On Wednesday, February 1, 2023, Governor Hochul presented her $227 billion executive budget for fiscal year 2024 under the theme noted in her State of the State to make New York “safer, more affordable, and more livable.” The budget includes major investments in education, health care, mental health, housing, public safety, and the environment. The $227 billion budget (all funds) consists of $125.2 billion of state operating funds, which reflects an increase of $2.5 billion or 2 percent from the FY 2023 and includes historic investments in education and Medicaid. Education aid would increase by 10% to $34.4 billion. The state Medicaid share would grow to $27.8 billion, which is a 7.7% increase. The final budget is due on April 1.
Due to greater than expected tax receipts, the State has a surplus of $8.7 billion. Despite the surplus, the Division of Budget (DOB) notes that federal COVID-19 dollars are waning and warns of a slowing economy. DOB also predicts that the surge in tax collections will peak by the end of FY 2023 (March 31). Therefore, the Governor’s budget programs much of the surplus into the State’s general reserves, the debt reduction reserve, and the Retiree Health Trust Fund, with the remainder used to manage future expenses and budget gaps. The financial plan also notes of significant out-year budget gaps: $5.7 billion in FY 2025, $9.0 billion in FY 2026, and $7.5 billion in FY 2027 for a total of $22 billion over the next three fiscal years. The budget briefing materials note the reason for the gaps “…are due principally to the downward revisions in projected tax receipts, which have been lowered by nearly $21 billion (FY 2025 to FY 2027) in comparison to the enacted budget financial plan.” Of note, the gaps do not reflect use of funds that have been placed in the State’s rainy-day fund, which total $20 billion since 2020.
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DOB’s FY 2024 Budget Information