A view of the New York State Capitol building from the Washington Avenue side on March 4, 2026.
A view of the New York State Capitol building from the Washington Avenue side on March 4, 2026.
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Why Kathy Hochul's NY state budget deal fell apart and what comes next

New York Gov. Kathy Hochul’s rush to announce a state budget deal this week underscored a worsening power struggle between the governor and Legislature.

On Thursday, May 7, Hochul said a $268 billion budget deal had been struck with legislative leaders. The night before Hochul announced they “got it done,” however, Assembly Speaker Carl Heastie said he cautioned the governor from making anything official just yet as he told reporters the next day there were still top issues in need of some ironing out.

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And while Senate Majority Leader Andrea Stewart-Cousins has been quiet on Thursday’s happenings, Senate Deputy Leader Michael Gianaris also shared with reporters a deal has yet to be made.

So how did this unraveling happen? Blair Horner, New York Public Interest Research Group senior policy advisor, says it’s a tactic the governor uses to “propel the Legislature forward.”

“Nobody’s in the room except the small number of people and so you don’t really know what the hell’s going on,” Horner said. “But in terms of this case, I think it was a way for the governor to push the Legislature. Both conferences weren’t ready for it, apparently.”

Here’s a look inside the ongoing state budget battle.

Opaque New York state budget process is not new

New York’s state budget discussions are known for being secretive and featuring uneven representation as they mostly happen behind closed doors and focus mainly on policy measures the governor wants to see implemented.

It’s a process the state’s Republican lawmakers historically haven’t been happy with, but now some top Democrats are starting to make some noise about how much power the governor has over the process as well.

In response to what happened at the state Capitol on Thursday, state government watchdog group Reinvent Albany said it’s a continuation of Hochul’s “undemocratic trend of putting all the big policy decisions in the extremely secretive, Governor-dominated budget process.”

“All governors have done what Hochul is doing — unfortunately, the political price for a late budget seems to be decreasing,” the statement continued.

In response to a request for comment, Hochul’s office pointed to the governor’s prior comments, including her budget announcement this morning where she said all parties had come to a “general agreement.”

A possible solution would be to make changes to Silver v. Pataki, or two cases decided in the Court of Appeals at the same time in 2004 that gave the governor increased power over the state budget process, which would require a constitutional amendment. But, Horner says, in order for change to happen, a proposal has to be brought forward.

“If they were gonna do anything, they’d have to do it this year,” Horner said. “If you wait until next year, the fastest it could happen would be November (2029).”

So what does this all mean?

The can is essentially kicked further down the road. Certain hot button items such as Tier 6 state pension system reforms, healthcare specifics and what the pied-á-terre tax on New York City second homes will look like are still open-ended.

However, budget bills still could be passed next week, Horner noted. And as for the current strain between the executive and the legislative leaders, only time will tell what comes of it.

“I think there’s always this tension between the legislative and executive branches,” Horner said. “It’s baked into the system. And what exacerbates it is when the current governor does what she’s doing, which is to basically hold a budget hostage.”

“The most likely scenario is that the session ends, everybody’s unhappy,” Horner added. “They get on the campaign trail, elections happen in November. People are not still thrilled about it, but enough time has passed that time heals all wounds.”

Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers’ taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.

This article originally appeared on Rockland/Westchester Journal News: Why Kathy Hochul’s NY state budget deal fell apart and what comes next

Reporting by Emily Barnes, New York State Team / Rockland/Westchester Journal News

USA TODAY Network via Reuters Connect

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