Kathy Hochul Is Committed to New York’s Billionaires

In the 2023 New York budget fight, Governor Kathy Hochul is relying on billionaires like Michael Bloomberg to try to build support for an austerity budget — rather than listening to wildly popular left-wing demands to tax the rich.

New York governor Kathy Hochul speaks in Times Square on March 20, 2023, in New York City. (Alexi Rosenfeld / Getty Images)

It’s budget season in New York State, the third-largest and third-richest state in the country, and there is much at stake. The fiscal year 2024 budget is estimated to be one of the more generous per-capita budgets in the United States (falling behind the District of Columbia, Alaska, and Wyoming). This budget year is pivotal in New York and beyond because states cannot rely on continued influxes of federal money to plug the gap between needs and revenues and must deal with problems of inflation, post-COVID recovery, and high economic uncertainty in the face of failing financial institutions and resulting instability.

Advocates, organizers, and activists have pushed for years for a just budget that reflects the unmet needs of working New Yorkers, seeking greater spending on climate, childcare, education, and protections for workers and social services, while seeking to raise taxes on the very wealthy and curb corporate giveaways.

Kathy Hochul, in her first budget negotiations as the first elected female governor of New York (a race that was far closer than it should have been), now finds herself in a difficult position. Her electoral coattails were weak and unable to secure electoral victories in areas previously won by Joe Biden, effectively handing over control of the US Congress to the Republicans as a result of four tight House races. Her attempt to railroad the nomination of an unpopular judge as the New York State Court of Appeals chief judge — over the protests of unions, abortion advocates, and criminal justice reformers — was a humiliating defeat. And now, she is pushing an austerity budget that clings to a neoliberal commitment to “not raise income taxes” while simultaneously increasing costs on students, families, commuters, and other working New Yorkers through increased fares, fees, tuition, and cuts, while prioritizing subsidies for corporations.

In addition, her budget only includes a watered down version of the Build Public Renewables Act, a bill that would allow the New York Power Authority to build out publicly owned solar and wind energy, with union labor and provisions for a just transition for fossil fuel workers. (Hochul’s version does not include union protections.) Because of the strength of the budget justice coalition, the New York State Assembly and Senate have pushed forward more progressive budgets that create more revenue through increases on taxes on the wealthiest, with stronger labor-centric climate provisions (although not without problems).

Hochul has a lot to worry about. The progressive taxation and spending priorities of the broader “Tax the Rich” coalition is extremely popular with New Yorkers. According to a March 20, 2023, Hart Research poll, over 80 percent of all voters support taxing the income of the rich and greater corporate taxes, including high support from Republican and unaffiliated voters. Respondents do not support public university tuition or fare increases, at five-to-one margins.

A more equitable tax system and stopping de facto tax increases on working-class people is far more popular than Kathy Hochul’s electoral victory (she won with 53.2 percent of the vote to Lee Zeldin’s 46.8 percent). Currently, a billboard over a major highway in Albany mocks Kathy Hochul’s marginal victory, claiming, “More New Yorkers want to Build Public Renewables than voted for Kathy Hochul,” a reference to a Data for Progress poll showing that 63 percent of New Yorkers supported this publicly owned, union-centered green energy bill, of which Hochul has only included a watered-down version in her own budget.

Since the release of her hundred-fifty-page “New York Dream” executive budget document, Governor Hochul has faced increasing criticism for her budget proposal from a range of figures in her own party and governing coalition. Perhaps recognizing the weakness of her position as a barely reelected executive without a strong governing mandate, a mysterious television ad starting playing in primetime slots, extolling the virtues of Hochul’s budget as sensible, avoiding taxes, and meeting New Yorkers’ needs, especially relating to affordability and childcare costs. There was little information about the funding for this ad, besides the name of a mysterious organization, “American Opportunity,” which announced this ad and mailer campaign on March 13, 2023.

Speculation about the dark money group ensued, with the Times Union suggesting a tie to the Democratic Governors Association. But the connection was not clear. All of this dark money spending occurred despite Hochul’s promise to usher in a new era of ethics and transparency in state government following her 2021 inauguration.

On March 22, the New York Times broke the story that the $5 million in seed money for American Opportunity came from New York’s own socialism-bashing, centrist billionaire former mayor, Michael Bloomberg. A tax-the-rich campaign pushed by a coalition of progressives and socialists has apparently been so successful that one of the wealthiest men in the country feels the need to spend millions to shore up a weak Democratic governor’s attempt to hold the line against tax increases on wealthy figures like him.

The budget fight is now in its final stages. New York State must have a budget passed by April 1, as stated in its constitution, although in 2022, Hochul passed its budget nine days late due to state leaders’ inability to reach an agreement. The final details of the New York state budget are decided behind closed doors by “three men in a room” (the leaders of the assembly, senate, and the governor engaging in final closed door negotiations, which is now “two women and a man in a room”).

The outrage of the Bloomberg dark money funding will likely create more constituent demands for the legislature to fight Hochul’s budget. The fact that Hochul is accountable to billionaires and not regular New Yorkers reinforces all the problems that Hochul has faced since her bumbling general election campaign: a commitment to Third Way Democratic Party politics that allow the rich to get richer while continuing to hurt workers is neither popular, effective, nor democratically defensible.

While Hochul worked hard to contrast herself with her predecessor Andrew Cuomo, her budget and budget-passing strategies show that she isn’t substantively different from him. She is working to ensure that New York remains a playground for corporations and the wealthy. Despite what ultrawealthy donors may tell her, it’s a recipe for a failed governorship, continued failures for the Democratic party, and a disaster for the working people of New York.