Gov. Hochul's 3rd State of State address to focus on affordability

ALBANY — Gov. Kathy Hochul will present her third State of the State address on Tuesday, which she hopes will set the year’s legislative agenda around making life more affordable, from more housing to lowering the costs of living.

The annual speech, traditionally marked by soaring rhetoric and optimism, comes as her partnership with fellow Democrats leading the State Legislature is already frayed.

Hochul said in news conferences last week that her address will focus on affordability and helping to build more homes. She said Friday her address also will focus on increasing mental health services, crime and public safety — topics that have at times put her at odds with the legislature. She’s released a dozen smaller initiatives, including revamping elementary school reading lessons through a return to phonics.

On Monday, Hochul said her agenda includes creating a consortium of universities — including SUNY and CUNY, — researchers, entrepreneurs and philanthropists to make New York the leader in artificial intelligence nationwide. The goal is to promote “responsible research and development” and create jobs, according to her statement.

She said the effort will cost $400 million in public and private investment, including $275 million from the state and more than $125 million from the “founding institutions.” In addition to SUNY and CUNY, those institutions would include Columbia, Cornell and New York universities, Rensselaer Polytechnic Institute and the Simons Foundation’s Flatiron Institute.

But she is expected to reveal her boldest proposals on Tuesday.

“We're going to begin the fight to make sure we can put money back in the pockets of New Yorkers and making our state, once and for all, a more affordable place to live,” Hochul said last week.

There is no shortage of choices for her 2024 priorities.

The state is going to have to find a way to pay billions of dollars a year to meet its ambitious goals set in law to combat climate change and must contend with housing affordability, particularly on Long Island, Westchester and in New York City. It also must address growing tension over migrants sent to New York City and the high costs of health care for hospitals and patients.

Through it all, Hochul also will have to contend with a projected $36 billion deficit through the 2026-27 budget, fulfill her pledge to avoid raising broad-based taxes, such as income taxes, attract employers and stem a continued exodus of New Yorkers to less-expensive states.

“New York leads the nation in population loss and state action is needed to change this course,” said Patrick Orecki of the independent Citizens Budget Commission. “New York needs to be more affordable, deliver to meet its residents' needs, and be fiscally stable.”

The commission credits Hochul’s stance against raising taxes as part of a more fiscally responsible track taken by the more centrist Democrat. She had faced an election scare in 2022 by conservative Republican Lee Zeldin over crime and affordability.

“Long Island’s sky-high cost of living is our region’s existential crisis,” said Matt Cohen, president and CEO of the Long Island Association business group. “While we commend the governor for focusing on affordability, we also urge her State of the State to include additional measures to enhance business growth and expand the commercial tax base to increase our economic competitiveness.”

In December, state Comptroller Thomas DiNapoli warned that the exodus of New Yorkers includes some of the state’s wealthiest residents. Those who make more than $1 million a year account for more than 44% of the state’s income tax revenue. 

Republicans are making their case for lower taxes to end the loss of the wealthy as well as middle class New Yorkers.

“In 2024, we must prioritize the issues that are driving droves of New Yorkers to other states,” said Will Barclay of Pulaski, the Assembly Republican leader. “It must start with addressing the cost-of-living crisis impacting households across this state.”

Barclay said Republicans will confront Democrats with the issues that led to several GOP gains in recent election cycles, which was most evident on Long Island. The first is crime, which has dropped, but Republicans argue hasn’t returned to pre-pandemic levels because of Democratic laws, such as eliminating bail for most nonviolent felonies. Another is the cost of living, including high utility costs. A third priority is to end the flood of migrants from the U.S.-Mexican border.

But despite calls to rein in spending, 2024 brings some big bills.

Among them is how to make the state more resilient to climate change. The state plans to transform homes and businesses into using far greater renewable energy such as wind power and to protect the state from increasingly common severe storms, flooding and other extreme weather.

“That is the staggering cost to the state which no one is talking about,” said Blair Horner of the New York Public Interest Research Group.

A proposed Superfund for climate change that would assess energy companies for their emissions has languished amid heavy lobbying by business interests. The bill is a goal of increasingly influential progressive lawmakers, who also want to further tax the richest New Yorkers.

“I think most New Yorkers want the governor to tax the wealthiest millionaires, billionaires and corporations to prevent budget cuts and fund big public investments in affordable housing, child care, higher education, health care and clean energy,” said Michael Kink, executive director of the Strong Economy for All Coalition, a progressive advocacy group.

Hochul’s plans will face an emboldened legislature led by Democratic supermajorities in the Senate and Assembly to her political left.

Last year, the Senate and Assembly, in a rare rebuke of a governor’s priority, rejected Hochul’s “housing compact,” which was a major element of her 2023 State of the State speech. That aggressive plan called for addressing New York’s housing affordability crisis by helping to create 800,000 new units at all income levels over the coming decade.

But local officials, led by Long Islanders, strongly opposed the provision that a state panel could override local zoning boards that stood in the way of developing new, safe housing. 

Hochul has said she’ll push the legislature to back another housing plan again this year, but hasn’t tipped her hand. Her relationship with lawmakers was further eroded over the last two months as she vetoed major legislation overwhelmingly approved in the 2023 legislative session.

Among them was Hochul’s veto of the proposed Wrongful Convictions Act. The liberal criminal justice goal would have made it easier for people to overturn their convictions even if they had pleaded guilty in a deal with prosecutors. Another bill vetoed by Hochul would have required lobbyists to register when they push for or against people nominated for public positions, such as the Court of Appeals or the Public Service Commission.

Hochul blamed the legislature for jamming her with hundreds of flawed bills that needed to be reworked or would create adverse consequences for companies and New Yorkers. She said she had to veto some bills she supported in principle because legislative leaders wouldn’t accept her changes.

Horner, of NYPRIG, said the friction is part of the historic tension between the legislative and executive branches.

“But you are only throwing gasoline on the fire if one branch is basically attacking the other’s motives,” Horner said. “You must make it work.”

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.