“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.

Continue reading the full commentary on New York Daily News. And don’t forget to subscribe to the Messages of Necessity podcast to listen to in-depth analysis of policy and politics in New York State.

About the Author

E.J. McMahon

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

Read more by E.J. McMahon

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