Gov. Kathy Hochul and the Democratic-led state legislature are gearing up for major negotiations just one month away from their budget deadline.

Friday marks a deadline for their fiscal experts to agree on how much money the state has to spend on key sectors like healthcare and education.

What You Need To Know

  • The governor proposed a $233 billion dollar spending plan, but over the next several weeks she’ll go head-to-head with the state legislature, deciding how they want to spend New York’s tax dollars

  • Friday marks a deadline for their fiscal experts to agree on how much money the state has to spend on key sectors like healthcare and education

  • The state has benefited from higher than expected tax receipts and fending off the threat of a recession 

The annual update was provided earlier this week in Albany, as part of an economic and revenue consensus forecasting meeting on Wednesday, Feb. 28. It will guide lawmakers in the weeks before it’s pens down, hopefully by the state budget’s April 1 deadline.

“That agreement is essential to meeting a timely and on time budget at the end of March,” said Blake Washington, director of the State Division of the Budget.

New York’s constitution says, Gov. Hochul and the legislature’s separate budget teams must agree to a final number by March 1. Once that consensus is met, it starts the next phase of budget negotiations.

“It’s everybody getting on the same page before, kind of the meat of budget negotiations,” said Patrick Orecki, director of state studies at the fiscal watchdog group, the Citizens Budget Commission. “It’s really kind of the point at which the legislature and the governor agreed to how many billions of dollars are available to close out this year and into next year.”

There’s good news.

“The state and the nation appear to be heading towards, hopefully a year of modest growth,” said Washginton during the Albany-based meeting.

Recession threats have died down and New York City’s job growth has recovered to pre-pandemic levels. Sources told NY1 on Friday that fiscal hawks agree tax receipts came in stronger, which means the state is projecting it has about a billion dollars more than previously estimated.

“What’ll it mean for specific regions of New York State? What is the economy and research showing us for different kinds of workers?” asked State Sen. Liz Krueger who chairs the chamber’s powerful Finance Committee.

“It’s a bit bittersweet because more money is a good thing and helps close the gaps. The kind of concern that is still on the horizon? We do have big out year gaps. So $5 to $10 billion over [20]26 to 2028. So there’s big challenges still on the horizon to deal with,” Orecki said.

The outcome of the 2024 elections could change New York’s relationship with Washington leaders and the flow of federal dollars. Lawmakers, meanwhile, are acutely aware of the sky high cost of living and lack of affordable housing.

“New Yorkers continue to leave the state in record numbers and the overwhelming outmigration numbers tell you all you need to know about what is wrong with New York State,” said State Assemblyman Ed Ra during the Wednesday meeting.

The governor proposed a $233 billion dollar spending plan, but over the next several weeks she’ll go head-to-head with the state legislature, deciding how they want to spend New York’s tax dollars.