2024 State Election Results Dashboard
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Key Takeaways:

  • The New York legislative chambers released their “one house” amendments to the state budget to counter the opening bid that Governor Kathy Hochul (D) presented with her January executive budget.
  • Governor Hochul was clear that she did not want to raise taxes this year to address the state’s deficit, but the legislature is seeking to raise billions to close the budget gap.
  • New York splits their budget up into several different bills that affect different policy areas (transportation, health, housing, etc.) and the major tax policy provisions are in AB 8809 / SB 8309. Included in these are several major tax changes, including increases to the corporate franchise tax and personal income tax on upper-income earners and several changes to various credits and exemptions.
  • New York’s fiscal year ends on March 30, but the Hochul administration does not have a record of enacting an on-time budget.


The New York Assembly and Senate recently released their “one house” amendments to the state budget, providing the legislature’s counter to the opening bid that Governor Kathy Hochul (D) presented with her executive budget in January. When she unveiled her budget, Governor Hochul declared that she opposed any broad-based tax increases this year; however, the legislature’s fiscal plan is currently at odds with the governor. 


What’s in the New York Legislature’s Budget?

New York splits their budget up into several different bills that affect different policy areas (transportation, health, housing, etc.) and the major tax policy provisions are in two bills (NY AB 8809 / SB 8309).

These bills are several hundred pages long, but the marquee provisions that both chambers include are:

  • Increases corporate franchise tax: The chambers proposed increasing the corporate franchise tax rate to 9 percent for companies with business income over $5 million for tax years between 2024 and 2027 (Assembly Part S, Senate Part II).

  • Creates work opportunity credit: Both chambers included a credit of $500 per eligible employee per year (Assembly Part CC, Senate Part FF), although the chambers differ on the lifetime limit of the credit and how long the program can last.

  • Increases rates for upper earners: Each bill included identical personal income rate increases for upper-income earners (Assembly Part T, Senate Part CC). The Assembly also included a new alternative tax table benefit recapture provision that is not included in the Senate bill. 

  • Extends financial services personal property exemption: The Assembly and Senate both followed the governor in seeking to extend the property tax exemption for tangible personal property sold to certain previously connected financial service firms (Assembly/Senate Part I); however they differ on how long to extend it for.

  • Extends sales tax exemption for certain foods/drinks: Both chambers maintain an exemption for candy and confectionery, fruit drinks, soft drinks dispensed at soda fountains, and water through May 31, 2025 (Assembly/Senate Part J).

The Assembly is also proposing additional tax exemptions for oral hygiene products (Part AA) as well as a tax holiday for holidays for fire extinguishers, fire alarms, heat alarms, carbon monoxide alarms (Part Y), and back-to-school supplies (Part Z), but the Senate did not include these in its bill. 

While the legislature will debate many consequential tax ideas during their budget talks, two notable policies did not make it into their final submissions. The Business Council of New York State previously reported that lawmakers were also mulling including either a data tax (a proposal similar to the one that Sen. Liz Kruger (D) has been working on (NY SB 2012)) or a new carbon emissions assessment. 


Political Background and Next Steps

Under former Governor Andrew Cuomo (D) the budget was a tightly controlled process, with the governor’s office setting most of the agenda and the legislature mostly acquiescing to the executive’s preferences. Since Cuomo’s ouster, however, legislative leaders have been increasingly willing to assert their policy independence and propose their own consequential budget amendments. 

This year’s one-house amendments are the current high-water mark. As mentioned above, Governor Hochul was clear that she did not want to raise taxes this year to deal with the state’s multi-billion dollar deficit, but the legislature rejected this and is now seeking to raise billions to close the budget gap. 

New York’s fiscal year ends on March 30, so the next few days will be a sprint as leaders from the two legislative chambers and the governor try to iron out their differences and find a final compromise. They are projecting confidence that a deal will be done by the deadline, but it’s worth remembering that Governor Hochul has not enacted an on-time budget during her entire term of office.


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