Suburban Democrats won big changes in Gov. Kathy Hochul's budget

ALBANY — In the end, three key parts of Gov. Kathy Hochul’s budget agenda — housing, the MTA payroll tax and bail — are lining up the way Democrats in Nassau, Suffolk and other suburban counties wanted.

Particularly on Long Island, State Senate and Assembly Democrats were on the defensive when Hochul — also a Democrat — unveiled her 2023-24 budget in February.

It contained what one called “extinction-level events” — a housing proposal that would allow the state to override local zoning, and a hike in the payroll tax paid by large employers in the region served by the Metropolitan Transportation Authority.

Democrats expressed concern the policies would guarantee continued election losses on Long Island and in other suburbs, following hits the party took in 2021 and 2022.

Many of them also welcomed Hochul’s intention to make changes in the state’s bail law to give judges more discretion in deciding whether to detain defendants, after seeing Republicans use the issue successfully in elections over the past two years.

As budget negotiations wind down, it appears all three issues will go the suburban members' way.

Hochul’s housing proposal has been shelved. A hike in the MTA tax is set for modification to exclude the suburbs. The bail law will be tweaked to give judges more discretion.

“I wouldn’t say suburban Democrats dominated. But our voices were heard,” said Assemb. Fred Thiele (D-Sag Harbor).

The issues didn’t settle this way solely because of suburban Democrats. A multitude of factors were at play, and some urban and upstate legislators took their side. Thiele said the Long Island delegation worked with colleagues from Westchester County and the Hudson Valley, for instance.

Further, some Democrats wanted any housing mandates to be accompanied by some form of a “good cause eviction” law, granting more rights to tenants — a trade the Hochul administration opposed, sources said.

Republicans — outnumbered 2-1 in the legislature, limiting their impact on budget outcomes — had been pounding Democrats on all three issues. They acknowledged pushback from the Democratic rank-and-file made a difference.

“It was clear some on the other side thought this would be political suicide,” Sen. Dean Murray (R-East Patchogue) said.

“I don’t think the governor appreciated the backlash this was going to generate,” Assemb. Edward Ra (R-Franklin Square) said, referring to the housing proposal.

Hochul envisioned 3% growth in the housing stock downstate every three years to boost availability and affordability. Her plan included a mechanism to override local zoning regulations to reach the goals, but it faced strong opposition.

Led by Assembly Democrats, the legislature countered by suggesting more state aid to municipalities that met housing goals. A compromise that would have offered incentives first, mandates later was floated.

With the budget a month late, Hochul has dropped the issue, but says she will continue to fight for it.

Along the way, Assembly Speaker Carl Heastie (D-Bronx) called Long Island Democrats, checking with them on various housing proposals, several lawmakers recalled. They told him none of the variations “were going to fly on Long Island,” and Heastie conveyed that in negotiations.

“The unfortunate thing is now there is no housing program at all in the budget,” Assemb. Gina Sillitti (D-Manorhaven) said. “But now we have an opportunity. Let’s work on something that will work for Long Island and not have this one-size-fits-all approach because this issue is not going away.”

Not all Long Island Democrats were happy. Assemb. Phil Ramos (D-Brentwood) backed Hochul’s housing plan, saying too often “local control” was an excuse for excluding minorities from particular communities.

Hochul’s MTA payroll tax hike would have applied to a small segment of downstate businesses: those with $1.75 million in annual payroll or more. But Democrats and Republicans remembered the “MTA tax” cost Democrats State Senate control in 2010.

“That issue was just politically toxic,” Sillitti said. “It was a minimal tax for big businesses, but the narrative was it was an attack on small businesses. It was dead on arrival, in my opinion.”

Under a tentative budget agreement Hochul announced Thursday night, the payroll tax hike would apply only to New York City businesses. Funding for the MTA will be covered in part by more state aid.

Earlier this year, as they headed into the new legislative session, some Long Island Democrats said they feared their delegation would be less influential: Democrats had gone from holding 18 of the 31 Senate and Assembly seats in Nassau and Suffolk in 2019 to just 12.

Staying united made a difference, several said.

Said Assemb. Michaelle Solages (D-Elmont): “Whether we have small numbers or big numbers, I think we’re all on the same page.”

By Yancey Roy

yancey.roy@newsday.com@yanceyroy