Hochul's planned check giveaway won't solve recurring fiscal woes

Gov. Kathy Hochul won’t deliver her annual State of the State address until Jan. 14, but she has already touted her first proposal for 2025. Hochul calls it a "first-ever inflation refund," which, for budgetary purposes, becomes a new $3 billion expenditure aimed at 8.6 million taxpayers statewide.

Single taxpayers who make $150,000 or less would receive checks for $300, and joint filers with incomes of $300,000 get $500 under the plan. On the surface it has an attractive rationale: Sales tax revenues have surged due to inflation; so the logic goes, why not return some of that to the public? "My agenda for the coming year will be laser-focused on putting money back in your pockets," Hochul announced on Dec. 5.

Inflation and high costs loomed large in last month's elections. Hochul cited the cost of living in June when she abruptly announced a "pause" in plans to charge vehicle tolls to enter Manhattan. After the election, however, she and the transit system reset the "congestion pricing" toll plan — reducing the basic peak-hour toll for cars from $15 to $9. It takes effect next month.

For a governor pushing to lift low approval numbers ahead of a 2026 reelection year, the "refund" checks to go out next fall might be a popularity tonic. For the state’s wider fiscal and economic picture, however, one senses more of a frivolous gimmick. Consider the fact that this year, the administration and State Legislature have further burdened taxpayers around the state. Newly budgeted expenditures have added more in recurring costs in the long term than what one-shot "refunds" would offer individuals in the short term. Specifically, there’s the matter of pensions for civil servants and teachers in the public retirement systems.

The state’s Tier 6 pension plan took effect for employees hired after April 2012 as a cost-cutting move for state and local governments. But earlier this year, lawmakers and Hochul enacted changes in how to calculate the plan’s contribution rates. The bottom line is that it’s expected to result in thousands of dollars more in payments to Tier 6 employees. Those changes, according to the private watchdog Citizens Budget Commission, could cost state and local governments — and hence taxpayers — nearly $400 million per year.

On Long Island, pension costs were cited by town officials as a big factor in nine of them this season popping the state’s cap on property tax increases.

Hochul this month walked around an Albany supermarket and symbolically filled up a cart to show solidarity with the mass of New Yorkers jolted by high prices. In that context, what politician wouldn’t want to hand out checks signed by themselves?

Cash giveaways and photo-ops are easy compared to the challenge of wrestling down taxpayer costs of such huge-ticket items as pensions, Medicaid and education aid. For Hochul, at the midpoint of her elected term, the trickier tasks continue to be the real tests.