The FY 2024 state budget proposal unveiled today by Governor Hochul would stay on the course she set last year — raising spending to unsustainable levels, pointing towards deep holes for the future.

Adjusting for surplus-funded debt service prepayments (which distort the bottom line), Hochul would raise the state operating funds budget from $121 billion in FY 2023 to more than $128 billion in the year that begins April 1, an increase of 6.1 percent. The $7.5 billion in total added disbursements would include a combined increase of about $6 billion in the budget’s two largest categories, school aid (up 9.8 percent) and Medicaid (up 9.3 percent, not counting the federal share).

Across the next four fiscal years, through FY 2027, total state operating funds spending net of debt service adjustments would increase by more than $26 billion (24 percent) even while revenues increase by a net of just $3.8 billion, including a dip next year, and reflecting a downward reduction of $21 billion from tax levels previously projected for FYs 2025 through 2027.

Obviously, these numbers don’t add up to a balanced budget. Yet balanced it will be — for next year, at least — thanks to the unprecedented surpluses generated by a combination of federal pandemic relief aid and strong tax receipts across the last three years. The surpluses amassed at the start of the pandemic period are expected to push the state’s total budget reserves to $19.5 billion by the end of the current fiscal year. However, projected budget gaps from FYs 2025 through 2027 total even more: $22 billion. Thus, barring an increase in projected underlying revenues, closing the projected budget gaps will require Hochul and the Legislature to cut spending, raise taxes, or totally deplete reserves — or some combination of all three.


  • The budget would increase state taxes by at least $1.6 billion, including $810 million a year from an extension of the 2021 hike in the corporate franchise tax rate and another $800 million from an increase in the payroll mobility tax on employers in the 12-county Metropolitan Commuter Transportation District.
  • Even while increasing the state’s general tax on incorporated businesses, Hochul’s budget would extend New York’s largest corporate tax subsidy, the Film Tax Credit, for five more years, to 2030. The amount allocated to the subsidy would increase from $420 million to $700 million.


The Capital Projects budget reflects a big downward adjustment in the previously projected amount of outstanding state-related debt at the end of FY 2023, from $68 billion to $58 billion. However, as shown below, the rate of increase over the next five years would be steeper, ultimately $89 billion in FY 2028.

The projected debt path adds credence to state Comptroller Thomas DiNapoli’s call on Tuesday for a constitutional amendment to cap debt in the future.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

Despite Lingering Shortages, New York’s Health-Care Workforce Is Bigger Than Ever

The state's health-care workforce is recovering unevenly from the pandemic, with persistently lower employment levels in some areas and robust growth in others. This mixed pattern c Read More

High Taxes Aren’t a Problem, Supporters of High Taxes Say

A declaring "no statistically significant evidence of tax migration in New York" and finding "high earners’ migration rates returned to pre-Covid levels" during 2022 has a glaring problem: It relies heavily on an almost microscopic sample size of self- Read More

The Wacky Math of New York’s Essential Plan

Thanks to an absurdly wasteful federal law, New York's Essential Plan is expected to continue running billion-dollar surpluses even as state officials more than double its spending over the next several years. Read More

NY 2nd in the Nation for Homeschooling Growth

A Washington Post analysis of homeschooling trends revealed that families in New York have flocked to home education at rates Read More

Don’t Tell The Grownups: NY Still Hiding State Test Scores

State education officials are refusing to release the results of federally required assessments in grades 3 through 8, deliberately keeping parents and taxpayers in the dark—not only about how New York’s public schools performed, but also about how that performance was measured. Read More

In a Tight Budget Year, New York’s Hospital Lobby Shoots for the Moon

As Governor Hochul calls for spending restraint next year, influential hospital lobbyists are pushing what could be the costliest budget request ever floated in Albany. In a , the G Read More

What You Should Know: NY’s changing graduation requirements

Months after lowering the scores to pass state assessment exams, New York education officials are considering eliminating the Regents diploma. Read More

Putting the Mission in Hochul’s Health Commission

Last week Governor Hochul answered one big question about her Commission on the Future of Health Care – the names of its members – but left a fundamental mystery unresolved:  W Read More

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!