On March 12, 2024, the New York State Assembly and Senate released their one-house budgets, indicating their priorities for the Fiscal Year 2025 (FY25) budget.

Both houses proposed raising taxes for high earners, increasing the tax rate to 10.8% (from 10.3%) for those making between $5M and $25M and to 11.4% (from 10.9%) for those making over $25M, lasting through the 2027 tax year. The Senate and Assembly also proposed raising the corporate tax rate to 9% (from 7.25%) through the 2026 tax year. In a statement, Governor Hochul indicated these proposals are a “nonstarter,” and she has declined to raise taxes in her own proposal.

Both houses of the legislature are prioritizing housing. The Senate included a proposal for a new public benefits corporation to build affordable housing on state-owned land and stated they are “open to further discussing” the creation of a tax exemption for new multi-family construction in NYC, so long as it includes deeper affordability requirements, strong transparency and compliance provisions, living wages for construction and building service workers, and is proposed as part of a comprehensive housing package including Good Cause Eviction. The Assembly did not include this language but joined the Senate in advocating for a $250M rental voucher program to help New Yorkers at risk of eviction.

Both the Assembly and Senate rejected the Governor’s adjustment of school funding distribution, which would have ended a policy ensuring that schools receive at least as much state funding as the prior year despite enrollment declines. The Senate included $1M in their recommended budget to conduct a study on how to adjust the education funding formula. Both houses included proposals that would restore cuts to school funding, but neither house proposed to extend NYC mayoral control over the City’s schools (which has been in place since 2002 and expires this year). The Assembly and Senate also accepted the Governor’s proposed funding of $2.4B in asylum seeker funding for NYC, although Mayor Adams has stated that the City requires increased funding.

Now that the legislature has released its one-house budgets, negotiations will begin with the Governor’s team. The final budget is due on April 1.