“We will not be raising income taxes this year,” Gov. Hochul declared in January at the opening of New York’s 2023 legislative session.

Since she’s sitting on a record $19 billion in surplus reserves, that should be an easy promise for the governor to keep — ”this year,” at least. But to avoid future tax hikes, Hochul will need to keep a lid on spending in her coming budget negotiations with the Legislature.

The governor’s $227 billion proposed budget was inflated to start with, reflecting a multi-year influx of temporary federal aid and a record-high surge in capital gains tax payments during the Wall Street bull market of 2020-21. The stock market’s choppy downturn since 2022 and continuing prospects of a recession within the next 12 months prompted Hochul to significantly reduce her revenue estimates heading into this year.

Last week, Hochul’s budget office and legislative fiscal committee staffs agreed to a “consensus” revenue forecast boost of $800 million. But the governor is still projecting fiscal 2025-27 budget shortfalls totaling nearly $21 billion, more than enough to torch every dollar of cash reserves by the end of her current term.