Hochul’s NY budget bailed out by nearly $3B in extra tax revenue — but massive deficits loom

ALBANY – Gov. Kathy Hochul is crying poverty, even while the state once again saw a massive boom in tax revenue over the first half of the fiscal year — eclipsing her office’s projections by nearly $3 billion.

The state is now on track to rake in $259 billion in revenue this fiscal year thanks to the six-month boost — $2.6 billion more for the 12-month period than Hochul’s budget office had originally forecast.

Despite the windfall, the governor’s office on Thursday insisted that not all of their budget concerns have come to pass — as Hochul once again argued she wouldn’t step in to help fund state programs that have taken a hit due to the federal government shutdown.

While New York state hit a massive boom in tax revenue over the first half of the fiscal year, Gov. Hochul still has budget concerns. Matthew McDermott

“We’re not going to do those extraordinary measures,” Hochul said when asked about the loss of $650 per month in SNAP benefits that goes to New Yorkers.

Earlier this year, Hochul said she was assembling an “internal SWAT team” of people to “go through system by system and how they can figure out ways we can manage our government despite these shortfalls,” including people getting kicked off SNAP.

“I will have a lot of people involved in this. This has to be a whole of government approach,” she said at the time.

Fiscal conservatives, like Assemblyman Ed Ra (R-Nassau), the top Republican on the Ways & Means Committee, say the increased tax receipts are certainly a positive, but that Dems can’t keep leaning on sunny days.

“If they were so worried the sky was falling why did we have the biggest year-to-year increase in spending since the great recession?” Ra said.

“If the economy slows and those tax receipts slow, we’re going to have a problem. It’s not going to be D.C., it’s going to be because we year-after-year commit ourselves to non-sustainable spending,” he added.

An additional $5 billion in tax receipts were also projected for the 2026 fiscal year.

The budget office is now projecting a $27 billion budget gap for fiscal years 2027 to 2029.

It had put the same number at $34 billion.

The “Big Beautiful Bill” is expected to add $8.2 billion to the state’s deficits through 2029, per the budget office’s report.

“It’s something that lawmakers should tackle and make some smart choices next year during the budget process to rein that in and try to close those gaps that existed even before federal actions were taken,” Patrick O’Recki, Director of State Studies at the Citizens Budget Commission said.

Hochul also told reporters that she wouldn’t step in to help fund state programs that have been affected by the government shutdown. Getty Images

Democrats in Albany blazed ahead jacking up spending again this year, despite the economic uncertainties on the horizon and looming threats from the Trump administration.

Hochul herself pronounced it was a rainy day financial picture earlier this year when touting her and lawmakers’ decision to spend down nearly $7 billion from reserve funds to pay off unemployment insurance debt following a big push by business groups and big unions.

She’s also fiercely defended a widely-panned move to spend $2 billion handing out $150-$400 checks to New Yorkers.