Governor Hochul gives her first State of the State (photo: Darren McGee/Governor's Office)
A year ago, after Governor Hochul had made her first State of the State address, I wrote a column, For State’s Future, The Governor Must Say No, urging her to reject well-intentioned but unwise proposals by legislators and activists. Reading it again now, after Hochul’s inauguration to her first full term as Governor, I am struck by how much of it is still relevant.
The state’s fiscal situation is more precarious than it was a year ago as federal covid relief tapers off, the economy’s recovery is slower than in other parts of the country, and recession looms as a real threat. Even under relatively optimistic assumptions, the current state financial plan shows a fiscal cliff of $6 billion in 2027 and a risk of as much as a $13 billion deficit in 2028. So, my previous admonition to Governor Hochul is even more important now: say no to ill-advised policies and spending and take actions to put the state on a sound financial path even if they may be unpopular in the short-term.
In brief, here are some of the most salient things Governor Hochul should say in her State of the State to send a message to the Legislature that she will be strong and resist pressure to raise taxes and spend excessively:
-Because user fees from those who can afford them are an important source of revenue, MTA fares must be permitted to increase by the small, incremental amount approved by the MTA board. We need riders to continue to cover a reasonable portion of the costs of running a 24-hour transit system.
-By the same token, tuition at CUNY and SUNY should continue; there is simply no responsible way to pay for free college for those who are not eligible for the considerable need-based grants and subsidies already available.
-The reforms to the New York City property tax system recommended by the report of the NYC Advisory Commission on Property Tax Reform should be enacted into state law. They address only some, not all of the inequities in the current system, but will go a long way to rationalize the taxation of individually-owned residential property in the city.
-Absent more comprehensive property tax reform that addresses the excessive burden placed on rental and commercial properties, a replacement for the “421a” program to incentivize the construction of rental housing must be enacted. We need much more rental housing to meet demand, encourage growth, and accommodate a variety of income levels in a diverse array of neighborhoods.
-The rates of spending growth in the two largest programs in the state budget are unsustainable. There must be reforms to control the costs of Medicaid and school aid in a way that more appropriately targets benefits to those who are in need. Specifically:
-The Foundation Aid formula for school aid must be revised to redirect aid to the neediest districts and stop providing regular increases to school districts that are already fully resourced.
-The Medicaid Redesign Task Force reforms that were set aside during the pandemic must be implemented and additional reforms developed to help constrain the dramatic growth in by far the largest expenditure in the state budget.
-Congestion pricing will get out of the planning phase and into operation ASAP with minimal exceptions!
Nothing on this list will generate resounding applause from the members of the State Senate and Assembly in the State of the State audience. But now is the time for the Governor of the Empire State to show that she will be tough and relentless in assuring that New York remains a thriving place for people to live and work where government resources are used wisely and effectively.
Carol Kellermann is a long-time New York civic leader who has worked in and out of government and led nonprofits including Citizens Budget Commission, The September 11th Fund, and Learning Leaders.