New York lawmakers passed a $254 billion state budget late Thursday, but acknowledged they may have to make major alterations if President Donald Trump and Congress cut federal spending.
The budget relies on more than $90 billion in federal funds and increases state spending. Highlights include providing “inflation refund” checks of up to $400 for millions of residents and prohibiting students from using smartphones during the school day starting this fall.
While the spending plan does not account for any major cuts from Washington, Gov. Kathy Hochul and other Democratic leaders have said they could call lawmakers back to Albany to deal with a reduction in federal funds if necessary.
“ We're preparing for the possibility that we may need to return to Albany to address any fallout from these federal decisions,” state Senate Majority Leader Andrea Stewart-Cousins, a Yonkers Democrat, told reporters last week.
The budget was supposed to be approved by the April 1 start of New York’s fiscal year, but leaders in Albany missed the deadline. Hochul and legislators spent weeks struggling to reach consensus on major policies the governor insisted on including, such as changes to the state’s criminal discovery laws and a new misdemeanor charge for covering one’s face while committing certain crimes.
They eventually compromised on those issues, but the prolonged stalemate led to the state’s latest budget since 2010, when lawmakers didn’t approve a spending plan until August.
Legislators spent much of this week passing bills to enact the budget, and finished up around 9:30 p.m. Thursday.
“In this budget, New York has made a choice to stand with working people and to invest in people,” Stewart-Cousins said.
Republicans spent much of their time late Thursday attacking a last-minute addition to the spending plan: a measure ensuring the state will cover New York Attorney General Letitia James’ legal fees after the Trump administration requested a criminal investigation into mortgage fraud allegations about her. James, a Democrat, has denied wrongdoing.
The budget sets aside $10 million to cover private defense costs for state employees subject to federal investigation, so long as the investigation was “reasonably likely to have been commenced” because of the employee’s work. The measure leaves little doubt it is carefully tailored to apply to James, who won a $450 million judgment against Trump, his family and his business last year. The provision applies to state employees who “previously initiated … a criminal or civil investigation or prosecution” of a federal official.
“I can’t imagine a majority of New Yorkers not being outraged that their hard-earned dollars that go to the government are now being used — or can be used — to pay for private attorneys to defend public officials against charges of crimes that they committed, having nothing to do with their elected position,” said state Sen. Andrew Lanza, a Staten Island Republican.
New York law requires the state to cover legal fees when a government official is investigated for conduct related to their job. The Trump administration’s allegations against James are related to her private mortgages, but James’ supporters say they are politically motivated.
State Senate Deputy Majority Leader Michael Gianaris, a Queens Democrat who sponsors a bill to restrict reimbursement when an elected official uses their campaign account to pay for the official’s legal fees, said he supports the measure.
“When someone is subject to investigations because of things they did officially that are now the subject of retaliation, we believe that should be covered,” Gianaris said during the Senate debate on the state budget.
The budget rose by roughly $17 billion compared to last year’s spending plan, drawing criticism from analysts who say New York should be bracing for potential federal cuts and a possible recession.
“Instead of holding funds aside, lawmakers skyrocketed spending, slashed recession reserves and sabotaged the state’s fiscal foundation,” said Andrew Rein, president of the Citizens Budget Commission, a nonprofit think tank. “The budget simply is unaffordable.”
Gov. Hochul said lawmakers carefully considered the increase, which she argued will help pay for “transformational programs,” including “inflation refund” checks for most tax filers and a boost in the child tax credit.
“This is all money that is really well spent, and these are investments that have been long overdue and it's time to do them now,” she said Thursday.
Lawmakers will return to Albany next week for the final five weeks of their annual legislative session — a period in which they’ll pass hundreds of bills for Hochul’s consideration.
Under state law, the legislators’ paychecks were suspended while the budget remained late. Minutes after granting final approval, lawmakers lined up at the Assembly’s payroll office to receive their back pay.