development plan, prioritized in her budget address, includes a refundable investment tax credit for agriculture that will incentivize improvements on family farms across the state. This is especially needed following years of low commodity prices, high inflation, and a pandemic, all things that have caused deep concern in the farming community.

“We greatly appreciate this important step forward from the governor, but also express concern that a higher minimum wage rate tied to inflation will be a step backwards. Farms are small businesses facing significant inflation costs, just like all New Yorkers are confronting. Making the cost of production even more expensive raises a red flag for those in the business of feeding this state.

“New York Farm Bureau thanks the governor for additional proposed funding for agriculture, including increased state procurement of local food, $10 million to eliminate food scarcity which would support farm markets and supply chain improvements, support for NY FarmNet to address mental health needs in the farming community, and $400 million for the Environmental Protection Fund which includes assistance for farmers to implement sustainable best management practices.”

¯ State Senate Republican Leader Rob Ortt — “In the midst of an unprecedented affordability crisis, the governor presented a state budget that continues to tax and spend without providing any real relief to struggling New York families and businesses. New York is facing a public safety crisis, and yet, there was no specific plan to fix the state’s disastrous bail laws.

“Instead of presenting solutions to make New York more affordable, this budget adds billions of dollars in new spending and imposes a new payroll tax that will hurt downstate New York businesses.

“As the budget process moves forward, the Senate Republican Conference will continue to focus on solutions to make New York safer, stronger, more affordable, and more free.

“New York needs a rescue plan – this isn’t it.”

Staff writer M.J. Stafford contributed to this report.

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