Hochul scores wins in NYS budget battle, but impacts remain to be seen

ALBANY — Housing deal? Check. Illegal cannabis shops? Check. Retail theft? Check. No income tax hike? Check.

Gov. Kathy Hochul, unlike last year, scored big wins in this year’s budget fight at the State Capitol.

Some advocates and analysts say New Yorkers should temper expectations, that the new initiatives might not have huge practical impacts on housing, cannabis or even Hochul’s vow to modernize the state’s school-aid formula.

But for now, the Democratic governor is doing a victory lap around the state, and some say she gets credit for making progress on hot-button issues that had been stagnant in Albany.

“Governmentally, you can’t be sure how all of these will play out, particularly the big housing deal or the school-aid form,” said Lawrence Levy, dean of suburban studies at Hofstra University. “But even if it’s not clear yet how well she did from a policy perspective, she did well politically. She can claim real victories that eluded other governors and can say she started down the road to making real change.”

Most notably, Hochul forged a deal with the State Legislature on her highest profile budget priority — a new plan for expanding housing in New York.

The governor got what she wanted: a revitalized tax-incentive plan, called 485-x, that is supposed to jump-start development. Authorized for 10 years, 485-x would grant developers tax breaks if they set aside 20% of their units in smaller buildings and 25% in larger ones at below-market rates for people earning no more than the area median income.

Jobs must pay at least $40 per hour

In a boon for unions, wages and benefits for construction projects in the plan must be at least $40 per hour. 

But the governor had to give, too, compared with last year. She dropped a proposal that could have allowed for state overrides of local zoning if new housing unit goals weren’t met in a short time frame — an idea that was dead on arrival for many suburban Democrats.

She also agreed to more tenant protections, after opposing them last year. The compromise didn’t include the so-called Good Cause Eviction legislation that many progressives in her party favored, which would make it harder to evict tenants.

This year, the Hochul administration was more open to legislators’ insistence that tenant protection be included, sources said, such as making it harder to force out tenants solely because a lease has expired.

“I think there was definitely more collaboration and there was more compromise,” Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) told Newsday.

Last year, Hochul’s housing proposals were “done in a vacuum,” the Senate leader said, and there wasn’t time to forge a deal all could embrace. This time, Hochul dropped the more controversial elements. Also, a potential compromise that had been developed by rank-and-file legislators a year ago served as a guide to what lawmakers might accept.

“I think the element of surprise about what people wanted was not there and the understanding that we needed to compromise” was clear, Stewart-Cousins said.

“Finally, we have a housing deal!” Hochul declared at a news conference last Monday with New York City Mayor Eric Adams and an array of union leaders. “Today, we celebrate an agreement that will transform our state. … We’re going to build, build, build!”

Not everyone is thrilled.

The Real Estate Board of New York said the deal “falls far short” of impacting New York’s housing needs and should be addressed again next year.

On the other side, Cea Weaver, director of Housing Justice for All, called it a “sham of a housing deal” that primarily “will ensure that the real estate industry keeps getting richer off the backs of hardworking tenants.”

Lisa Parshall, a political scientist at Daemen University in Buffalo, agreed that the housing deal seems “watered down” and “hodgepodge-y.” For example, she noted local governments would have to “opt in” to apply stronger tenant protections, which likely means many won’t.

“You could look at it as anything that moves the needle is a victory,” Parshall said. “Will it accomplish much? I’m not sure it will. … It’s not as comprehensive a vision as what was in [the 2023] proposal. But it’s probably as good as she was going to get.”

Stewart-Cousins said “it’s true” that it will take time to measure the impact of the plan, then quickly added: “But can you imagine if we didn’t do anything?”

Governments can shutter illegal pot shops

Similar applause and doubts greeted the new legislation that will give local governments the power to shutter illegal cannabis shops — which have sprouted in the thousands because of the state’s slow rollout of licensed shops.

“I think any legislation or increase in enforcement is a step in the right direction,” Paul Lapore, president of Happy Days dispensary in Farmingdale, told Newsday.

“But we really have to see how well it’s executed,” Lapore said. According to him, he doesn’t “see a lot happening” because local authorities have been cautious about enforcement and they’re dealing with many priorities.

Likewise, some voice doubts about whether threatening to suspend licenses of highway, bridge and tunnel toll evaders will stem a growing problem. The Metropolitan Transportation Authority recently estimated it’s losing nearly $50 million per year on toll evasion because of tinted or defaced license plates, or other dodges.

Similarly, some question that creating “retail theft teams” within State Police and local law enforcement and giving businesses tax credits to hire more security will put a dent in a hot-button crime issue.

Senate Minority Leader Rob Ortt, a Niagara County Republican, called the latter “throwing money at a problem,” but another Republican, Assemb. Ed Flood (R-Port Jefferson), said: “The inclusion of robust measures to crack down on retail theft is a significant victory for our state.”

Hochul dropped what was easily her most politically unpopular idea in the budget: ending a practice in which no school gets less aid than the year before even if it loses enrollment. It would have impacted nearly half of New York’s more than 700 school districts, and lawmakers from both sides opposed it. In exchange for backing down, Hochul got lawmakers to agree to a study that eventually could redo the school-aid formula.

Hochul also fended off a proposed income tax hike favored by some progressive legislators.

Despite the doubts, Levy said Hochul, in the political lens, continued to stake out a “centrist Democrat” position against a more liberal Legislature and can claim she forged compromises on issues that “had defied solutions.” Those are things that could benefit her down the line.

Said Levy: “It was a good session for her.”

By Yancey Roy

yancey.roy@newsday.com@yanceyroy