Hochul's Handouts

NY Refunds?, Governor's Race Heats Up, Micron Seals the Deal

Author

Jack O’Donnell
December 16, 2024

Good morning from Buffalo, New York.

Governor Kathy Hochul’s annual State of the State address will be delivered Tuesday, January 14th, kicking off the 2025 legislative and budget season. Significantly, she will be speaking at the Hart Theater in the Egg at Empire Plaza rather than the Assembly Chamber, as is tradition. 

In a sign that day is near, Hochul also unveiled her first State of the State proposal: an inflation rebate for roughly 8.6 million New Yorkers. The money will be funded by “excess sales tax revenue driven by inflation” according to the Executive Chamber, providing a payment of $300 to single taxpayers who make up to $150,000 per year and a payment of $500 to joint filers making up to $300,000. Hochul indicated this proposal will be part of a larger focus on addressing the affordability concerns of New Yorkers saying, “Because of inflation, New York has generated unprecedented revenues through the sales tax—now, we're returning that cash back to middle class families. My agenda for the coming year will be laser-focused on putting money back in your pockets, and that starts with proposing Inflation Refund checks of up to $500 to help millions of hard-working New Yorkers. It's simple: the cost of living is still too damn high, and New Yorkers deserve a break.” If passed by her colleagues in the Legislature, payments are expected to be made in the Fall of 2025. 

Poll: Hochul's Favorability Up a Little; Affordability Still Voters' Top Issue

While the inflation refund is aimed at increasing affordability, Hochul is also looking for her own political rebate. A recent Siena College poll found her approval rating has risen 3 points, but 57% of respondents still prefer “someone else” as governor. According to the survey, Hochul’s decision to “unpause” congestion pricing is opposed by a majority of voters, with only 29% approving of the plan. On another major issue, 54% of respondents said New York should assist President-elect Trump’s plans to deport migrants living here illegally. The silver lining for Hochul is that her polling is trending in the right direction. Her favorability rating has approved for the second time in a row, climbing back to net -10 compared to net -20 in September. Still, prospective Primary and General Election challengers are taking notice of Hochul’s vulnerability. Ritchie Torres, who is publicly entertaining a primary bid against Hochul, said, “These are the abysmal numbers of an abysmal governor in grave danger of losing the governorship. Governor Hochul, who is an unusually unpopular incumbent, has a ceiling whereas I have a floor. I have massive growth potential, and should I choose to run, I will have the war chest required to share my personal story and communicate my message to New Yorkers. Better to be a rising star than a failing incumbent.” That said, the same poll found that 60% of respondents “don’t know” or have “no opinion” of the third-term Congressman. Torres maintains an $11 million war chest which would be allowed to be transferred to a gubernatorial campaign. 

Rep. Adriano Espaillat (D-NY), the newly elected chair of the Congressional Hispanic Caucus, made it clear he is on Team Hochul, tweeting, “[Hochul] has delivered time and time again for my district and communities across New York. Safeguarding our rights and protecting our freedoms, as the first female Governor of New York State, I cannot think of a stronger, more dedicated leader and champion for all New Yorkers.” Espaillat has been a close ally of Hochul, even bringing her as his guest to President Biden’s State of the Union address earlier this year, but a lot can change between now and 2026.

Espaillat on X: Proud to welcome Governor Hochul as my guest to the State of the Union to support President Biden’s bright vision for the future.

In the 2021 New York City mayoral race, Espaillat originally endorsed Scott Stringer before jumping ship to support Eric Adams.

Hochul also faces the specter of a General Election: Republican Rep. Mike Lawler is looking to improve on former Rep. Lee Zeldin’s performance in 2022 where he came within 6 points of defeating Hochul, despite Democrats hefty enrollment advantage in the State. Lawler has not formally declared his candidacy, but routinely attacks Hochul in the media, recently offering, “Two things are clear: New Yorkers are looking for change and Kathy Hochul is the most unpopular and ineffective governor in America.”

Hochul travels to rival's turf and attacks critics of MTA's congestion pricing plan.

Gov. Kathy Hochul visited Garrison to tout renovations at a Metro-North station and answer critics of her support for a $9 Manhattan toll on drivers.

Hochul has largely stayed above the fray when it comes to engaging with Lawler, but recently traveled to his district to push back on the Congressman’s attacks over congestion pricing saying, “There are some people, elected officials, who do not believe in investing in public transit. Yes, sad but true. Those who want to play political games with our transportation future, instead of ensuring we have reliable service, I have a simple message: Look at the facts, look at the investments, look at the results.” 

Lawler also has some work to do in order to introduce himself to New Yorkers, too. Like Torres, 60% of voters “don’t know” or have “no opinion” of Lawler, a metric he will need to improve on if he is to mount a serious challenge to Hochul. 

In welcome news for New York, Micron, the only microchip and semiconductor manufacturer based in the U.S., has officially signed a deal with the federal government to build chip fabrication plants in Clay, New York. The final agreement makes Micron eligible for $4.6 billion in federal assistance for their New York operation, with another $5 billion in state and local incentives. Chuck Schumer was the driving force behind New York being selected for significant federal funding and believes the project will spur additional investment across the I-90 corridor. Schumer offered, “This final award locks in the federal investment Micron needs for shovels to be able to hit the ground and create thousands of good-paying jobs here in Upstate New York” and also added, “About a quarter of all chips made in America will be made within a few miles from I-90 from Buffalo all the way to Albany through Rochester, Syracuse, Utica.” The funding was made available as part of President Biden’s CHIPs and Science Act, and officials were eager to get a final deal ironed out before President-elect Trump returns to the White House in January. 

That said, an assist on the deal goes to Hochul, Senator Jeremy Cooney, and Assembly Member Al Stirpe for New York’s Green Jobs Act. In the face of tough opposition, they got a state program done and Micron would not be in New York without it.

You Decide with Errol Louis

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Congratulations also to Senator Cooney and Assembly Member Jennifer Rajkumar on the launch of the New York State Asian American and Pacific Islander Commission. The AAPI community is the fastest growing population in New York and the nation and this commission will be responsible for making policy recommendations to improve the quality of life of Asian New Yorkers across the State. Much more to come on this.

The Executive Chamber has been busy deciding on hundreds of bills that passed both the Senate and Assembly. Governor Hochul signed legislation to cap the out-of-pocket cost for EpiPens at $100, as well as a bill to expand the State’s excess food scrap recycling program. Hochul vetoed a number of bills as well, including a transparency measure that would require the State Comptroller’s Office to review state contracts signed during an emergency declaration.

The bill was a priority for State Comptroller Tom DiNapoli, who said in a statement, “I am very disappointed the Governor vetoed our bill requiring more transparency and accountability for billions in emergency contracts and those that bypass routine oversight. Without public disclosure of how taxpayer money is being used, it raises questions about whether the public is getting the best value for its money.” There are still plenty of bills that have not yet been decided on, including the Fashion Workers Act, the Grieving Families Act, and a bill to extend the State’s prevailing wage requirements to Brownfield remediation projects. 

Andrea Stewart-Cousins Reelected as New York State Senate Majority Leader

As the 2025 Legislative Session approaches in Albany, there will be familiar faces atop Senate and Assembly leadership posts. Senator Andrea Stewart-Cousins was reelected to serve as Senate Majority Leader and President Pro-Temp, a position she has held since 2019. Senator Mike Gianaris will remain as Deputy Majority Leader while Senator Jose Serrano will continue as Chair of the Majority Conference. In the Assembly, Carl Heastie was reelected to serve as Assembly Speaker, marking a full decade since he took over for former Speaker Sheldon Silver who was arrested on federal corruption charges in 2015. 

Heastie to Tap Pretlow for Powerful Budget Committee

Longtime Assembly Member Gary Pretlow would chair the influential Ways and Means Committee.

In actual news, Heastie will name Assembly Member Gary Pretlow as the new chair of the powerful Ways and Means Committee. Pretlow will replace Assembly Member Helene Weinstein, who is retiring at the end of the year. Committee assignments are not official until Heastie is formally reelected as Speaker on Jan. 8th, but the budget season is in swing and it was important to have this committee up and running. Pretlow is one of the more senior members of the Assembly, having first been elected in 1992.

Pretlow’s selection means the Racing and Wagering Committee Chair seat is open, as are other important committees, including Tourism, Mental Health, and Higher Education.

In Washington, D.C., the GOP House Steering Committee met last week to fill many of the coveted committee chairs. Rep. Brian Mast (R-FL) defeated Reps. Darrell Issa (R-CA), Ann Wagner (R-MO), and Joe Wilson (R-SC) in a four-way contest to replace outgoing Foreign Affairs Committee Chairman Michael McCaul (R-TX). Rep. French Hill (R-AR) will be the new chair of the Financial Services Committee, replacing loyal McCarthy deputy Rep. Patrick Henry (R-N.C.). On the Energy and Commerce Committee, Rep. Brett Guthrie (R-KY) beat out Rep. Bob Latta (R-OH) to replace Rep. Cathy McMorris Rodgers (R-WA), who did not seek reelection. 

Inside How Johnson Handled Steering and What it Means for the Pitfalls Ahead

Johnson made it clear to lawmakers that he wasn’t trying to put his thumb on the scale for anyone.

Congress has until the end of the week to pass a short-term continuing resolution (CR) or risk a government shutdown. Both Democrats and Republican lawmakers are resigned to the fact that a CR is inevitable, but disagreements remain over what should be included and how long it should last. The White House has requested more than $100 billion for the Small Business Administration’s (SBA) disaster relief program and the Federal Emergency Management Agency (FEMA), and Republicans have expressed an interest in considering Biden’s request, with House Appropriations Chair Tom Cole (R-Okla.) offering, “I’ve said before, they’re very robust. I think they should be. I think we have real disaster.” Cole later clarified that he is “not interested in extra money for programs that are not disaster-related, and there’s some of that in the president’s proposal.” Some Republicans have floated passing disaster relief as a standalone bill, but given the time crunch and thin margins, the CR is likely the only viable avenue for getting disaster relief passed. 

Speaker Mike Johnson is pursuing a CR that runs through March, though some of his GOP colleagues in both chambers would like to see a more abbreviated timeline, citing concerns that Congress will spend too much of Trump’s first 100 days wrapping up the business of the last Congress. House Budget Committee Chair Jodey Arrington (R-Texas) said, “My opinion is we should—we should resolve that now, tie a bow on it, not saddle President Trump with it, and certainly don’t distract reconciliation, which is our greatest opportunity to change course on policy, with last fiscal year’s discretionary budget.” There are also concerns from defense-hawks on the right that keeping defense funding flat through March of 2025 could negatively impact military readiness. Either way, Johnson will likely need Democratic votes to advance a CR out of the House. 

Looking ahead to next Congress, it is clear that the GOP plans to use their trifecta to pursue a process known as “reconciliation” to sidestep Democrats and advance Trump’s priorities. Under normal Senate rules, three-fifths of Senators must agree to bring a matter to the floor for a full vote, and the GOP’s 53 seats leaves them well short of that benchmark without Democratic help. Rather than negotiate bipartisan compromises, Republicans have said they will move forward with reconciliation which only requires a simple majority. There are, however, a number of limitations on what exactly can be advanced through reconciliation. Named after former Sen. Robert C. Byrd (D-W.Va.) in 1990, the “Byrd Rule” prevents the process from being used for legislation that changes outlays or revenues, increases the deficit for a fiscal year beyond the budget window (generally ten years), or affects Social Security. 

Understanding the Byrd Rule

Still, Republicans feel confident they can advance major legislation next year without running askew of the Byrd Rule. The biggest question within the GOP conference is whether to link all of their top priorities into a single package, or to split the major issues across two, smaller bills. Incoming Senate Majority Leader John Thune would prefer the latter, telling reporters, “In my view, it makes sense to move quickly on things we know we can do quickly—border, defense, energy, and then come back with another package that would address some of the savings that can be achieved through reductions in cost in various agencies and bureaucracies and government programs and then also deal with the expiring Trump tax cuts in a package later this year.” Ways and Means Committee Chair Jason Smith (R-Mo.) is skeptical that they can advance a second, tax-focused bill without risking a lapse in the 2017 tax cuts that expire next year offering, “People above me will make the decision, but I’m telling you: I know how to get votes. I’ve been very successful getting votes. I know the House on tax policy better than anyone else. If they want to give me the best opportunity to pass the president’s tax plan, make it all in one bill.” Trump seemingly endorsed the two-bill plan, saying in an interview last week with NBC’s Kristen Welker, “We have a lot of other things. I have tax cuts. You know, we’ll be submitting in either the first or second package to Congress the extension of the tax cuts.” Democrats will be largely powerless to stop the reconciliation process, but could try to peel away GOP support in the House if a second reconciliation bill has a major impact on the deficit. 

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“In my view, it makes sense to move quickly on things we know we can do quickly—border, defense, energy, and then come back with another package that would address some of the savings that can be achieved through reductions in cost in various agencies and bureaucracies and government programs and then also deal with the expiring Trump tax cuts in a package later this year.”

Incoming Senate Majority Leader John Thune

Congratulations to our Washington colleagues, Winning Strategies Washington’s Chelsey Hickman and Mike Merola, recognized by The Hill as Top Lobbyists for 2024! We’re proud to partner with these effective advocates and the entire WSW team who deliver results for the clients and causes they represent on Capitol Hill and before the Federal Government. Well done!

Finally. . .

The Monday Morning Memo will be off on December 23rd and December 30th as the O’Donnell & Associates team enjoys some time with family and friends and prepares for a hectic 2025.

We wish you and your family a happy Christmas and offer our best wishes for a healthy and happy New Year. 

We will be back in your inbox on January 6th with all the latest news from Albany and Washington! 

🎙️Can NYC’s housing program work Upstate?

🎙️Will some NY businesses have to pay to address climate change?

🎙️Why is Gov. Hochul reversing course on school aid cuts?

🎙️Will D.C. Democrats have any clout next year?

OD&A in the News

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Another candidate, Buffalo Common Councilman Rasheed Wyatt, has entered the race for Buffalo mayor. Jack weighs in with News 4 Buffalo.

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New to the NYS Legislature

Chris Ryan, Senator-elect for the 50th Senate District, is a lifelong resident of Central New York with deep roots in Onondaga County. Committed to serving his community, Chris has dedicated his career to advocating for working families, promoting job training, and strengthening union protections. As Minority Leader in the Onondaga County Legislature and President of the Communications Workers of America Local 1123, he has championed initiatives supporting workforce development and good-paying union jobs.

Chris’s commitment to Central New York is shaped by his family ties and his role as a father of four. Married to Erin Ryan, a local educator, he understands the importance of community-focused policies, particularly around expanding childcare options for families across New York State. Before joining the County Legislature, Chris served on the Geddes Town Board, building a foundation in public service that continues to drive his legislative priorities.

As he steps into office, Chris is dedicated to bringing his passion for worker rights, family support, and job training to Albany, where he will work tirelessly to enhance opportunities and strengthen protections for the people of District 50, which includes Onondaga and parts of Cayuga County. 

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This Day in History

Boston, Province of Massachusetts Bay, British America

December 16, 1773: The Boston Tea Party. American colonists disguised as Mohawk Indians threw 342 chests of tea belonging to the British East India Company into Boston Harbor to protest a tax on tea.

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