Kathy Hochul stalls release of ‘tax-and-spend’ budget report before election

Democratic Gov. Kathy Hochul, locked in a fierce election battle with Republican Lee Zeldin, has blown off an Oct. 30 deadline to release a key mid-year report on the state’s record-breaking $220 billion budget after bragging about meeting the mark last year.

Government watchdogs accused Hochul of attempting to sit on the “tax-and-spend” budget’s report until after the final day of voting on Tuesday, Nov. 8.

“There are important things voters should know regarding the state’s economy and budget outlook. I’m very critical that the governor hasn’t released it yet,” said Peter Warren, research director of the Empire Center for Public Policy.

Last year, Hochul put out a press release boasting the on-time release of the 2021 mid-year budget plan after years in which her predecessor, disgraced ex-Gov. Andrew Cuomo, missed the deadline.

Warren noted that Hochul and the legislature committed the state to spending billions of additional dollars — after the budget had already been approved.

For example, Hochul in August approved Green CHIPS law that boosts tax subsidies by $500 million per year and $10 billion total over 20 years for semiconductor manufacturing and other green projects.

Hochul has touted the bill on the campaign trail in recent weeks following the announcement that the company Micron would invest $100 billion in new facilities in the Syracuse area while getting billions in state tax breaks in the future.

Hochul has also been criticized for using nearly $1 billion in taxpayer funds in the budget as a slush fund to aid her re-election, including $350 million to dole out for projects in the battleground counties of Nassau and Suffolk in Long Island. She defended the spending because it was approved by the legislature.

Meanwhile, Warren said, a recent stock market dive on Wall Street could yield less tax revenue for the state and drive up red ink.

“The market downturn and steep interest rate hikes have whipsawed New York City’s financial services sector, which has suffered reduced revenues and increased interest expenses. As a result, securities firm profits for the first half of 2022 fell by more than half from the year-ago period, according to the Comptroller. That’s going to down-size end of year bonuses and the tax proceeds they yield,” Warren said in a blog post.

“The state budget seems set to endure a painful withdrawal from the rush of Wall Street-sourced revenue and emergency federal pandemic aid to which Albany leaders recently grew accustomed, especially since they’ve raised the spending baseline during the past few flush years.”

Republicans accused Hochul of trying to bury unflattering news during the election season.

“If the State’s financial outlook were positive, don’t you think Governor Hochul and every liberal media outlet would be promoting it around the clock with just one week to Election Day?” said Tom O’Mara (R-Corning), the ranking Republican on the state Senate Finance Committee.

“Gov. Hochul promised a new era of government transparency and it turned out to be just another era of broken promises from a New York State governor.”

Zeldin, the Long Island congressman and former state senator, said the Hochul-approved budget spends too much and taxes too much.

“Whatever gets spent in the new budget ends up becoming the new baseline for the next year’s budget. The trajectory right now spending is unsustainable in order to afford this spending,” Zeldin told reporters Wednesday.

Asked about the delay, state Department of Budget spokesman Shams Tarek said, “We expect that the report will be finalized soon. State revenue to date is ahead of forecasts and we expect to end the year with a surplus. We continue to review the latest economic data including the impact of any actions taken by the Federal Reserve this week.”

The Federal Reserve on Wednesday approved a fourth-straight rate hike of three-quarters of a percentage point as part of its to tame run-away inflation that is hurting the US economy.

The Hochul administration says concerns about overspending are misplaced and that the Green CHIPS law has not added costs to the state budget this year.

“The Empire Center’s remarks about the Green Chips program are based on a false premise. Not a single company has claimed those tax credits to date,” Tarek said.

“Not only does New York State have a surplus at this time, but New York’s Green Chips program is a tax credit – not a cash investment – that cannot be claimed until beneficial economic and job milestones are reached, and that enables New York State to create thousands of jobs and generate more revenue than it would otherwise have – for example it is enabling New York to benefit from the $100 billion investment that Micron is making into upstate New York in the years ahead.”