The rising cost of K-12 education and Medicaid will create ballooning future budget deficits if more isn’t done to rein in state spending on these and other programs, Gov. Kathy Hochul said Tuesday.
Hochul proposed a 2024-25 state budget that raises spending within state operating funds by $5.9 billion, or 4.5%, from the current $130 billion. The overall budget would rise by $1 billion to $233 billion – the highest such figure in New York history.
Spending on education would rise by 2.7% and spending on Medicaid would rise by 10.9% under the governor’s proposed budget.
Hochul also would provide $2.4 billion toward the expense of assisting the tens of thousands of asylum-seekers who settled in New York.
In addition, the budget provides billions of dollars toward priorities and programs Hochul announced in her Jan. 9 State of the State address.
The governor said she and her administration worked carefully to balance the budget while addressing the state’s critical needs and priorities.
Hochul would not raise income taxes under the budget and would maintain the state’s “rainy day” reserves, which would exceed $19 billion.
“We can’t spend like there’s no tomorrow because tomorrow always comes,” Hochul said in Albany.
The State Legislature has until April 1 to approve the budget, though negotiations frequently continue past this date.
Hochul said the state’s financial position grew stronger over the last two years, thanks in part to Covid-19 relief aid and high investment returns. The state used this money to bolster mental health programs, house asylum seekers and fund school districts and public universities, Hochul said.
However, tax collections dropped sharply in the current fiscal year, down 7.8% from the previous year, amid softening economic activity. They are expected to rebound, but only by 2.5% in 2024-25.
In response, Hochul’s administration in September had ordered a spending freeze for state agencies.
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