New York Gov. Kathy Hochul wants to spend $2.4 billion to cover costs associated with the ongoing wave of migrants arriving in New York City, as part of her $233 billion state budget proposal.
The Democratic governor's spending plan, unveiled Tuesday at the state Capitol, would see the state take on the full cost of about 3,000 beds at temporary migrant shelters on Randall's Island and at the Creedmoor Psychiatric Facility in Queens, putting them in line with the state-funded shelter at Floyd Bennett Field in Brooklyn.
She'd do it in part by tapping in to $500 million from the state's $20 billion rainy day fund, which is reserved for unforeseen financial difficulties.
“This budget proves you can have fiscal discipline and you can do it with people-focused, progressive policies,” Hochul said in her budget address.
Hochul's budget proposal comes as higher-than-anticipated tax receipts left the state with an estimated $2.2 billion surplus for the current fiscal year, which ends March 31. Her proposal eliminates an estimated $4.3 billion deficit for the coming fiscal year in part by revising its future tax collection estimates upward.
But the state's full financial picture isn't all rosy.
The state health department's share of costs for Medicaid, the joint federal-state program that provides insurance to millions of low-income New Yorkers, is on the rise. Hochul's budget proposal includes $30.9 billion in Medicaid spending, a 10% increase over the fiscal current year.
Hochul attributed growth in the agency's Medicaid spending, in part, to the state’s aging population, which increasingly requires costly home care and nursing home services.
“We knew this was coming,” Hochul said. “It’s demographics. It has hit.”
The proposed aid for migrant costs comes in addition to the $1.9 billion the state has already allocated toward caring for thousands of newcomers over the last 18 months. Hochul's proposal calls for again covering the $1.9 billion in costs for the upcoming year, along with the additional $500 million from the state's reserves.
NYC Mayor Eric Adams has spent months pushing the state and federal governments to pick up more of the tab for the migrant crisis, which his office estimates will cost $12 billion over three fiscal years.
"We must support the city of New York in this moment to avoid these disastrous effects and protect the state's economy in the short term as well," Hochul said.
If approved by the Legislature, the new funding would go toward various housing and legal costs related to the arrival of asylum-seekers and other migrants, including the three tent-based shelters, according to budget documents.
A portion of the funding would also help cover case management services so that asylum-seekers could obtain legal authorization to work. In theory, that would allow them to transition out of the overcrowded city’s shelter system as they earn money under work permits.
The governor's budget proposal also includes another of Adams’ top priorities: an extension of mayoral control of the city's school system, which is due to expire in June.
Her proposal would extend the current law — which authorizes the mayor to oversee the nation's largest school system — for an additional four years. State lawmakers are likely to push back and urge a shorter extension, in part to pressure Adams to comply with a law limiting class sizes in the city.
In a statement, Adams was generally supportive of Hochul's budget plan, which also included a variety of housing-related proposals the mayor supports, such as the legalization of basement-level apartments in New York City.
"While we must still review the details, we appreciate the state’s continued financial support and the governor’s agreement that the federal government needs to do more" on migrants, Adams said.
Hochul's spending plan kicks off her negotiations with the Democratic-dominated Legislature, whose members will spend the next two months trying to hammer out a final agreement by the start of New York's fiscal year on April 1.
Hochul and lawmakers have until March 31 to finalize the state budget, though they’ve pushed recent budgets weeks beyond the deadline by passing temporary extensions.
One of the biggest issues to negotiate will be a potential plan to create new housing.
Last year, Hochul proposed a measure that would have forced local governments to create new housing units or be forced to give up control of certain local zoning decisions. But lawmakers and suburban officials pushed back, instead urging Hochul to offer a more incentive-based approach.
This year, Hochul is doing just that: Proposing a housing plan that would require local governments to create housing only if they want to be eligible for certain state grants and funding.
Assembly Speaker Carl Heastie, D-Bronx, told reporters that he wants to reach agreement on housing policy. But he said any deal needs to include new anti-eviction protections for tenants who are already in homes — something Hochul and real-estate developers have been wary to support to this point.
"We want a housing deal," he said. "There's got to be something in it for developers and tenants and labor alike for the Assembly to agree."
Caroline Lewis contributed reporting.
This story was updated to include additional information from the governor's budget address and clarified her Medicaid spending plan.
