Hochul announces deal on $254B state budget including tax breaks, school cellphone ban

ALBANY — Gov. Kathy Hochul on Monday announced a "general agreement" on a deal with legislative leaders on a $254 billion state budget packed with policy measures that was due April 1.

Hochul said the budget would grow over her January budget proposal of $252 billion, which was an increase of 7.9% in state operating spending over the 2024-25 budget. The past budget totaled about $244 billion. She offered few details on spending increases in announcing the general agreement.

Hochul said the budget deal will include her "affordability agenda," which includes tax rebate checks of up to $500 for most families and a ban on student cellphones during school to reduce distractions. She said the budget would also boost school aid, which helps school districts avoid bigger increases in property taxes.

Included in her plan will be a "bell-to-bell" ban on student cellphones in schools, which she said Monday would protect students from "addictive technology."

She said the budget will fund the capital plan for the Metropolitan Transportation Authority to repair and renovate services, including the Long Island Rail Road. She said a "small" tax increase will be added to the biggest, most profitable corporations in the MTA service area, but she didn’t detail that cost.

Hochul said the state will provide $3 billion and another $3 billion would come from New York City and the MTA would have to find $3 billion in savings and efficiencies. She said the tax increase will be shared by the MTA region, including Long Island companies with more than $10 million in payroll. She said smaller companies will see a reduction in the payroll tax they pay.

The budget comes as President Donald Trump has threatened to cut billions of dollars in federal aid to the state and as economists warn of a potential recession this year, fueled by Trump’s tariffs on goods from China and other countries. The State Legislature may have to return to Albany in the fall to amend the state budget if those cuts and the recession hit, leaders have said.

"Despite the chaos and uncertainty from Washington ... we developed a budget that will lift all New Yorkers," Hochul said. "Your family is my fight. I vowed to address the affordability crisis."

The State Legislature is expected to vote on the massive budget bills this week. When complete, this will be one of the latest state budget deals in Albany’s long history of late budgets.

Hochul's original "affordability agenda" includes tax rebate checks of up to $500 to families making less than $300,000 a year and $300 to single filers making less than $150,000 a year. But under the general agreement, that would be reduced to $400 for joint filers and $200 for single filers.

She also proposed $3 billion in additional tax breaks for families making less than $323,000 a year. The state will pay for it partly by extending a temporary income tax surcharge on New Yorkers making more than $2.1 million a year to raise $5 billion in revenue.

She has said her plan, including an increased child tax credit, would add up to $5,000 for most middle-class families.

On Tuesday, Hochul will send another emergency measure to the Legislature for a vote to keep state government operating based on spending in the 2024-25 budget. This will be the ninth spending "extender" during the protracted negotiations.

Earlier Monday, Assembly Speaker Carl Heastie said Hochul and legislative leaders have tentatively agreed to make wearing a mask in public a misdemeanor, but only when police first charge a mask-wearing suspect with a greater crime.

Hochul had originally proposed a total mask ban in public as way to aid police in identifying suspects. But Democratic legislators feared it would compromise the safety of protesters who cover their faces out of fear of retribution. The issue arose amid heated demonstrations surrounding the Israel-Hamas War. The tentative restriction does not apply to facial coverings worn for medical or religious reasons.

Hochul had proposed a mask ban in January. It was a broader proposal that was similar to a state ban on masks that existed before the COVID-19 pandemic, when masks were worn as a public health measure.

A Senate source briefed on the mask ban said Monday the charge would be a Class B misdemeanor, which is punishable by up to 3 months in jail. But the charge could only be levied if the suspect faces other charges, such as a Class A misdemeanor punishable by up to a year in jail, or felonies, including assaults, the source said.

"We came to agreement to really try to concentrate on people who wear masks in regards to trying to hide their identity while they commit another crime," Heastie told reporters. "It’s a second charge ... if it’s in the midst of creating another crime. "

With Keshia Clukey and Yancey Roy

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.