Gov. Hochul Gets a Budget Deal, but No Signature Win

ALBANY, N.Y. — It was around dinner time on Thursday, with many New York State lawmakers already heading home to their districts, when Gov. Kathy Hochul dropped a budget bombshell: Roughly four weeks past the deadline, she and legislative leaders had reached a tentative deal.

She hastily convened a news conference in the Capitol’s ornate Red Room to announce the handshake agreement, but there were no hands to shake. Neither the leader of the Assembly nor the Senate was present, leaving Ms. Hochul to make a solitary victory lap around a $229 billion budget that, if passed by the Legislature next week, will be one month overdue.

But the governor had no grand policy program to trumpet. She backed off from her pledge to construct 800,000 new homes, a potential centerpiece of her first term. She abandoned her push to ban menthol and other flavored cigarettes.

The resulting agreement burnished the governor’s reputation as a centrist Democrat, with some of her key priorities — tough-on-crime changes to the state’s bail law, money set aside into reserves, and no new taxes or higher levies on the superrich — in line with more conservative themes.

The deal also reflects Ms. Hochul’s willingness to seek a series of compromises with the liberal Legislature.

The state will grant 22 new charter schools statewide, rather than the 100-odd ones in her initial proposal. New York’s minimum wage will rise, though not as far as some in the Legislature had hoped for. And a version of the progressive-backed Build Public Renewables Act will become law, but seemingly without some of the requirements that proponents said gave the measure its teeth.

While Ms. Hochul on Thursday described her relationship with the Senate majority leader, Andrea Stewart-Cousins, and the Assembly speaker, Carl E. Heastie, as “stronger than you could possibly believe,” she also nodded to the friction in the process — perhaps unavoidable, given that many of the Democratic lawmakers are to the governor’s political left.

“I will never shy away from a fight. You’re not always going to win,” she told reporters. “This state requires a leader who is not afraid to get knocked down once in a while. Because I always get back up.”

Even so, the protracted conflict leaves Ms. Hochul in a somewhat tenuous position with lawmakers, just a year after pledging to forge a new, more collaborative Albany.

Discussions over the budget were primarily waylaid by Ms. Hochul’s single-minded focus on bail, coming months after a bruising general election in which Republican candidates in New York blamed bail reform for the rise in pandemic-era crime. The strategy was a success; Democrats lost four House seats in New York, contributing to the party’s loss of power in the House.

Ms. Hochul herself eked out a victory over her Republican challenger, Lee Zeldin, by the narrowest margin New York had seen in three decades. For Ms. Hochul — who, throughout her career, has demonstrated a desire to seek consensus and adapt her political views to better reflect her constituents — winning some changes to the bail laws was critical to counter the perception that she was lax on crime.

While the response may have made political sense for Ms. Hochul, many lawmakers chafed at the request, coming so soon after they had been forced to defend the law during their own re-election campaigns.

“In effect, bail was a blockade: to the flow of information, to the flow of deal-making, to the flow of collaboration,” said Brad Hoylman-Sigal, who leads the Senate Judiciary Committee. “The conversations around bail prevented a lot of other good goals from advancing — namely her housing plan.”

When Ms. Hochul took office in 2021 after the resignation of Gov. Andrew M. Cuomo, many lawmakers looked forward to a less heavy-handed approach from the governor’s office. Still, Mr. Cuomo used his power with brute effectiveness, especially around budget time. When disputes arose from his own party, he was known to reach deals with Republican leaders to force Democratic lawmakers’ hands. He took pride in delivering budget agreements before or shortly after the April 1 deadline.

“In a sense, we got spoiled,” said Assemblyman Jeffrey Dinowitz, a Democrat representing the Bronx. “Say what you want about Andrew Cuomo, but he got the budget done on time.”

Several lawmakers remarked that it was one of the most opaque budget processes in their recollection, with fast-moving deals hatched behind closed doors, leaving rank-and-file members with no choice but to agree to proposals without seeing language.

A recent example involved negotiations about environmental measures, which some Assembly members believed to still be continuing at the time that the governor announced the handshake deal. As late as Friday, lawmakers remained unclear on the final shape of environmental measures, including the proposal to incorporate parts of the Build Public Renewables Act into state law.

Ms. Hochul also played down the delay in passage, saying that a good budget was preferable to a timely one. But as weeks dragged on, lawmakers grew increasingly frustrated about the process.

“It really is still three men in a room, just two happen to be women,” Patricia Fahy, a Democratic assemblywoman representing Albany, said of the negotiations among the leaders of the Senate, Assembly and governor. “That has not changed at all.”

The governor’s move to emphasize policy matters, rather than financial issues, started negotiations off in conflict, lawmakers said. And while it is not unusual for governors to use their budgetary leverage to shoehorn in policy issues, some found the governor’s approach to be particularly blunt.

But others suggested that she was simply making use of the tools at hand.

“A majority of the majority probably did not want to do what she wanted to do on bail,” said Senator James Skoufis, a Democrat from Orange County who supported the changes. “In those cases, collaboration is going to get you so far.”

The fact that her agenda was opposed by members of her own party adds to an uncomfortable dynamic in the capital that has been brewing since Senate Democrats refused to seat her initial chief judge pick, Hector D. LaSalle. That dynamic was worsened by a growing agitation over Ms. Hochul’s efforts to squeeze so much policy into the state budget.

Assemblywoman Latrice Walker, an architect and defender of the 2019 bail reforms suggested in a statement Thursday that she might vote against the budget, saying, “to put it mildly, this is not how democracy is supposed to work. I continue to reject efforts to hold the budget hostage in an attempt to jail more Black, brown and poor people pretrial.”

But others celebrated the changes, saying they would help restore a sense of safety for New Yorkers after a tumultuous few years. “This will definitely help us with our fentanyl crisis we have in Suffolk County,” said Monica Martinez, a Democrat senator from Long Island. “It gives our judges and our prosecutors or D.A.s an extra tool to use to make our county safe.”

By the time the governor had persuaded lawmakers to make small but meaningful tweaks to the bail law, there was little appetite for further compromise on an ambitious housing proposal that was opposed by some of the same suburban lawmakers whose support she desperately needed to push through criminal justice changes.

Ms. Fahy said that she believed the budget would contain meaningful programs that would improve the lives of New Yorkers, but lamented the process that had left needed policies, like a solution to the state’s housing crisis, unfunded.

Ms. Hochul has pledged to revive the issue outside the budget, but the monthlong delay means there will be little time to do so before session ends on June 8.

“Is this the most difficult budget? Yes,” Ms. Fahy said. “By a long shot.”