Gov. Kathy Hochul unveiled her $252 billion budget proposal stuffed with handouts on Tuesday -- but she's already blaming the Trump's administration if there are issues propping up the spending plan.
Hochul's has touted the giveaways as part of an "affordability" agenda but that, combined with spiraling spending on Medicaid and school aid have experts worried the Empire State will be on shaky ground in the long run.
Hochul's proposal includes:
Hochul's budget office said the handouts are being paid for by around $5 billion in surpluses from higher-than-expected tax revenues -- but critics warned the governor's plan gorges on the extra cash for short-term initiatives to boost her 2026 reelection campaign.
Still, Hochul played the pre-emptive blame game during her budget address, saying the federal government shouldered the fiscal responsibility to deliver on the budget's promises.
"Those who are hurt need to raise their voices and direct that anger at Washington and push their members of Congress to fight for them because New York and other states will simply not be able to shoulder these costs on our own," Hochul said during her address.
"I'm just simply framing where the debate should be," Hochul later told reporters.
Many New York programs hinge on federal support and the budget would be balanced very delicately, with huge funding contingent on the second Trump administration's policies.
Number crunchers said the budget didn't do enough to keep the state's fiscal house in order.
"Despite strong revenues and continued economic growth, Governor Kathy Hochul's Executive Budget weakens the State's fiscal foundation and competitiveness: it balloons spending, fails to restrain unaffordable Medicaid and education spending growth, spreads many 'affordability' programs too thin to provide meaningful relief, and extends the 'temporary' income tax surcharge," Citizens Budget Commission President Andrew Rein wrote in a statement Tuesday.
"The budget continues New York's habit of using revenue surges and temporary taxes to build its fiscal house of cards higher."
State Comptroller Tom DiNapoli echoed the concerns.
"The state needs to be prepared to assess any actions taken by the new administration in Washington and how they could affect New York's finances," DiNapoli said. "As we enter into a time of potential economic uncertainty, a focus on the long-term sustainability of the state's finances and maintaining a commitment to increasing statutory reserves is necessary."
Despite the warnings, Hochul's plan anticipated $1.4 billion from an "MCO tax" on health insurance providers approved by the Biden administration that the governor's team admitted could be axed under the Trump administration.
"These investments and funding are dependent on successful execution of the MCO tax transaction, which is dependent on continued Federal support," the budget division's briefing book reads.
New York will also feel an impact depending on what DC lawmakers decide to do with the $10,000 cap on state and local tax deductions. Some Republicans and Democrats from highly-taxed states like New York want to get rid of the cap, which was implemented as part of the first Trump administration's 2017 Tax Cuts and Jobs Act.
While New York's Republican members of Congress say they're expecting an increase, they're not optimistic about repealing it entirely.
Hochul is demanding nothing less.
"Full repeal or no deal. Let me repeat. Full repeal or no deal," Hochul said.
The budget would also create anticipated deficits in future budgets to the tune of $23.4 billion through the 2029 fiscal year.
Hochul's budget office also acknowledged that it's looking out for slowing wage and job growth in the Empire State.
"Job growth is leveling off? ... Yeah, I'm not seeing that." Hochul questioned when asked by The Post about the concerns noted by her budget wonks.
"It's been on fire," State Operations Director Kathryn Garcia added.
Her budget director, Blake Washington, chimed in to walk back their comments.
"Post-pandemic we're building back, but we saw the higher base. So naturally as, as you get to a higher base, the amount that you grow year to year just slowed down a bit," Washington said, explaining that the projection is still somewhat of a rebound from the rapid growth seen following the pandemic.
Wage growth is expected to slow from 5.4% in the 2025 fiscal year to 3.7% in the 2026 fiscal year, Hochul's budget office estimates. Still personal income remains high, buoyed particularly by bonuses in the financial and insurance sectors.
According to data from the federal reserve, states like Florida and Texas both saw year on year wage growth around 7.2% respectively from 2022 to 2023. New York's grew 4.7% over the same period.
The massive spending proposal for New York -- which had an estimated population of just under 20 million last year -- represents more than double the $116 billion budget of Florida, which had an estimated 22 million residents in 2024. Texas, with an estimated population of over 30 million, approved a $322 billion budget last year.