By New York Post (Opinion) | Created at 2025-01-22 00:14:02 | Updated at 2025-01-24 09:58:19
2 days ago
If insanity is doing the same thing over again and expecting a different result, then Gov. Kathy Hochul belongs in the loony bin. After years of runaway spending and massive deficits in Albany, her fiscal year 2026 budget is more of the same. Actually, it’s doubling down on failure.
The budget is a whopping $252 billion, up about $9 billion from the year before, as Hochul advocates for even more government spending and more “redistribution” — a euphemism for confiscating income and giving it to someone who didn’t earn it.
The governor’s office cites increased Medicaid spending as a key driver of the growth in outlays and treats it like a foregone conclusion, but that’s not true.
New York’s decision to participate in Medicaid expansion increased costs to taxpayers, but the program doesn’t produce a comparable increase in care providers, nor in care delivered to patients — which is why states like Texas have thus far declined to participate in the expansion.
But Hochul clearly hasn’t learned from past mistakes, because the budget is filled with plenty of new ones too.
For example, she wants $21 billion in a rainy-day fund when the state is already drowning in over $180 billion of debt. Imagine being neck-deep in credit-card debt and deciding you’re going to stockpile cash for a rainy day instead of paying down the outstanding balance. Apparently, the governor doesn’t realize that the rainy day is already here — and it’s pouring.
The proposed budget also calls for extending the current “temporary” tax increase, a move I predicted in 2021. These higher tax rates are a key reason why New York is hemorrhaging people at an alarming rate — the fastest rate, in fact, of any state. Like the federal government, New York doesn’t have a revenue problem, it has a spending problem.
But if Hochul really wanted to increase tax receipts, she’d allow energy exploration and exportation. New York state is sitting on a gold mine of natural gas — the cleanest burning fuel available — but the state government has made it almost impossible to get it out of the ground.
Conversely, states like Texas are awash in tax revenue from energy companies because the Lone Star State has reasonable regulations that protect residents and the environment, while keeping energy production profitable.
To add insult to injury, Hochul’s proposed budget also costs taxpayers more than $1 billion in failed “green” energy “investments” that have negative real returns.
The bad ideas don’t stop there with nearly $2 billion allocated to programs advertised as increasing homeownership affordability, which none of those efforts will achieve.
For example, by giving $100 million to potential homebuyers, Hochul will be subsidizing demand, as folks have more cash to bid up the price of homes. It’s Econ 101 that when you increase demand, you put upward pressure on prices.
Even the apparent supply-side subsidies will fail to have a positive impact because they’re just a shell game. Much of the government spending that gets labeled as money for building affordable homes is really just transferring resources from the private to the public sector.
In other words, the government buys construction materials and builds homes — less efficiently than private companies, of course — and now those resources aren’t available for private homebuilders. The net effect on housing is at best zero.
If Hochul really wanted to increase homeownership affordability, she’d start cutting red tape that makes it impossible for homebuilders to bring additional supply to the market. Of course, such an idea is conspicuously absent from her proposed budget.
Instead, she dispenses crumbs to taxpayers (with great magnanimity) while the bureaucrats feast on pork-barrel spending.
New York couples making less than $300,000 would receive a mere $500 in “inflation refunds” while single filers earning less than $150,000 would get just $300. After inflation raised the annual cost of living by thousands of dollars, a one-time payment of a few hundred is chump change.
And while the budget reduces the tax rate in some brackets, middle-class New Yorkers would still face one of the highest tax liabilities in the nation — and the average combined state and local income tax rate for all New Yorkers would remain near 15%.
Furthermore, this is just robbing Peter to pay Paul — Hochul’s budget proposes taxing some citizens more to “redistribute” that tax revenue to others under the guise of tax relief.
In short, Hochul is pushing more of the same: more wasteful government spending, more class warfare under the guise of redistribution, and more failed policies that never achieve their stated objectives. It’s insane to think the results will somehow be different this time.
E.J. Antoni, a public finance economist, is the Richard F. Aster fellow at the Heritage Foundation and a senior fellow at Unleash Prosperity.
