On March 9, the New York State Senate and Assembly released their respective One-House Budget Proposals, outlining competing priorities that will guide negotiations with Governor Kathy Hochul.
Both chambers advanced plans to raise taxes on high-income earners and large corporations, despite Governor Hochul’s continued opposition. Legislative leaders argue the additional revenue is necessary to address fiscal pressures and fund expanded state programs. The proposals include increasing the corporate franchise tax from 7.25% to 9% for companies earning over $5 million, with the Assembly’s plan going further by including an increase to 9.25% for corporations with income over $10 million. In addition, both houses support granting New York City the authority to raise corporate tax rates, increasing taxes on financial firms from 9% to 10% and on non-financial corporations from 8.85% to 10.62%.
Regarding personal income taxes, the Senate includes a proposal to raise taxes for individuals earning more than $5 million annually by 0.5%, while the Assembly adopts a tiered approach with additional increases for income exceeding $5 million, $10 million, $25 million and $100 million.
The proposals also diverge sharply from the Governor on auto insurance reform. The Assembly removed Hochul’s proposals entirely, while the Senate retained the provisions providing consumers with premium discounts for having dashboard cameras, requiring insurers to provide explanations for rate increases, and requiring that excess profits are returned to consumers. The Senate also amended the language to add consumer privacy protections to the dashboard camera discount program and expanded rate increase explanations to include all increases.
While both houses agreed in some areas, they differed in others.
Assembly
As usual, the Assembly chose to strip as much policy from its One-House proposal as possible. However, it did add several consumer-focused initiatives aimed at addressing affordability, particularly when it comes to utility rates. The plan calls for a two-year moratorium on gas and electric rate increases approved by the Public Service Commission and the Long Island Power Authority. The Assembly also added language to implement a program providing residential ratepayers with “POWER” (Protect Our Wallets Energy Rebate) checks. The program would provide $500 payments to households earning under $150,000 and $300 payments to households earning between $150,000 and $300,000 to help offset higher utility bills.
The Assembly’s budget also proposes several tax changes to raise new revenue. In addition to higher rates on top earners and corporations, the plan includes a “crypto mining facility tax,” estimated to generate about $95 million annually, and other adjustments designed to increase state revenue.
Assembly leaders also propose expanding support for working families through investments in housing, healthcare, and education programs, while boosting aid to local governments and maintaining funding for key social services.
Senate
The Senate proposal includes increases in education funding, adding roughly $1.2 billion in additional school aid statewide. Also included in the plan are a range of targeted investments in education access and student support programs, including funding increases for Higher Education Opportunity Programs (HEOPs), the Science and Technology Entry Program, Collegiate Science and Technology Entry Programs, and the Library Partnerships Program.
Beyond education, the Senate’s proposal includes several major healthcare and social service investments. The plan adds $405 million in additional hospital funding, $270 million for nursing homes, hospice and assisted living programs, and $500 million in operating support for financially distressed hospitals. Added funding is also directed toward federally qualified health centers, home health agencies, and early intervention services for children.
Several climate and energy initiatives are also included. Lawmakers proposed rebates of up to $2,000 for the purchase of used zero-emission vehicles and up to $1,100 for electric bicycles and scooters, along with a new rebate program providing up to $2,000 or 30% of the cost for installing heat pumps. The proposal also advances the Accelerate Solar for Affordable Power (ASAP) Act, aimed at streamlining the process for connecting new solar projects to the grid and expanding capacity for distributed energy resources.
Other proposals in the Senate’s plan include grants and loans to support grocery stores in underserved communities through the Food Retail Establishment Subsidization for Healthy Communities (FRESH Communities) Act, expanded funding for aging services, and consumer protection measures.