Albany Budget Update

( Mike Groll / Office of the Governor )
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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning and happy Friday, everyone. On today's show, Congressman Mike Lawler from the Hudson Valley, who might want to become New York's next Republican governor, on that and Trump's first 100 days. It's day 96 today. Did you see the FOX News poll showing how far Trump's approval ratings have fallen? We'll talk about that and specific policies with Mike Lawler, among other things. Also, David Graham from the Atlantic on the number one goal of Project 2025, that he says Trump hasn't even tried to implement yet, that could transform American life even more than what they've done so far. More coming up today.
We start here. We're 25 days into April, which means, among many other things, we are 25 days past the deadline for the New York State budget. Now, don't yawn. There's a lot at stake. We thought we would check in again on what's keeping the Democratic governor and the Democratically controlled Assembly and state Senate from coming to an agreement. Hint: it doesn't seem to be the money in the budget, which stands at $252 billion. Joining us to talk about some of the issues causing things to be at a standstill is Nick Reisman, POLITICO, New York State Government and politics reporter, and coauthor of the New York Playbook. We'll talk to Nick for about 10 minutes and then talk to Congressman Lawler, who may have a reaction to some of this as he looks to possibly become the governor. Hi, Nick. Welcome back to WNYC.
Nick Reisman: Hey, Brian. Thanks for having me.
Brian Lehrer: Was I right that money isn't the major stumbling block in finalizing what they call a budget?
Nick Reisman: Yes. In some respects, it's kind of surprising considering that Democrats writ large this year began 2025 trying to figure out a way to rebuke a lot of what went wrong for them in 2024 with inflation and the cost of living. Governor Hochul put out this whole budget plan and state of the state agenda that focused largely on combating inflation. Instead, now the budget has been bogged down by this debate over how to handle evidence in criminal cases and also whether to restrict mask usage and find ways of regulating masking, especially when a person is committing a crime. Once again, they're focusing on these public safety issues, and that's taking up a lot of the oxygen in the room as opposed to the issues that really kind of kicked off the year, looking at the economy and affordability.
Brian Lehrer: Let's talk about the masking issue. The governor started out wanting a law against what was called masked harassment, but pushback over how and against whom it would be enforced led to just wanting to add penalties if someone was convicted of harassment or menacing, as you were just describing. But that hasn't been enough, or where does that stand?
Nick Reisman: Well, this was something that, as listeners probably know, was dropped into the budget negotiations really at the 11th hour, a couple of days before the budget deadline was coming up, right before April 1st. The governor injected this into the negotiations, trying to find a way to crack down on mask-wearing by people who commit crimes. This was in large part something of a nonstarter with a number of state lawmakers. You had members of the very influential Black, Hispanic, Puerto Rican, and Asian legislative caucus come out opposing it.
The governor has tried various iterations of this mask measure. Now she is instead of creating a new crime once penalty enhancers post conviction, that kind of fell flat. Then just this week, the governor came back to the legislature and proposed this idea of essentially tying some sort of mask crime related to hate crimes. The details of that are pretty hazy at this point, but that certainly seemed like a last-ditch effort to get this over the finish line in the state budget. So far, the lawmakers just have not budged on it.
Brian Lehrer: Yes, that's a far cry from what we heard at the beginning of this year where it seemed like the governor even wanted to ban mask wearing on the subways, which I know every time I go on the subways I still see a small number of people, but almost every single time some people in the car wearing masks.
Nick Reisman: That's right. You had a number of left-leaning legislators who are typically a little leery of doing anything when it comes to anti-crime measures. They have framed their opposition to Hochul's anti-masking efforts as a public health concern, saying that there are still concerns that a number of people have about COVID, about Long COVID, and this is just not rooted in public health.
Now, the governor has insisted, to be fair, Governor Hochul has insisted that there will be exceptions for people who mask for health reasons. But of course, how would a police officer, for instance, be able to determine someone is masking for health reasons versus masking as they're committing a crime? It has gotten into this haze and fog of the overall budget negotiations, and there has been very little wiggle room for the governor when it comes to trying to get something through in this budget talk here.
Brian Lehrer: Another non-budget item holding up the budget, the governor's desire for a statewide ban on cell phones in schools. Where does that stand?
Nick Reisman: That one has largely been resolved as far as we can tell. Now, it's always dangerous in these budget negotiations to say an issue has been resolved and has been finalized, but the overall spending plan is not yet agreed to, since a lot of this stuff is all connected in that it's all going in basically the same document. But legislators and the governor have largely reached this framework agreement to limit how often children can access cell phones in schools.
There was some pushback internally within the legislature over whether students who may have to care for a family member, be it a parent or a guardian, or even a child of their own, would perhaps need access to a mobile device during the school day. So that, as far as I can tell, has not yet been fully resolved, but the broad strokes of banning cell phones in schools during school hours has been largely reached.
There are also some concerns about penalties, whether a student accesses a phone during the day, if they are suspended or merely given detention. That's been a concern. Local control for the school districts over how to set these punishments has also been at issue. Again, the broad strokes have largely been agreed to. Governor Hochul is most likely going to get a victory here, and quite frankly, it's probably the most substantive victory she's been able to get in a budget since she became governor back in 2021.
Brian Lehrer: How about involuntary commitment for people perceived to be in certain circumstances that would require mental health hospitalizations against their will? Is that part of this so-called budget?
Nick Reisman: That is heading toward some sort of an agreement here. Now, this might involve more psychiatric beds. This might involve trying to free up space in some facilities that would care for people. At the end of the day, the Democrats very early on did signal that they were open to doing something on this issue. They were concerned about the political blowback, quite frankly, of random street crime that has popped up over the last couple of months and perhaps exacerbated a bit in the media. But the Democratic leadership in the legislature did signal a willingness to work with the governor on this issue. I think that is one of the remaining complicated issues that they still have to work out on the details of this. There is a broad agreement that they wanted to do something on this involuntary confinement issue.
Brian Lehrer: On some actual budgetary matters in the budget, Governor Hochul did not want to raise taxes on the wealthiest New Yorkers. According to her, they wouldn't have the incentive to move out of state and not pay taxes to New York at all. Yet I see there's apparently one possible tax or tax hike that's at least being discussed, a mobility tax to help fund the MTA.
Nick Reisman: Yes, this is a great development, quite frankly, for Republicans who have been able to really use this issue effectively in the past to address the affordability concerns and the tax concerns that New Yorkers have registered in polling. What's going to happen is lawmakers and the governor have largely agreed for the MTA capital plan. The way to fund it is to increase this payroll mobility tax, and it is largely going to fall on some of the biggest employers in the MTA service region. Not just New York City, but the entire metropolitan area that the MTA mass transit service does cover.
It remains to be seen how big of a tax increase this is going to be, ultimately. I think there is some concern about the Trump tariff plan and whether some employers, as a result of the economic gyrations, are going to scale back some of their hiring in the next couple of years because of all of this. That could mean less money being drawn from this payroll mobility tax as a result, so they still have to calibrate this in a certain way.
The upshot here is that taxes are going to go up for these big companies, and it is going to be used for this MTA capital plan, leverage it for bonds, same way that they're leveraging the revenue from congestion pricing in order to bolster the region's mass transit. Now, like I said, in the past, back in 2010, there was a big payroll tax increase that the Democratic legislature had previously muscled through, and Republicans used it quite effectively in the midterm elections that year. That's why Republicans were able to flip control of the state Senate. We've seen the GOP use this issue in the past, and I would not be shocked if they used it again.
Brian Lehrer: Does the budget account in any way for the changes the Trump administration is putting into place with tariffs and spending cuts? We seem to hear every day about ways the federal government wants to withdraw money from the states, from local governments, from universities, in ways that may fall back on the states. It may be applied to Medicaid later in the year, but it would still be part of this New York State fiscal year, potentially. All these things that may either be to punish states and others for diversity initiatives, or that may just be government efficiency measures, as the Trump administration sees them. There are a lot of question marks, I would imagine, about how much federal funding will flow to New York State compared to what they've been able to expect predictably in the past. Are they accounting for that at all in this budget?
Nick Reisman: They are not. That is going to be a big problem come September or October. A lot of people in Albany do expect the legislature to be coming back for a special session, probably late summer, early fall, to account for any sort of federal budget actions. That could mean New York will have to pare back its own spending. Two things can be true here, where you do have the Trump administration potentially going after blue states in particular. Also, New York has had a tremendous, tremendous increase in spending over the last several years. The governor proposed a $252 billion budget earlier this year. That's a quarter of a trillion dollars.
Usually, what happens with any governor's budget is the legislature tries to add on spending. Take that 252 and add a few more billion dollars onto it. The Medicaid portion of the budget, in particular, has been skyrocketing over the last couple of years, partially as a result of the Medicaid expansion during the Obama administration and then another increase in Medicaid spending during COVID. There had been, initially, a couple of years ago, a discussion about finding ways to once again smooth out those costs, but that idea was abandoned because it took place just as the pandemic was starting to hit.
There is a concern that Medicaid costs really are spiking over these last couple of years, and it is not a sustainable spending increase. There is going to have to be some politically tough conversations that are going to have to be held about Medicaid spending, in particular in New York. This is not a Republican thing. This is not a Democratic thing. A lot of people are just saying it is not a sustainable rate of spending.
Brian Lehrer: Nick Reisman, POLITICO, New York State Government and Politics reporter, and coauthor of their New York Playbook newsletter. Thanks, Nick.
Nick Reisman: Thanks, Brian.
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