Gov., Legislators Reach Agreement on Framework of Budget Deal

ALBANY—The week began in Albany with the news that Gov. Kathy Hochul and leaders of the Senate and Assembly have agreed to a “conceptual agreement” on key priorities in the estimated $237-billion Fiscal Year 2025 New York State Budget. Included in this framework are some provisions of the controversial ‘Good Cause” eviction legislation, as well as a replacement for the 421a tax incentive in New York City.

“I promised to fight the right fights for New Yorkers, deliver common sense solutions, and tackle the thorny issues that others might ignore, and that's exactly what we’ve done,” Gov. Hochul said in a prepared statement. “We’re delivering on a common-sense agenda: fighting crime, fixing our mental health system, and building more housing so people can finally afford to live in New York.”

While specifics of the housing-related legislation were not released, City & State New York reports that sources indicate some carve-outs of the Good Cause Eviction proposal have angered tenant groups, while other provisions included have drawn the ire of landlords. State lawmakers passed a fifth budget extender on Monday that expires this Thursday, giving the governor and legislators a few more days to finalize the framework they have agreed to. The state budget deadline was April 1.

According to the governor, among the highlights of the conceptual agreement include:

The agreement addresses New York’s housing crisis by creating a new 485x tax incentive for affordable housing; extending the 421a incentive for projects already in the pipeline; making it easier to convert unused office space into affordable housing; eliminating outdated density caps in New York City; unlocking the potential of units that have been vacant since 2019 and establishing a new law to protect tenants from price gouging.
Creating a statewide tax incentive for multi-family housing; making $650 million in discretionary funds exclusively available to Pro-Housing Communities; providing incentives for communities that want more accessory dwelling units; investing $500 million to develop up to 15,000 new housing units on state-owned sites and protecting homeowners from deed theft.
Cracking down on retail theft by increasing penalties for offenders who assault retail workers; $40.2 million for retail theft enforcement; and a $3,000 tax credit for business owners to invest in security resources.
Shutting down illicit cannabis storefronts by authorizing the Office of Cannabis Management (OCM) to padlock businesses for a full year; allowing local governments to pass laws to execute padlock orders; establishing fines for landlords knowingly renting to retailers selling cannabis without a license.
Maintaining the state’s $3.9-billion commitment to support distressed hospitals and $20 billion multi-year investment to build new healthcare infrastructure, expand Medicare coverage for seniors and pregnant New Yorkers and increase the home care worker minimum wage.
Providing critical funding support to mass transit systems statewide, including $7.9 billion in operating aid for the MTA, $333 million for upstate transit systems, and $551 million for non-MTA downstate systems, a 5.4% increase in funding.
Contributing $2.6 billion for the third year of a record $32.9-billion five-year DOT Capital Plan, funding projects that are reconnecting communities across the state, and $100 million for local programs through the CHIPS program.
Making record environmental investments with $500 million for clean water, $400 million for the Environmental Protection Fund, and $47 million to support the governor's goal to plant 25 million trees by 2033.

Based on a preliminary assessment of the negotiated changes to the governor’s original budget proposal, the total budget for FY 2025 is currently estimated at $237 billion. The FY 2025 budget does not raise income or statewide business taxes and maintains state reserves at the gold standard of 15%.

New York City Mayor Eric Adams released a statement in reaction to the news of a conceptual budget agreement. He stated, “This budget will be a win for New Yorkers. Every day, this administration works to deliver on our vision that supports working-class families by protecting public safety, rebuilding our economy, and making this city more livable. As a result, crime is down, jobs are up, and our administration continues to deliver each day for everyday New Yorkers. But we’ve been clear that we need additional support from our partners in Albany to fully realize those goals and today we celebrate as most of our key asks were granted by our state partners.”