A Conversation With Kathy Hochul, Governor of New York

Fiscal Strategy and Federal Funding

• Governor Hochul is preparing significant state reserves for a potential fiscal cliff, noting that federal pandemic aid is not guaranteed for long-term budgeting.
• Specific actions include declining to commit short-term federal funds (such as the $6.2 billion MTA relief) to long-term spending commitments.
• The Governor aims to ensure New York State and its institutions, including the MTA, have the financial security to manage future crises, whether environmental or economic.

Taxation and Economic Migration

• Out-migration of high-net-worth individuals began in 2019, accelerated by the SALT cap elimination under the previous federal administration.
• Remote work trends have further driven individuals to relocate to states with lower tax rates.
• Hochul explicitly stated she has "no interest in raising taxes" to avoid driving away the taxpayers who fund New York's progressive programs.
• The administration is actively working to rebrand the state as "pro-business" to reverse the narrative of being anti-business.

Public Safety and New York City Recovery

• The Governor is collaborating closely with NYC Mayor Adams to increase police visibility in subways and address public safety concerns.
• Safety initiatives are framed as critical incentives to encourage the return of businesses and residents to the city, which is described as the state's economic engine.
• Hochul emphasized that while crime perception exists, there is no corresponding spike in actual crime rates.

Congestion Pricing and MTA Revenue

• Congestion pricing remains a critical component of the MTA's long-term revenue strategy for maintenance and expansion.
• The implementation was delayed by the pandemic and is currently awaiting federal approval, with a review process expected to conclude by the end of the year.
• Once approved, the policy aims to generate steady revenue while discouraging vehicle use to support environmental goals.

Education and School Operations

• Hochul maintained a firm stance that schools must remain open, avoiding closures during the Omicron surge in December.
• Safety protocols included a statewide mask mandate for all children and teachers.
• To minimize disruption, the state deployed 49 million test kits, enabling a quarantine reduction from 10 days to 5 days for exposed, unvaccinated students.
• A significant portion of the budget is allocated to hiring mental health workers to address the psychological impact of pandemic-related isolation on students.
• The Governor prioritized getting children vaccinated, citing that 91% of hospitalized children were unvaccinated.

Housing and Eviction Policy

• The state maintained eviction protections until January 15, extending the lifeline longer than most of the country due to prolonged economic hardship in NYC.
• The administration plans to incentivize the private sector to build 100,000 new affordable housing units.
• Strategies include utilizing the tax code to encourage mixed-use developments and the conversion of commercial real estate to residential use.
• Housing initiatives will include supportive services, such as mental health and substance abuse treatment, to address homelessness.

Political Outlook and Legislative Engagement

• Hochul confirmed her intent to campaign for legislative candidates who align with her priorities following the primary elections.
• She acknowledged the challenge of governing a politically polarized state, likening the dynamic to "governing parts of Texas and San Francisco at the same time."
• The Governor expressed confidence in her ability to build coalitions, including persuading Republicans to support fiscal and social priorities.
• Moderators noted Hochul's unique strength in fiscal management as a critical asset for the upcoming legislative session.