Video, Audio, Photos & Rush Transcript: Governor Hochul Announces Agreement on FY 2025 State Budget

Earlier today, Governor Kathy Hochul announced a conceptual agreement with legislative leaders on key priorities in the Fiscal Year 2025 New York State Budget.

VIDEO of the event is available on YouTube here and in TV quality (h.264, mp4) format here.

AUDIO of the Governor's remarks is available here.

PHOTOS of the event are available on the Governor's Flickr page.

A rush transcript of the Governor's remarks is available below:

I do want to thank everyone for joining us here this evening. I'm pleased to announce that we have the parameters of a conceptual agreement on the Fiscal Year 2025 State Budget.

So this is quite an accomplishment. And first of all, I want to acknowledge the extraordinary public servants who made this happen; members of my team who have worked long and hard many, many weekends, long nights, early mornings, and they made this become a reality.

And I want to thank particularly, our Secretary to the Governor Karen Persichilli Keogh. Extraordinary work, and I will be forever grateful for what she has delivered for New Yorkers. And Counsel to the Governor Liz Fine, who made sure everything was just proper as it should be, and I want to thank her for all she has done. And Director of State Operations Kathryn Garcia. Luckily, there was not a blizzard or a major storm during the budget process, or it might have been delayed. But she's always on the ground. And Chief of Staff Stacy Lynch, who's our secret agents to negotiate some of the hard deals as well and I want to thank her. And, of course, our first time to have as our Budget Director, Blake Washington. You did good. We'll keep you. Well done, well done.

And to everyone in the budget teams, all the agency staff, all the people who spent – I walked in one night here it was so late at night and there were about 40 or 50 people from our team and the Leader’s team and the Speaker’s team, and no one complains. They're just, as long as you give them food, they're very happy.

To all my partners in government, we worked together to make a Budget that will make a difference in people's lives. Andrea Stewart-Cousins, our Majority Leader, and Carl Heastie, our Speaker. Their staffs worked around the clock as well. And I want to make sure they get a message of appreciation from all of us. I thank them often, but it never feels enough for the sacrifice they made, our teams made, and they deserve a lot of recognition as well.

Each of us came to the table with really strongly held beliefs. But in the interest of our state, we pulled it together to deliver in a really collaborative way. And I will say, you don't always see that here. You don't always see that in our Capitol. So in my State of the State Address in January, I made a promise to New Yorkers that I would fight the right fights and deliver common sense solutions. And we would tackle the thorny issues that other governors have ignored. In so doing, we would move New York forward.

Now I always asked the tough questions about housing and public safety and even how we teach our kids to read. And always said, can we do better? Why is it this way? And I heard way too often, for my taste, that's how it's always been done. That never worked for me – never has, never will.

So we had some very tough conversations about how to change the entrenched status quo. And as a result, we have a Budget that reflects New Yorkers needs, both right now and into the future.

And in my State of the State, I said we would crack down on persistent crime like retail theft and the proliferation of unlicensed cannabis stores and toll evaders – we got it done. I said we'd take concrete action to address the housing crisis and make it easier for New Yorkers to find homes they can afford – we got it done. And I said we'd continue to bolster our mental health system, invest in children and families, build the economy of the future – and we got it done. And even though there were many loud voices pushing us to raise taxes, we accomplished all of this without raising any taxes on New Yorkers.

Now this Budget is a blueprint for a safer, more affordable, more livable New York. So let's dig into it. The overall Budget is approximately [$237] billion. It supports our bold vision for the future without spending beyond our means.

We're going to continue to maintain our reserves at 15 percent, which is what economists agree is the gold standard of budgeting. Not only does it help our credit rating, but it also reduces borrowing costs. And it means we're better prepared to weather any storms that may lie ahead.

Now some of you may recall back in January, I said we were staring down at sizable deficits; that we needed to exercise restraint to protect our financial security. Well, the good news is that since then, our revenue projections have exceeded expectations, putting us in a stronger position. And it allows us to continue investing in programs that New Yorkers depend upon. So while we're maintaining healthy reserves, we set our state on a sustainable course for the future. And with that done, I want to move on to some of my top priorities, starting with housing.

New York is in the throes of a housing crisis, and the consequences are so painfully evident. Families literally packing up and leaving. Frontline workers and teachers and firefighters struggling to even find something they can afford in the communities they're serving. Seniors on fixed income unable to downsize and find other options, and sometimes they just have to leave our state. The crisis is most dire in New York City, where we are seeing the lowest vacancy rates since the 1960s, 1.4 percent. Healthy cities at about 10 percent.

For too long, elected officials in New York have lacked the courage to take action. I know this is tough to do, but meanwhile, neighboring states with very comparable – they had ambition that dwarfed ours. And that's hard to say. But we are able to attract New Yorkers looking for more affordable places to live all because they built housing. We could have settled down for a watered-down plan and a hollow victory – this time last year. But I refused to accept anything that didn't meaningfully address the housing supply. And that's why when the legislative session came to a close, I found the executive powers I needed to move the ball down the field.

For example, unlocking thousands of new apartments in Gowanus that were stalled by the expiration of 421-a and launching our Pro-Housing Communities program. Well, many of you know, as 2024 rolled around, a lot of people thought a housing deal was a non-starter. Many predicted that our administration would not even try. I found that interesting to read, because in the process, while that was going on, we were actually working on a housing plan. So despite intense headwinds, I vowed to never give up.

We kept building support and momentum, winning the hearts and minds, and growing the coalition necessary to get a bold package done. And I'm really proud that the Fiscal Year 2025 Budget achieves what so many said was impossible: a transformative deal to reverse the downward spiral on housing stock, all while protecting our tenants.

And this deal demanded unprecedented, all-consuming attention, collaboration, respect. And the leaders and I rolled up our sleeves. We worked on this for weeks and weeks and weeks, intensely, balancing diametrically opposed interests. But the three of us were committed to getting it done.

Now, first New York city is getting the local control it has been asking for to unlock new housing growth, creating 485-x, a successor program to 421-a that will jumpstart housing production for the city while creating permanently affordable units, all the while ensuring that good wages will be there for our hardworking men and women who build them. Also, extending 421-a for six years, unlocking previously approved projects that were stalled ever since this tax credit was in place since the 1970s, was allowed to expire. Converting underused office buildings into housing, including affordable units and eliminating antiquated state laws that have long prevented New York City from building more housing, bringing warehoused rent stabilized units back into the marketplace and launching a new pilot program to create a path towards legalizing basement and cellar apartments. That's New York City.

The rest of the state needs help as well. That includes a new statewide tax incentive for multifamily housing construction – incentivizing local communities that want to add accessory dwelling units like backyard cottages, in law suites and attic conversions. Safeguarding homeowners against deed theft and making $650 million instead of as available only to pro housing certified communities. They have to be the ones who commit to build the building targets. And we're investing a half a billion dollars to develop over 15,000 new housing units on state owned sites, like former correctional facilities, areas near commuter rail and underutilized SUNY properties, for protecting affordable housing from being denied insurance or targeted for unreasonable premium hikes and vindicating the rights of Section 8 tenants all across the state who are looking to access housing with their vouchers and creating new affordable rental and homeownership opportunities with a program called New York Housing for the Future.

Finally, I want to talk about tenant protections. I've always supported protections and efforts to keep renters safely housed from signing legislation to create the NYCHA preservation trust which unlocked billions of dollars for renovations and improvements in public housing across New York City to the more than 1 billion we secured last year to supplement federal emergency rental assistance programming. Now, from the beginning, I've maintained that we could find a balanced approach that would protect tenants from price gouging without undercutting our ability to build the housing we need.

Today, I'm proud to say that we've reached an agreement that will make this happen and extend protections to tenants in New York that have never been available before. So taken together, these new measures represent the most comprehensive new housing policy our state has seen in three generations. This is a landmark deal, and I'm really proud of it. It's a culmination of two years of robust community engagement, and I will say intense, spirited debate. But they all reflect our understanding that housing is not a privilege, it's a right. But I'll say this, to truly enjoy their homes and their communities, New Yorkers must also feel safe and be safe in their homes – that is my number one priority.

When I became Governor, there were still people recklessly calling to defund the police, even when we had a huge surge in gun crimes – instead of defunding, we supported and properly funded law enforcement. As a result, shootings and murders are down 30 percent statewide and while we were able to make remarkable progress, there was still more to do. And that's why, once again, our Budget sets aside over $347 million, record funding for gun violence prevention programs, so we can continue these proven efforts. We all know there are certain categories of crime that remain stubbornly high. So, we're taking the same core strategies we employed to drive down the gun violence, because we know they work, starting with retail theft.

A few weeks ago, I stood right here with small businesses and bodegas and their workers. Every single day, they have to contend with brazen thieves who burst in, threatened people and ripped their products off the shelves with impunity. I made a promise to them right in this room. I said we'd fight for them. Never forgetting that they were the essential workers during the pandemic who ensured that New Yorkers had what they needed – food and medicine, people in drugstores, keeping New Yorkers safe and healthy, even to the detriment of themselves. So to reduce the scourge of attacks on these vulnerable frontline workers, I insisted on increased penalties for anyone who assaults a retail worker. We got it done. We've also agreed to common sense legislation to make it illegal to foster the sale of stolen goods online and allowing prosecutors to combine the value of goods stolen across different stores when they file larceny charges.

We got it all done while securing $40 million to establish dedicated retail theft teams within the State Police – in DA's offices and local police departments, more than 100 troopers. We will assign to build our State Police smash and grab unit. Never had one of those before. Hope we don't need one for very long. And they're supposed to break up the increasingly sophisticated retail theft rings. We've also heard about a lot about the illegal cannabis stores. They have plagued our neighborhoods flagrantly violating our laws, selling to kids, evading taxes, and even offering products laced with unregulated chemicals. They needed to be shut down. We were up against thousands of illicit shops, as well as bureaucratic inertia, and didn't have the laws on our side.

So, we changed the law so we could finally fight back. Going forward, both the state and localities will have the power to padlock the doors of these illegal vendors for up to a year. That means while the due process plays out, the padlock stays on. Now, let me be clear before we feel the results. This is going to take some time. They won't disappear overnight, but eventually New Yorkers will see the change they've been waiting for in their communities. This will clear the way for the Black, Latino, women, immigrant, veteran and justice involved business owners who run the legal shops – the people our cannabis laws were intended to empower.

And this is just the start of how we're keeping people safe – including $36 million to give law enforcement and district attorneys more tools to prosecute domestic abusers. $35 million in grants to strengthen security at higher risk community organizations and houses of worship against hate crimes. And we added more than 20 additional offenses that can now be prosecuted as hate crimes from gang assaults to gun charges to rape and sex trafficking. And we're putting the brakes on those who drive ghost cars with faked or doctored license plates, all to evade our tolls. We'll also invest millions to reduce the number of repeat offenders and prepare them for reentry after their sentence.

Another issue that is always top of mind in the city is the migrant crisis. New York State and New York City continue to carry the burden of sheltering right now over 65,000 migrants. 184,000 have come to New York over the last two years. I've said a lot – it's up to the federal government to address this crisis. But Republicans in Congress, including 10 from New York, refused to act. They rejected a bipartisan bill – bipartisan – to send over 2,000 more agents to the southern border. Why did they do that? Because the former president told them to. It would have stemmed the tide of migrants and provided significant financial relief for New York and border patrol for the northern border as well.

So, while they, these Republicans grandstand and gaslight the public – we're on the ground dealing with the realities of their inability to act. So, that's why the problem continues. We're providing $2.4 billion to assist a $500 million increase and help the city manage this unprecedented humanitarian crisis. It’s the right thing to do for the migrants, and it's the right thing to do for the city to protect the quality of life for its residents.

I think many of you know that when I encounter long existing challenges, like housing and crime, ignored by leaders before me – I first put a spotlight on them. Can't always solve it at first or even the first year, but I put a spotlight on it – and then I take action.

Education is yet another example, beginning with the most fundamental skill of all, reading. With this Budget, we're throwing out debunked curriculums and getting back to basics. Using phonics and reading comprehension and other effective techniques. We're also setting aside funding for teachers to be retrained to make this transition. That's how we start to set our kids up for success. And that's why I'm also proud that we increased K-12 funding, school aid by the largest amount ever – $5 billion increase over two years, and fully funded foundation aid for the very first time.

And this year, once again, we're supporting our students and our teachers with record funding: investing $35.9 billion in our schools – a $1.3 billion increase over last year, the highest amount in our state history. So, now between the historic investment from the state, and the infusion that was there from the federal government in pandemic aid – you've determined that many schools have more resources than ever before.

At the same time, there's been a 10 percent decline in enrollment over the last decade. So, we have many schools serving fewer students while receiving the same amount of money from the state. And as we speak, some school districts have considerable cash reserves that exceed the amount they're allowed to have by law.

So, while schools and working-class communities are limited to no reserves, others are doing just fine. So, now's the right time, to take this on, and to begin to fix the way we fund schools – to make sure they're equitable, fair and are doing the right thing. So, I'm really glad that in conversations with our leaders, we've agreed to take a significant step this year to improve the school aid formula, and to adjust the unsustainable built in rate of growth with our Foundation Aid formula.

Other elements of foundation aid need a closer assessment. So, the Legislature and I have agreed on a plan that makes long overdue adjustments to the funding formula in next year's Budget. This includes the hold harmless provision, which ensures up until now that school districts never receive less funding than the year before, regardless of population loss, their need, or the size of their surpluses.

To accomplish this, the Rockefeller Institute of Government, in collaboration with the State Education Department, will conduct a comprehensive study on school funding with a focus on Foundation Aid. They'll track down where the money is going to waste and how we can get every student the resources they need to learn, to thrive, to succeed.

Because, in the long term, it just doesn't make sense to keep paying for empty seats in classrooms. And we can't continue to have large sums of money sit in school district reserves when that money could be used in helping students in low-income neighborhoods and communities of color or return to the taxpayers. And we can't continue to fund our schools based on politics. Our decisions must be guided by where the need is greatest. That was K-12, let's talk about higher education.

Access to higher education. It continues to be one of our highest priorities, especially when the parents want to do, sending their kids to college, collides with the reality of ever-escalating costs. And that's why we're making changes to the Tuition Assistance Program, increasing the minimum award from $500 to $1,000, and raising the dependent student income limit from $80,000 to $125,000. So, with this Budget, we're making college more affordable for middle- and lower-income New Yorkers.

Let's take a few minutes to talk about how we're protecting New Yorkers’ health, starting with their mental health. Last year, we proudly announced a landmark $1 billion plan to add 1,000 new psychiatric inpatient beds and to greatly expand outpatient services, build thousands more supportive housing units, launch new programs, especially targeted toward our children. Our investments are already making a difference. And this Budget will allow us to build on our progress in a number of ways.

First, we're going to help individuals with serious mental illness get the care they need. Beginning this year, we're requiring hospitals to screen patients for mental health conditions – risks like suicide, violence, substance abuse – before they're discharged. And we're requiring that follow up care be coordinated before the patients leave the hospital. And we're serious about these new rules. That's why we're investing $7 million on monitoring and compliance to ensure that the hospitals abide by these new regulations. We're also investing $31 million to support people in the criminal justice system who are struggling with mental illness, so these individuals can have lasting well-being instead of cycling in and out of the justice system.

Secondly, we're addressing the youth mental health crisis. I believe if you invest dollars now, you give them the help they need now, they won't need a lifetime of help later. It's a smart investment. So, we're investing $19 million in mental health support for school aged children.

And finally, we're making sure everyone has access to a baseline level of mental health care. How? By setting standards for reimbursement rates for outpatient services and issuing new regulations that will mandate insurers to provide out of network service. That's for individuals when timely appointments are not available in network.

Now, in addition to mental health, we're laser focused on improving overall health outcomes for New Yorkers. First, we're taking action to reverse the disturbing trend with the rise in maternal and infant mortality. Every year, hundreds of New York families experience this unfathomable loss. And the reality is, Black and Brown mothers and babies are disproportionately impacted, in part because they're not getting the prenatal care they need. It takes a lot to leave a job or schedule an appointment. You're making minimum wage and you're supposed to take a half a day off for a prenatal appointment, a lot of families, a lot of moms can't do that.

With this Budget, we're making New York the first state in the nation to offer paid prenatal leave, so expectant mothers can have the checkups they need to ensure a healthy pregnancy. We're also going to be addressing the proliferation of sometimes unnecessary procedures like C-sections and employers requiring time for nursing mothers to pump. So, we're going to keep working on ways to keep moms and infants alive and safe.

But also make sure we're tackling the risks they face as they get older. I've talked about this before. Drownings in our state have reached record levels in the last few years. Kids are particularly vulnerable. Drowning is the leading cause of deaths for one- to four-year-olds across the country, and the second leading cause of deaths for five-year-olds to 14-year-olds. And there's stark racial disparities. Black children are three times more likely to drown. We'll make sure that New Yorkers, young New Yorkers, know how to swim, build new pools across the state with a construction program that's unrivaled since FDR's work progress administration.

As we're talking about health care, I also want to address Medicaid and how we fund it. Last year, we invested over $400 million to invest access to preventative and primary care. We made the largest Medicaid rate increases for hospitals and nursing homes in two decades. This year, we're providing $3 billion to support distressed hospitals and continuing our $20 billion multi-year investment to build new health care infrastructure, expand coverage for seniors and pregnant New Yorkers, and increase the home care worker minimum wage.

It's well known that Medicaid is one of the single largest expenses in our State Budget. So, we also have a responsibility to rein in these costs, because even though this year our revenues are higher than anticipated, we can't expect that to be the case every year. We must scrutinize Medicaid spending, so we can continue to provide the essential services to people who need them the most.

We made significant headway with this Budget – increasing oversight of the Consumer Directed Personal Assistance Program, a program that the costs have gone up over 1,200 percent just in the last couple of years. So, we'll be instituting a single statewide fiscal intermediary. What that means is we'll be like states like California that have one fiscal intermediary managing this program – not the 700 that have proliferated in the State of New York. This alone will save us $500 million every single year, and allow us to start putting controls and guardrails in place for what has historically been a very under regulated program. That's how we ensure that the people who really need it get the best quality care while eliminating the waste, fraud and abuse.

This alone is an enormous victory, and will ultimately yield greater savings over time. But let me be clear, we're not done yet. A few months back, my administration established the Commission on the Future of Health Care. They've been tasked with uncovering long-term solutions to the challenges confronting our health care system. They will have concrete recommendations in time for the next State Budget. These experts will help us build a sustainable health care system for many years to come.

As we're closing out here, I want to just talk about a few other ways we're providing a better life for New Yorkers with this Budget. We know life is hard. Cost of living just keeps going up and up. That's why we're raising the maximum benefit for paid maternal medical disability leave, which has been frozen for 35 years. Too often, disabled New Yorkers aren't given the support they need – they're forced to struggle alone. That legacy of neglect ends with this Budget.

We're also supporting 1.6 million New Yorkers who are diagnosed with diabetes, who struggle to afford the medications that their lives depend on. We'll be banning co-pays for insulin for anyone in New York on a state regulated insurance plan. No one has to become a diabetic, and actually no one has to be extorted by greedy pharmaceutical and insurance companies looking to make a quick buck off their pain and desperation.

We're also protecting New Yorkers from the burden of medical debt, that too often plummets them into bankruptcy, by advancing legislation to protect low-income New Yorkers from being sued for medical debt, capping monthly payments and interest and expanding hospital financial assistance programs.

We're also promoting the health of our environment and fighting climate change; planting 25 million trees, investing $500 million in clean water infrastructure, accelerating our transition to clean energy and making progress toward our bold emissions targets.

This Budget placed a particular emphasis on union workers, the very people who do the hard work of building our state. We'll be putting them to work on significant transportation projects and making sure that we continue to institute strong labor standards.

Also, over the next few years, we're sending $50 million in temporary municipal assistance to cities and towns outside of New York City. That's money that's often used to pay for essential workers like police officers and firefighters.

We're also helping rebuild our depleted public sector workforce at both the state and local levels with changes to the Tier 6 pension program. I spent 14 years in local government. There was a time when there was a lot of demand to become a state or local government worker. Sadly, those days are over. So, I know what these investments will do to encourage people to stay, and we can recruit more people to be part of the extraordinary work that our public sector workers do every day.

We're also securing the long-term health of our economy in many ways. I'll talk about one in particular: here in New York, we stand on the cutting edge. We always do what's never been done before and we do it better than anyone else. That's why we're setting our sights on making New York the home for the burgeoning artificial intelligence industry.

AI is the single most impactful technological commercial advancement since the invention of the internet with a global market projected to reach 1.3 trillion in just a few short years.

So, I've said all along, whoever dominates the AI industry will dominate the next chapter of human history and we want New York to win the race for the future. That's exactly what our Empire AI initiative will accomplish.

We're going to make New York the first state in the nation to purchase artificial intelligence supercomputing power at this scale and place it in the hands of our leading academic institutions and our universities to foster an ecosystem of innovation, research and growth. This will position New York at the forefront of this industry for decades to come. Our Budget allocates $275 million to make this become a reality and will be supported by $125 million in private and university funding.

This initiative will drive countless new discoveries and make New York State a national center for AI research. This will support our brilliant young students as they launch new companies and products when they graduate and literally transform the way that New Yorkers live their lives all for the better. And we're ensuring that change will be powered right here in New York.

Other economic development projects: we're going to have over $200 million invested to build four workforce development centers in Syracuse, along the I-90 corridor, where all the new jobs are coming, semiconductors – need I say Micron? – and so many other areas. We're leading the nation in creating these great paying jobs.

So, we want to make sure that we can secure the good paying jobs in advanced manufacturing. People need to be trained and that's why this investment is so important. Everywhere you look, from our biggest cities to our most rural hamlets, you'll find New Yorkers working the jobs of the future.

Let me end with this. In my State of the State address, I said something I believe with all my heart: New Yorkers are more powerful together than we ever would be on our own. And we saw that with this budget process. Yes, with spirited debate, but there was almost unprecedented collaboration between myself, the Majority Leader, the Speaker, and we proved that we can come together for the good of our state, and we did.

So young families can finally buy that first home in a community they want to. Mom and pop retail shops will find peace of mind and focus on what they do best. All expecting mothers can access the prenatal care they need and deserve and prepare to bring new life into the world. So seniors are never left to choose between life-saving insulin and paying their rent. So every child can attend quality public schools where they're taught to read and put on a pathway to success.

Enacting our vision will make New York safer, more affordable, more livable, not just today, but tomorrow, and ensure that people across our state can still have optimism and hope that better days lie ahead.

We'll continue working day in and day out, together, to build our New York, our future.

Thank you.