Another year, another late budget. Under New York law, April 1st is the first day of the state’s fiscal year, meaning that a new budget should be in place. Like the previous ones during Governor Hochul’s tenure, this one almost certainly will be late.
The reason? Governor Hochul’s insistence that state lawmakers accept her non-budgetary priorities as part of the final budget agreement.
As of the time of this opinion, all evidence is that there will be no on-time budget agreement. Assuming that the budget is late, the governor and lawmakers will have to do an emergency extension of the current fiscal year’s budget. For how long? With the religious holidays of Easter and Passover starting early, the extension could easily stretch into mid-April.
Earlier this year, it wasn’t expected that this year’s budget would get held up. Wrestling to develop a state budget that is the second largest in the nation is always difficult. Adding to the challenge is the impact of cuts approved by the Congress. Yet earlier this year observers thought there was a chance that this year’s budget would be less contentious: after all, 2026 is an election year and the budget proposed by the governor in January seemed, at that time, to be one that lawmakers could agree to.
However, after the public review of the governor’s budget was completed, the governor insisted that there would be no final agreement unless and until lawmakers agreed to changes to the state’s Climate Law and auto insurance regulations. Far from trivial matters.
Both of these issues are regulated by the state but play no central role in the development of this year’s budget. The governor’s plan to change major pieces of the state’s auto insurance law in the budget was rejected by both the Senate and Assembly. Why? Because they didn’t have much at all to do with the budget.
The governor has campaigned across the state arguing that New York’s rising auto insurance premiums are the result of fraud and “staged auto accidents.” No one would defend either, but they are both already illegal. What lawmakers found objectionable was the governor’s “fix”: changing the way people are compensated after they are hurt in a car crash.
Why put compensation limits for those injured in car crashes? Hard to say, but we do know that ride sharing giant Uber is spending millions of dollars on an advocacy campaign to limit compensation for injured car passengers and drivers. Why? Because they are on the hook when their drivers are involved in an accident.
So, there is a disconnect between what the governor says is the problem (fraud which is already illegal) and the solution being compensation limits for those injured in car crashes. Thus, lawmakers kicked her plan out of the budget. That’s not to say that lawmakers should ignore the governor’s complaints. If the governor’s allegations that fraud has gotten worse are true, they should examine what insurers, and her Administration, have been doing to fight fraud in recent years as well as the reasons for increasing insurance costs generally.
However, at least the governor actually offered an auto insurance plan in her budget. When it comes to changes to the Climate Law, she did not – and has still not offered one. The closest she has come is an opinion piece published on a news website. Hardly the stuff of legislation.
In this case, the governor’s “plan” is to weaken the state’s regulation of methane emissions (the worst of the greenhouse gases) and push further into the future the requirements for the state’s reduction in greenhouse gas emissions – which are the drivers of climate change. What does that have to do with the budget? Nothing, but given the governor’s power in the budget process, she’s using the leverage she has to advance climate law and auto insurance changes.
Getting the budget done by April 1st is what Governor Hochul and state lawmakers are supposed to do. The state budget is the centerpiece of the legislative session, the most important task that voters “hire” elected officials to do when they cast their votes. When the governor links her non-budget agenda to the budget which causes it to be late, it feeds an increasingly cynical electorate’s assessment that Albany can’t get its work done like it’s supposed to.
It shouldn’t be this way. New Yorkers deserve better. After all, it’s your money.