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New York’s state budget is nearly a month late, and Albany’s Republicans have a rare chance to be relevant. Will they take it?
Gov. Hochul has been locked in budgetary combat with legislative Democrats.
Their main battle isn’t over spending, but rather policy changes without big fiscal impacts: Senate and Assembly Dems bristled at Hochul’s proposals to make it easier to lock up and treat people with severe mental illness, and harder for defense lawyers to have criminal cases tossed on technicalities.
Meanwhile Republicans, who hold just over a third of the seats in the Senate and just under a third in the Assembly, are nowhere to be seen.
The governor’s policy demands are sound, and it’s to her credit that she’s made them necessary for any budget deal.
But the resulting deadlock means there’s been virtually no debate about the quarter-trillion-dollar spending plan Hochul and lawmakers are about to adopt.
Hochul’s fiscal 2026 budget proposal totaled $252 billion (including federal aid and borrowing), a substantial increase from the $239 billion authorized last year.
Democrats in the Assembly bid in at just over $256 billion; their Senate colleagues want to spend $259 billion, making the numbers work by, among other things, hiking taxes on businesses and higher-income households.
Here’s where Albany’s moribund GOP has an opening.
The faster-than-inflation spending hikes sought by the Democrats are based on revenue forecasts developed, with GOP involvement, two months ago.
Their consensus was that GDP would rise 2.2% in 2025 and 2% in 2026, with wages and corporate profits rising even faster.
But those projections went up in smoke when President Donald Trump’s tariff moves roiled markets and economic outlooks.
The Federal Reserve Bank of Atlanta in late February estimated the US economy would grow at an annualized rate of just over 2% between January 1 and March 31; the same model now indicates the economy experienced a roughly 2.5% contraction.
As my colleague E.J. McMahon warned on these pages this month, “the worst has yet to come.”
New York is extremely reliant on the income taxes paid by a small group of high earners: In 2023, the state collected half of its personal-income-tax receipts from just 200,000 taxpayers — fewer than 2% of all filers.
The capital gains and bonuses Albany was counting on taxing in coming months will likely be considerably smaller, too.
That means the state will almost certainly have less to spend than the Democrats’ budgets anticipate — and neither Hochul nor the legislative Dems are acknowledging this.
Perhaps they plan to blame the inevitable mismatch between receipts and expenses on Trump, and on changes to federal tax and spending policies that the GOP-controlled Congress is expected to make later this year.
Albany Republicans shouldn’t let them get away with it. They should expose the truth and issue their own revenue forecast — now, before the budget vote occurs.
Both Assembly and Senate Republicans have capable fiscal staff who monitor economic indicators and the daily receipts reported by state tax officials.
They must sound the alarm about the state’s fiscal danger before Hochul and their spendthrift colleagues hike spending to even less sustainable levels.
There’s one downside: Telling the world that New York needs to curb spending risks upsetting some of the special interests that allowed it to balloon in the first place.
The GOP’s strategy in recent years has focused on survival. That has meant trading its criticism of the cost of government for political endorsements from public-employee unions.
When Hochul tried to update New York’s decades-old school-aid formula, Albany Republicans locked arms with the teachers’ unions to oppose her.
They blame fare-beating (no doubt a valid issue) for the MTA’s fiscal challenges, but are silent on lopsided union contracts that bring six-figure overtime payouts and bloated construction costs.
Irrelevance allows inconsistency. Albany Republicans push for more spending while bemoaning the tax burden.
Where has that gotten them? Would New York be measurably different, in any way, if GOP lawmakers had spent the last 24 months in Greenland instead of in government?
Albany Republicans, almost to a man, remain unwilling to talk about the policy choices that made New York’s public-school system, or its Medicaid program, or its transit system, the nation’s most expensive — and without better results for long-suffering taxpayers.
But these conversations will become necessary if and when state revenues don’t match the budget’s expectations.
Republicans must claw back some of their credibility by sounding the alarm on Albany’s budgetary make-believe.
They may not want to take that opportunity, but they have a duty to New Yorkers to do as much.
Ken Girardin is a fellow at the Manhattan Institute.