Hochul’s Plan for New York Depends on Courting Wary Lawmakers

(Bloomberg) -- In her first formal policy address since taking office almost five months ago, Governor Kathy Hochul promised a “whole new era” for New York’s government. To bring it about, she’ll have to woo lawmakers bruised by years of conflict.

Hochul pledged to pursue “shared success” after more than a decade of internecine Democratic warfare between her predecessor, Andrew Cuomo, and the legislature. In a 40-minute speech Wednesday and a 237-page briefing book, she offered a buffet of ideas to jump-start the economy, reform government and bolster a health-care system battered by two years of fighting a pandemic. 

Hochul has certain advantages in pressing her plan, which will be embodied in a budget proposal this month: 

She has a Democrat-controlled legislature and the initial goodwill of lawmakers looking for a fresh start after Cuomo resigned in August amid sexual harassment allegations.

She has money. Though the cost of her proposals is unknown, New York is unusually flush. Lawmakers raised income taxes last year, and better-than-expected revenue, combined with billions in federal aid, have cushioned the bottom line. The state had spent only $10 billion of more than $26 billion in federal aid it received as of November, according to the comptroller’s office. 

She has running room. Hochul’s speech drew plaudits from groups often at odds, and she avoided offending powerful constituencies with the kind of provocative -- and ambitious -- proposals that became a hallmark of Cuomo’s tenure. Many lawmakers found it soothing.

“I’m happy with lots of it, and none of it is that surprising,” said Democratic State Senator Liz Krueger.

Treading Lightly

Hochul’s speech had some of the grandiosity and vagueness of a campaign address. Indeed, to enact her ideas, many of which are multiyear proposals, she must first win the Democratic primary, a contest less than six months away. She dodged issues that would irritate the far left of the Democratic party, or provoke specific interest groups.

Though she’s said the bail-reform laws enacted in 2019 should be re-examined -- an idea sure to spark a massive fight in the legislature that crafted the measures in the first place -- Hochul mentioned no proposed changes. 

She avoided acceding to some progressive activists’ demands that would alarm New York’s real estate and business community, like calls to make it more difficult to evict tenants. But she proposed dozens of other ideas that drew praise from housing, health care, governance and planning advocates. 

A proposal for a light rail connecting Brooklyn and Queens was embraced by groups like the Regional Plan Association, which first sought such a line more than two decades ago. Another, to overhaul the state’s ineffective and dysfunctional ethics reform commission by populating it with law-school deans instead of political appointees, earned acclaim from good government groups. And an expansive plan to fund more affordable and supportive housing drew similar applause from advocates. 

Hochul proposed eliminating a property-tax abatement known as 421-a that has mainly benefited developers and replacing it with a program that would better foster affordable housing. The Real Estate Board of New York issued a statement supporting the idea. Rafael Cestero, chief executive officer of the Community Preservation Corporation, credited Hochul for addressing the issue head on. 

Hochul’s plan for 421-a “was a surprise to me because it’s a areal important statement that, while we may not like the program, then we should be forthcoming enough to say, ‘Let’s do something that does make sense,’” Cestero said. 

Progressive Assemblyman Dick Gottfried, a Democratic legislator who plans to retire this year, tweeted that the speech was the best of all the 52 State of the State addresses he’d heard. 

Warning Lights

The love wasn’t universal. 

State Republican Chairman Nick Langworthy, in a lengthy statement, said little about Hochul’s proposals, but tried to tie her to the former governor. “She might not scream and threaten like Cuomo, but she is no less of an operator,” Langworthy said.

And for some left-leaning Democratic politicians, Hochul’s big ideas were threadbare. A proposal to increase the income eligibility threshold for child care subsidies, which Hochul said could help an additional 100,000 families, drew scorn from Brooklyn State Senator Jabari Brisport, who has proposed his own universal child care plan. In an email, Brisport called Hochul’s proposal “dramatically inadequate.” 

Hochul’s proposal to let a statewide eviction moratorium lapse on Jan. 15 would please the landlords, but Senate Democratic majority leader Andrea Stewart-Cousins said her members are “concerned” about the moratorium’s expiration.  

The biggest question mark is what each item in Hochul’s plan will cost and how, exactly, she will pay for it. 

“Am I opposed to any of the items she said she wants to spend money on? No,” said Krueger, who chairs the Senate’s Finance Committee. “Am I clear how we’re finding the money for all of that yet? No.”

Blank Spaces

Hochul didn’t delineate funding sources for her $10 billion in proposed health-care spending, or the price tag for her proposed Brooklyn-Queens rail line, for example. 

The governor has said often in recent months that she’s opposed to raising taxes. Indeed, she’s proposing cuts in taxes to benefit lower and middle-class taxpayers, with $2.2 billion in relief. 

“The programs presented, many of which appear beneficial, must be affordable or they risk the state’s future capacity to serve New Yorkers, including those most in need,” Andrew Rein, president of the Citizens Budget Commission, warned in a statement.

Some of Hochul’s ideas were crowd-pleasers, like a proposal to permanently reinstate a pandemic-era regulation that allowed restaurants and bars to serve take-out and delivery alcoholic beverages. 

The idea, tucked into a single line, was the only part of Hochul’s speech that elicited an audible reaction from the few lawmakers allowed into the Assembly chamber after the resurgence in Covid-19 forced her to dramatically scale back attendance. 

A pool report described a “low chuckle.” For Hochul to succeed, she’ll have to keep lawmakers smiling.

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