Race to the Finish

NY Budget Logjam Breaks, Final Hurdles, Vying for Governor?

Author

Jack O’Donnell
April 21, 2025

Good morning from Albany, New York, where the state budget is now three weeks late.

Lawmakers are expected back in town early tomorrow and will approve another extender (Temporary Appropriation Bill #7 for those of you keeping track) to keep the government funded, but there are signs of progress.

Heastie: 'Discovery's Done' as New York Leaders Make State Budget 'Progress'

The biggest area of progress involves changes to New York’s discovery laws. At a press conference on Wednesday, Hochul offered, “I think we’re very, very close to being done and perhaps today will be the day we say, ‘Pens are down.” The changes are in response to the state’s 2019 discovery reforms, which Hochul has argued have led to an influx of case dismissals for minor technicalities, especially in domestic violence cases. On the other hand, the NYS Black, Puerto Rican, Hispanic & Asian Legislative Caucus and the Legal Aid Society have opposed any changes to discovery. District Attorneys—including New York County District Attorney Alvin Bragg—have insisted that Governor Kathy Hochul’s proposed changes are, nonetheless, necessary. The framework agreement under discussion (and generally agreed upon) would require prosecutors to turn over any evidence that is “relevant” to the charges, a more narrow standard than the current requirement to turn over all evidence “related” to the case. The deal would give defendants 35 days to file a challenge to the prosecution’s discovery evidence and clarifies that cases should only be dismissed if prosecutors do not act in good faith or do proper “due diligence.”

Even with the issue of discovery cleared from the deck, there are still a handful of difficult issues for lawmakers to work through in addition to actual dollars and cents decisions to be made.

After the discovery battle, the mental health debate is expected to take the state budget stage.

There is still no agreement on Hochul’s proposal to change the standards by which an individual experiencing a mental health crisis can be involuntarily committed. Assembly Member Jo Anne Simon, Chair of the Assembly Mental Health Committee, objects to the proposed changes on involuntary commitment standards, fighting instead for increased resources for mental health professionals. Simon offered, “If we’re talking about public safety, the best way to keep people safe is to give people the treatment they need. We can virtually moot this problem if we address the issue with the kinds of solutions that actually make a difference.” Heastie has not offered much insight into his position, but did characterize negotiations on the issue as close, saying, “I think on that one, we’re in the same neighborhood.” The Assembly is still pushing for a requirement that everyone in the system receive a discharge plan and a referral for services after they are released.

OD&A on LinkedIn:

“Life goes on in New York,” says our Jack O'Donnell. “I don’t see at this point there are political repercussions to a late budget.” Read more of his insight on the tense talks in Albany as he talks to POLITICO New York Playbook author Nick Reisman.

The Senate and Assembly are still split on Hochul’s proposal to create the crime of “masked harassment,” a late addition to budget negotiations. Senate Finance Chair Liz Krueger suggested this could be a post-budget issue, offering, “I don’t know whether that’s going to be taken up in the budget, sincerely.” 

The Legislature also must decide about backing Hochul’s plan to create single-ticket gubernatorial elections, a change from the current practice where the lieutenant governor runs separately from their potential boss in party primaries, but then as a ticket in the general election.

The final budget will include Hochul’s bell-to-bell cell phone ban in schools, a major priority for her and parents' groups across the state. There is also an agreement to fund the Metropolitan Transportation Authority’s (MTA) 2025-2029 Capital Plan through an increase in the payroll mobility tax. The tax hike will be spread across the entire MTA service area, not just New York City, and will mainly impact businesses with the highest payrolls. Employers with payrolls under $5 million will likely receive a small decrease, allowing lawmakers to declare a moral victory. 

Hey Albany! Let’s Finish the Budget—You Know, the One with the Money

Hochul and leadership in the legislature were thrown a small lifeline by a recent report from Comptroller Tom DiNapoli showing tax collections for SFY 2024-25 were $2.1 billion higher than expected, giving lawmakers more leeway to fill in funding gaps. Despite the increase, DiNapoli still counseled caution, writing, “However, policy decisions at the federal level, such as tariffs and federal aid cuts, are currently causing economic uncertainty. While the actual impact of these policies is unknown, the heightened risks they pose should be considered as the enacted budget for SFY 2025-26 is finalized.” 

There is widespread hope that top lawmakers and staff made progress over the Easter weekend—there was a secretaries’ meeting on Saturday afternoon—and that the progress would lead to printing (and approving) bills this week. That remains possible but not particularly likely. As we are in the aphorism phase, I will say positively that hope is not a strategy, but still springs eternal. More particularly, Senate Deputy Leader Mike Gianaris offered, “I think certainly in the next week or two is realistic. The dam has been broken on the discovery issue that was holding up a lot.”

The high-stakes fight for control of Congress in 2026 was brought home this week in a seemingly trivial municipal fight unfolding in the Hudson Valley: Republican Putnam County Executive Kevin Byrne sent a letter calling on his own appointee to the Metropolitan Transportation Authority (MTA) board, Democrat Neal Zuckerman, to resign. Byrne cited Zuckerman’s support for congestion pricing, which Zuckerman supported before Byrne appointed him to the MTA, and Zuckerman’s criticism of Republican Congressman Mike Lawler as justification for his resignation.

In the letter, Byrne writes, “You have not only outright opposed the policy positions of this county government and Administration, but have openly assailed several officials who were duly elected by the people of Putnam County. Furthermore, recent reports make clear that you intend to present yourself as a candidate for public office and seem to be using your position in furtherance of that pursuit.” In his response, Zuckerman pointed out that Byrne has no authority to remove him from the MTA board and added, "as a Senate-confirmed appointee nominated by Governor Hochul, I intend to serve for the remainder of my term, unless my circumstances change.” The dueling letters come as Lawler mulls a campaign for governor, and Byrne explores his campaign for Lawler’s Congressional seat. The district is one of the most competitive in the country, and four Democrats have already filed to run, not including Zuckerman. 

Lawler, however, is not the only New York Republican in Congress with his eye on the Governor’s Mansion. Rep. Elise Stefanik (R-NY), who was recently relegated to the House after her nomination to serve as U.N. Ambassador was pulled late last month, is reportedly considering a run for governor.

Stefanik would be a strong entrant into a Republican primary field that could include Lawler and Nassau County Executive Bruce Blakeman. Stefanik has the highest name recognition of any elected Republican in New York and has a reliable network of donors who have contributed to her $10 million cash in hand. Whoever the nominee is, they will be looking to build on now-EPA Administrator Lee Zeldin’s 2022 performance, where he came within seven points of becoming the state’s first Republican governor since George Pataki left office in 2002. A primary would seriously damage any Republican’s chances in deep blue New York, so this is worth watching, especially as another New Yorker, President Donald Trump, will have a lot to say about this race.

In fact, the Trump Administration announced last week that the U.S. Department of Transportation (DOT) will be taking sole control of the $7 billion rehab of Penn Station in New York City, removing the MTA as the lead on the reconstruction project. In a press release, DOT Secretary Sean Duffy said, “New York City deserves a Penn Station that reflects America’s greatness and is safe and clean. The MTA’s history of inefficiency, waste, and mismanagement also meant that a new approach is needed.” Hochul, somewhat tongue-in-cheek, marketed the move as a win for New Yorkers, saying, “I want to thank the President and Secretary Duffy for taking on the sole responsibility to deliver the beautiful new $7 billion station that New Yorkers deserve.” The federal government plans to work with Amtrak, which owns Penn Station, to reconstruct the current station while also undertaking a major expansion, allowing more passenger train service in and out of Manhattan. Hochul had previously requested federal funding to complete the overhaul and said the federal government’s takeover will save New York taxpayers $1.3 billion. The project has been under discussion for decades, and make no mistake, this is personally important to President Trump, and now all eyes are on whether the complicated project will move forward.

In Washington, D.C., lawmakers will return next week from their two-week holiday recess to begin the tedious work of crafting “one big, beautiful bill” that delivers many of President Trump’s campaign promises on taxes, the border, energy, and defense spending. House Speaker Mike Johnson (R-La.) and his narrow majority have stayed strong, but these will be their hardest tests so far as House Republicans are set to unveil and debate major pieces of their sprawling megabill, including boosts to border security and deportation funding, when lawmakers return from recess at the end of the month.

House Panels Set to Meet on GOP Border Security, Deportation Proposals

Meetings are scheduled for the Judiciary, Homeland Security, and Armed Services committees the week of April 28 that will highlight significant policy changes that further empower the Trump Administration to carry out mass deportations while financing an expanded military presence at the southern border. Republicans are also planning to increase immigration fees and slash social services for migrants seeking to enter the country.

GOP leaders’ push to hammer out the immigration-focused pieces of the massive package comes amid a growing battle on Capitol Hill over President Donald Trump's deportation policy. Republicans are moving quickly to write their proposals into legislation after finally agreeing on a budget blueprint for the party-line domestic policy bill last week.

The Judiciary Committee will meet April 30 to debate its part of the GOP package, which is set to include $110 billion in spending on immigration enforcement. The Homeland Security Committee is targeting its hearing for April 29, with as much as $90 billion for boosting deportations and other efforts at stake. The Armed Services Committee will also meet on April 29, with the House panel needing to reconcile the gap between its $100 billion spending target and the Senate’s $150 billion directive, which is expected to win out. Chair Mike Rogers (R-Ala.) and other defense hawks have been pressing for the House to hit a higher number, after initially pushing $125 billion.

The Pentagon portion of the GOP reconciliation effort would likely include money for the Trump Administration’s expanded military mission at the U.S.-Mexico border, where more active-duty troops have been positioned in recent months. It will likely also include funding for costly long-term programs, such as Navy shipbuilding and efforts to overhaul the U.S. nuclear weapons arsenal.

The Transportation and Infrastructure Committee also aims to meet on April 29, and the House Financial Services panel is targeting an April 30 markup.

U.S. Seeks to Turn Deportations into an Efficient Business ‘Like Amazon’

A second round of markups will be in May as the Energy and Commerce Committee and the Agriculture Committee plan to meet the week of May 5, bringing clashes over Medicaid and the future of the country’s most extensive anti-hunger program: the Supplemental Nutrition Assistance Program. Energy and Commerce, which has jurisdiction over Medicaid, is assigned to find $880 billion in savings, causing some internal strife for many Republicans. The Committee is expected to pursue reforms to Pharmacy Benefit Managers (PBMs) and a rollback of Biden-era electric vehicle mandates. Still, policy experts have said $880 billion in savings would be nearly impossible for the committee to realize without steep cuts to Medicaid. One potential workaround floated by Energy and Commerce Chair Brett Guthrie (R-KY) is lowering the federal payment share for beneficiaries in states that have expanded Medicaid, forcing states to either cut benefits or make up the difference themselves.

However, many House Republicans, especially those in vulnerable districts, are wary of Medicaid cuts, and twelve signed a letter to Speaker Johnson articulating those concerns.

“We cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations,” the members said in the letter led by Rep. David Valadao (R-Calif.) and Rep. Don Bacon (R-Neb.).

“Balancing the federal budget must not come at the expense of those who depend on these benefits for their health and economic security,” the members said.

Along with Valadao and Bacon, the Republicans who signed the letter are largely moderate members from the more competitive districts in the country: Reps. Jeff Van Drew (N.J.), Rob Bresnahan (Pa.), Juan Ciscomani (Ariz.), Jen Kiggans (Va.), Young Kim (Calif.), Rob Wittman (Va.), Nicole Malliotakis (N.Y.), Nick LaLota (N.Y.), Andrew Garbarino (N.Y.) and Jeff Hurd (Colo.).

Expect to hear a lot about only cutting waste, fraud, and abuse within the program, but with Democrats digging in, this will be a key battleground both for the politics and for Johnson’s ability to pass something that also keeps Conservatives happy. 

WATCH: Kevin Hassett Speaks to Reporters at White House Driveway

National Economic Council Director Kevin Hassett spoke to reporters outside of the White House on President Trump's economic agenda. He answered questions on how the president's tariffs could impact inflation and how long the American people could feel an economic strain.

All of this is with an eye towards final passage this summer. Kevin Hassett, director of the National Economic Council, told reporters that the timeline for passing the reconciliation bill through Congress is “by the summer, early summer.” Hassett went on to say that White House officials have “had meetings with the so-called Big Six over and over again since Japan. And we expect probably to finalize the president’s thoughts on the tax agenda—at least first thoughts, opening salvos—by sometime next week.”

Finally…

A Michigan community gave book lending a new look—helping a bookshop move each of its 9,100 books one by one to a new location.

Jack breaks down the issues jamming up the NY Budget in this week’s Monday Morning Minute:

🎙️Who blinks first on the stickiest issues?

🎙️Will NYC businesses save the MTA?

🎙️Where does the “mask ban” stand?

🎙️Do New Yorkers really care that the final budget is late?

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Gabriella is the first Latina and the first public defender ever elected to represent Albany’s 6th Ward, where she served on the Albany Common Council beginning in 2021. During her tenure, she authored and championed legislation that expanded tenant protections, tackled absentee landlords, invested in infrastructure and public spaces, and supported workers’ rights. She also launched a street outreach initiative connecting vulnerable neighbors with supportive services, reflecting her belief in community-based approaches to public safety.

A graduate of Union College and Albany Law School, Gabriella distinguished herself as a Minerva Fellow in Ecuador, Editor-in-Chief of the Government Law Review, and a Pro Bono Scholar. Following law school, she became a public defender and felony trial attorney, advocating for individuals who lacked the resources to defend themselves. Her work in criminal defense—and her understanding of how poverty, housing instability, and systemic inequality intersect with the criminal justice system—continues to inform her legislative priorities.

Gabriella’s platform centers on ensuring access to safe and affordable housing, high-quality public education, healthcare (including comprehensive reproductive care), and good-paying jobs. She is a vocal advocate for addressing the root causes of crime through holistic diversion programs and expanded community investment. As a climate advocate, she also supports bold action to confront the climate crisis, especially in communities disproportionately impacted by environmental degradation.

Since her election to the Assembly in 2024, Gabriella has continued to fight for the residents of Albany, New Scotland, and Guilderland—delivering progressive policy solutions grounded in real-life experience. Her deep roots in the community, legal background, and unwavering commitment to public service make her a powerful voice for working families across the Capital Region.

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