Heat Rising

Good morning from New York City, where on this day in 1808, Hamilton Fish was born. Elected 16^th Governor of New York, Fish expanded public education and supported a state agricultural college, reforming tax laws and modernizing the criminal code.

Back in our day, in Albany, the New York State Department of Budget released its first statutorily required quarterly budget update for FY 2027. The report was light on details, citing the “limited time that has elapsed since the release of the FY 2027 Enacted Budget Financial Plan on June 10, 2026.”

The report later added, “the DOB is not revising its annual projections of receipts and disbursements for results through the first quarter, which ended on June 30, 2026. Accordingly, the projections and underlying assumptions in the FY 2027 Enacted Budget Financial Plan remain unchanged and will serve as the First Quarterly Update Financial Plan.” The report did find State Operating Fund spending was 7 percent higher than last year, largely attributed to planned increases in School Aid and Medicaid spending. General fund spending was down compared to last year due to a one-time lump sum payment to alleviate New York’s federal unemployment insurance debt. The timing point is fair, though the lack of any details on the impact of the slowing national economy or continued rising health care and energy costs masks any potential future impacts on New York’s fiscal outlook, helpful to an incumbent in the middle of a gubernatorial campaign.

Nevertheless, it is clear that New York’s budget faces significant headwinds in the coming years, and the ascendant Democratic Socialists of America (DSA) believe the answer is staring Governor Kathy Hochul in the face. Gustavo Gordillo, the co-leader of New York City’s D.S.A. chapter, indicated that the DSA, bolstered by a slew of primary victories in June, is well-positioned to pressure Hochul into taxing the rich.

Gordillo offered, “We brought the fight to Hochul to tax the rich last session when we had only nine socialists in the State Legislature. This cycle, our forces will be almost doubled, and there’s a whole new crew of progressive legislators who are going to demand what New Yorkers want, which is for Hochul to tax the rich.” The DSA’s policy ambitions do not end there. The group is making a renewed push for the “Not on Our Dime” bill, which would strip state nonprofits of their tax-exempt status if their funds are used to support Israeli settlement construction, and is also pursuing legislation to penalize airlines that ship arms from JFK International Airport to Israel. Other priorities include a measure to power 12 million households using public renewable energy, as well as expanding access to free childcare. Hochul has partnered with the DSA’s most prominent public face, New York City Mayor Zohran Mamdani, on issues including the pied-à-terre tax and childcare, but has more regularly served as a moderate foil for many of the group’s more aspirational policy goals. Now that Mamdani has his feet under him, look for the first-term mayor to use more of his political capital to push for the DSA’s policy priorities when lawmakers return to Albany in January. 

Hochul and Attorney General Letitia James announced last week that the newly formed Office of Immigrant Trust (OIT) sent letters to the 12 local law enforcement agencies that have formal cooperation agreements with federal immigration authorities, known as 287(g) agreements, stating that they must be terminated by August 25th. The ban on 287(g) agreements was one of Hochul’s flagship immigration policies from the budget after she resisted calls to implement an expansive package of immigration protections, known as New York for All. In a statement, Hochul said, “Nobody is above the law. In New York, we will not tolerate the diversion of local resources for federal civil immigration enforcement at the expense of public safety. That is why we passed a commonsense set of laws standing up against federal overreach and ensuring that local law enforcement are not deputized by the highest-funded law enforcement agency in the country.” 

Rensselaer County Executive Steve McLaughlin, a Republican and frequent critic of Hochul on social media, announced that he has no intention of ending Rensselaer County’s 287(g) agreement with Immigration and Customs Enforcement (ICE). In a Facebook video, McLaughlin said, “We do that to make sure they're not Tren de Aragua or MS-13 or any other vicious, violent gang intent on doing your family harm. That’s why we aren't going to stop. This is a line in the sand for us. We will not yield.” Hochul had no interest in getting into a back-and-forth with McLaughlin, saying succinctly in a statement, “Counties do not get to pick and choose which state laws they follow, and those that do not comply within the 90-day wind-down period will be held accountable.” Stay tuned…

In political news, the Blakeman campaign is continuing its use of positive visualization, contending that a new poll found their candidate only trailing Hochul by 4 points. The poll, conducted by a pro-Blakeman super PAC, reported that only 47% of respondents said they would back Hochul’s reelection, with a full 43% saying they will support Blakeman. Those results would be a sea change from more mainstream polling outfits, including a Siena University Poll from June that found Hochul leading by 20 points. Blakeman has already begun hedging in case his polling is off, irresponsibly suggesting that Democrats will somehow rig the election in November, saying at a press conference, “Do I think they’re going to try and cheat? Yeah, but we’ll stop them.”

The Hochul campaign dismissed Blakeman’s comments, saying in a statement, “When Bruce Blakeman says he’s running for governor to bring ‘Trump-style leadership to Albany,’ this is what he means—first campaigning with January 6th architects, now embracing Trump’s election denial lies.” Furthermore, the Hochul campaign believes they are in a strong position to win reelection; check out their new memo. The briefer highlights Hochul’s strong fundraising advantage and extensive ground game, including opening more than 20 offices statewide, hiring more than 50 organizers, a paid internship program, and a sophisticated field operation that has been knocking on doors since the spring. The memo concludes with, “Governor Hochul’s early investments in organizing infrastructure, financial firepower, and GOP accountability are laying the foundation for a big win—not only for this campaign, but for Democrats up and down the ballot.” Likely right, but we still expect the race to narrow before November.

 -Jack O’Donnell

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