Gov. Kathy Hochul is set to unveil a budget proposal on Tuesday, which aims to extend the higher tax rate for New York millionaires for a five-year period. Additionally, the proposal includes provisions to allocate funding to school districts for the purpose of regulating student cell phone use. The budget, amounting to $252 billion, reflects the governor’s commitment to both fiscal responsibility and addressing pertinent issues within the education system.
Hochul’s fourth executive budget proposal includes a 3.6% increase in spending, with a total state operating funds of $143.8 billion. This reflects a significant 7.9% increase, according to budget officials.
The governor is proposing an extension of the higher income tax rate for New Yorkers earning over $1.1 million annually. This extension would be for five more years, until 2032, in order to address future budget deficits. The current higher tax rate for millionaires, which was implemented in 2021, was originally set to expire in 2027.
“We are extending the high-income surcharge,” said Budget Director Blake Washington in an interview with Spectrum News 1. He emphasized that the financial plan, which previously had a cliff in 2028, no longer poses a significant challenge. The resources from the surcharge extension will carry forward and provide additional support to the financial plan.
The governor’s upcoming budget will allocate more than $13 million to reimburse school districts for the expenses incurred in implementing regulations to restrict cell phone usage during school hours. This announcement is anticipated to be a significant highlight of Governor Hochul’s budget address, scheduled to take place at 1 p.m. in Albany.
Under Hochul’s spending plan, the state is projected to face budget gaps of $6.5 billion in 2027, $9.8 billion in 2028, and $11 billion in 2029.
The following is included:
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- $1 billion tax cut to the middle class
- One-time $3B inflation rebate check of $300 for single taxpayers earning up to $150,000 annually; $500 for joint filers making up to $300,000
- $800 million expanded child tax credit
- $120M more for free school lunches for districts not already eligible
According to Washington state officials, the state’s $3.5 billion surplus received a significant boost from higher-than-anticipated personal income tax receipts. These funds will primarily be used to support the governor’s proposed tax initiatives.
School Funding Assistance
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- Grows $1.7B, or 4.7%
- Changes data driving school Foundation Aid, or the state’s direct funding formula for districts, to use data from the latest 2020 Census, and amends the free and reduced price lunch metric to target economically disadvantaged students.
Hochul is advocating for a minimum 2% increase in aid for the 311 school districts that would not receive any additional funding under her proposed formula.
According to Budget Director Washington, the government is taking into account the Rockefeller report and aiming to ensure that everyone receives some form of aid. While acknowledging that there will be discussions with the Legislature, the focus is on minimizing disruptions and maintaining the current level of school aid for all.
Medicaid spending
The spending on Medicaid has been a subject of significant concern and debate. The program, which provides healthcare coverage to low-income individuals and families, has seen a steady increase in spending over the years. This has led to questions about the sustainability of the program and the impact it has on the federal budget.
One of the main drivers of Medicaid spending is the growing number of enrollees. As more individuals become eligible for the program, the costs associated with providing healthcare services to these individuals also rise. This has put pressure on state budgets and has led to calls for reform and cost containment measures.
Another factor contributing to the rise in Medicaid spending is the increasing cost of healthcare services. The rising prices of prescription drugs, hospital stays, and other medical treatments have contributed to the overall increase in Medicaid expenditures. This has led to concerns about the affordability of the program and the need for greater transparency and accountability in healthcare pricing.
In addition to these factors, the expansion of Medicaid under the Affordable Care Act has also had an impact on spending. While the federal government initially covered the full cost of the expansion, states are now responsible for a portion of the costs. This has led to increased spending at both the state and federal levels.
Despite these challenges, Medicaid plays a crucial role in providing healthcare coverage to vulnerable populations. It helps ensure that low-income individuals and families have access to necessary medical services. However, finding a balance between providing necessary care and controlling costs remains a significant challenge for policymakers.
In conclusion, Medicaid spending has become a topic of concern due to its steady increase over the years. Factors such as the growing number of enrollees and the rising cost of healthcare services contribute to the overall rise in expenditures. While the program plays a vital role in providing healthcare coverage, finding ways to control costs and ensure sustainability remains a priority.
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- Grows ~13.7%, with ~900,000 more New Yorkers on Medicaid rolls post-pandemic
- Keeps plan to transition Consumer Directed Personal Assistance Program, or CDPAP, for home care to one fiscal intermediary by April 1.
- N.Y. to get $3.7 billion over two years, spend it over three, from federally approved tax on Managed Care Organizations
Washington expressed cautious optimism about the potential progress of this financial mechanism, noting that a few other states have also explored this avenue.
The amount of funding that the state will receive from the temporary tax under President Donald Trump, who took office on Monday, remains uncertain.
According to Washington, the state’s proposed modifications to CDPAP are projected to result in a cost savings of $500 million once they are fully implemented.
Mental Health
Taking care of our mental health is of utmost importance. It is crucial to prioritize our well-being and ensure that we are mentally strong.
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- Fund half of $154 million in overtime costs for 750 NYPD officers deployed for new overnight subway train patrols
- Funding to create 100 beds for forensic inpatient psychiatric care on Randalls Island and Wards Island
- $16 million for counties to strengthen assisted outpatient treatment programs to direct people in mental crises to be hospitalized for care
- $10 million to build clubhouses, or safe place for people to get support for mental illness
- Additional funding for welcome centers and other peer-led services
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