Gov. Hochul outlines draft $237B budget that touches on housing but ignores NYC mayoral control of schools

Gov. Hochul said Monday that she and state lawmakers have agreed to the broad outline of a $237 billion budget that would reserve $2.4 billion for the city’s migrant crisis and include a housing deal to protect tenants and spur construction.

Her speech — which surprised some lawmakers who’d viewed talks on the overdue budget as ongoing — did not directly address a key issue that has been revived in budget negotiations: Whether the spending plan will include an extension of Mayor Adams’ control of city schools.

In recent days, Hochul made a last-minute push to use the budget to authorize an extension. She and the mayor, a fellow Democrat, are considered allies — an unusual departure from years of discord between Albany and City Hall — and Adams has sought the school-control extension, which must be approved by the state.

Legislative leaders had expressed a preference for dealing with the question later in the lawmaking session, outside budget talks. But state Sen. John Liu, the Queens Democrat who chairs the New York City Education Committee, said Monday that a “short-term extension” of mayoral control would be in the budget.

“Nothing’s final,” he emphasized. “It really isn’t over until the lady starts singing, which she has not yet.”

To win an expected two-year insertion of mayoral control into the budget, Hochul agreed to expand the number of New Yorkers who could fall under new tenant protections, according to two people with knowledge of the negotiations.

Broadly, the housing framework would stop landlords from price gouging tenants and create a six-year extension of a lapsed tax break for developers called 421a, the governor said in her speech in Albany.

“I’m really proud that the fiscal year 2025 budget achieves what so many said was impossible: A transformative deal to reverse the downward spiral of housing stock — all while protecting our tenants,” Hochul said.

Her announcement, which came just over two weeks after the state budget deadline, was short on specifics on housing.

Lawmakers stressed Monday that some elements of the deal had not been finalized.

At least some were surprised that Hochul delivered her speech before the deal was done. Assemblyman Harvey Epstein, a Manhattan Democrat, said he was “in shock.”

Assemblywoman Linda Rosenthal, a Manhattan Democrat who chairs the Housing Committee, said housing talks were “pretty close” but added that ink has not fully dried in some areas.

Adams said in a statement that “most” of the city’s top priorities were addressed in the plan. He cited “the major package of legislation to grow our affordable housing supply and protect tenants,” as well as migrant funding and plans to help the city fight illicit cannabis shops.

The mayor added that the city would “continue to fight for New Yorkers on crucial issues, especially preserving mayoral accountability as we advocate to support public school children.”

The issue of migrant funding has appeared settled for weeks, but it does not meet the level that Adams’ office requested — upward of $2.8 billion — when the mayor made an annual trip to Albany in February known as Tin Cup Day.

The budget has been delayed by complex negotiations over the elusive housing compromise, with lawmakers pushing the governor to approve broader tenant protections. Since the April 1 deadline came and went, the Legislature has passed so-called extender bills to keep the government open.

Hochul’s announcement puts Albany on a potential schedule to approve a late deal that would still be more timely than last year’s $229 billion budget, which the governor signed more than a month late. A year ago, budget talks were delayed by Hochul’s efforts to toughen the state’s bail laws and by a push for a bold housing-creation package that ran aground in the Legislature.

Once the budget talks are settled, lawmakers will vote on the legislation before it lands on the governor’s desk.

In January, Hochul unveiled a $233 billion blueprint that would have included a four-year extension of mayoral control of city schools. The state Senate and Assembly responded in March with two $246 billion spending plans that each removed mayoral control and pushed for strong tenant protections.

With Cayla Bamberger and Chris Sommerfeldt