Gov. Hochul (photo: Governor's Office)

Governor Kathy Hochul on Tuesday delivered her second State of the State speech, and the first since she was elected to a full term, pledging to tackle crime, boost housing production, advance climate action, and invest heavily in the state’s mental health system to “make New York more affordable, more livable, and safer.”

Speaking in the Assembly chamber at the Capitol building in Albany, Hochul outlined a broad legislative and policy agenda for the year ahead. It was Hochul’s first fully in-person State of the State address, following last year’s speech that came when the Omicron variant of COVID-19 was surging through the state.

“It’s extraordinary how far we've come in this one year from that time when I literally had to address empty seats,” Hochul said to a packed chamber of Assembly members, state senators, executive branch staff, and others. Behind her were seated the state’s other top officials, including Lieutenant Governor Antonio Delgado, who introduced the governor.

Hochul struck an optimistic note in her speech, even as she conceded that challenges lie ahead. “I’m proud to say that the State of our State is strong, but we have work to do,” she said, launching into the highlights of her extensive agenda, covered in more detail in the 277-page policy book released Tuesday that will join with her Executive Budget, due later this month, to form the more full basis of her negotiations with the Legislature.

Public Safety, Bail, & Health
The governor began with a focus on public safety, an issue that her Republican opponent in the 2022 race, then-U.S. Rep. Lee Zeldin, successfully hammered at during the closer-than-expected gubernatorial election last year. “My number one priority has always been and always will be keeping Yorkers safe,” Hochul said. “And a day has not gone by where I've not been laser-focused on this objective.”

While she laid out a multi-pronged public safety agenda, Hochul acknowledged that the most controversial issue in the public safety conversation has been bail reform. As she has before, Hochul said she remains in strong support of the general principle behind the reforms — that people should not have to sit in jail pre-trial just because they are too poor to afford bail — while pleading with Democrats in the Legislature to work with her to improve the law.

“I would say we can agree that the bail reform law as written leaves room for improvement and as leaders we cannot ignore that,” she said. Hochul’s proposal would eliminate the requirement that judges set bail based on the “least restrictive means” for any alleged crime currently bail eligible, while retaining that standard for minor crimes. That change would work in tandem with alterations to bail Hochul insisted on last year, which gave judges more discretion to set bail or hold defendants in jail pre-trial in cases involving gun crimes and repeat offenders accused of various crimes including non-violent felonies and some misdemeanors.

In part to make bail reform more successful, Hochul outlined plans to double funding for alternatives to incarceration to $30 million annually and to triple investments in reentry services to $12 million for those leaving the justice system.

She also pledged the “largest investment ever” in the state Gun Involved Violence Elimination (GIVE) initiative, promised to increase the ranks and resources of the State Police, and to fund the hiring of more prosecutors across the state.

On a related issue, Hochul also promised to make “essential and long overdue” fixes to the state’s mental health system. “We have underinvested in mental health care for so long and allowed the situation to become so dire that it also has become a public safety crisis as well,” she said.

She is proposing a $1 billion investment that will, among other measures, help bring 1,000 inpatient psychiatric beds online, including 150 new beds and 850 that were previously eliminated. Her plan also involves creating 3,500 units of supportive housing, expanded outpatient services, comprehensive wraparound services for discharged patients, expanded mental health services for children, a new interagency task force to tackle the overdose crisis, and legislation to prohibit insurance companies from denying access to mental health services.

“Today marks a reversal in the state's approach to mental health care, and this is a monumental shift to make sure that no one else falls through the cracks,” she said.

After dedicating $20 billion over several years to improve the state’s health care systems, Hochul proposed several additional measures this year regarding broader public health efforts beyond mental health care.

They include a new Commission on the Future of Health Care to study the health care system and recommend reforms, a $1.6 billion capital commitment for health care projects, expanded Medicaid coverage for preventive health services, improvements to the state’s Essential Plan, addressing medical debt, improved access to primary care, a new “nation-leading” health monitoring and surveillance system, and more.

Housing
Perhaps the biggest plan that Hochul presented is her “New York Housing Compact,” a broad policy strategy to create 800,000 units of housing over the next decade. The plan builds on the governor’s $25 billion program to build 100,000 units of affordable housing that was approved in last year’s state budget. The new framework is more focused on leveraging the private market through setting targets, changing zoning, and incentivizing growth so that New York can try to catch up in its housing supply deficit.

“Today, I say no more delay. No more waiting for someone else to fix this problem. Housing is a human right and ensuring enough housing is built is how we protect that right,” she said.

As Hochul noted, while the state created 1.2 million jobs over the last decade, it only built about 400,000 homes, one of the reasons behind the crises of outmigration from the state and a lack of affordability.

“Many forces led to this state of affairs but front and center, our local land use policies that are the most restrictive in the nation,” she said. Her plan includes setting statewide and local targets for housing creation, cutting red tape and expediting environmental review approvals, legalizing basement conversions, easing office conversions, and focusing on transit-oriented development by requiring municipalities to build more housing near MTA stations inside and outside New York City. Under Hochul’s proposal, the state would also offer funding for necessary infrastructure where new housing is built and a fast-track approval process when proposed housing projects are stalled.

Hochul’s housing plan is contingent in part on replacing the expired 421-a housing tax credit. Last year, she proposed an alternative, 485w, which failed to pass the Legislature, and she said she will revisit the issue to restore “this critical piece of the puzzle.” Hochul is not presenting the details of that plan at this time, but starting the conversation with legislators. It is among the various pieces of the housing plan that will require legislative approval and could prove contentious.

Climate and Energy
As New Yorkers experience rising energy bills, Hochul also proposed a new “EmPower Plus” program to help low-income families retrofit their homes with clean heating systems and upgraded insulation and appliances. She also promised $165 million in relief to more than 800,000 utility customers, proposed a plan to end sales of new fossil-fuel-powered heating equipment by 2030, and called for zero-emission construction for small buildings starting in 2025 and for large buildings starting in 2028.

Hochul also announced her support for a new “cap-and-invest” program that will cap greenhouse emissions and require the biggest emissions producers to purchase permits to sell polluting fuels. It marks the adoption of one of the major proposals from the state’s Climate Action Council, which in December released a wide-ranging Scoping Plan of recommendations to meet the emission-reduction and renewable-energy requirements of the state’s 2019 Climate Leadership and Community Protection Act.

Transportation
One of the main challenges the governor, state, and city will face this year is ensuring fiscal stability at the Metropolitan Transportation Authority (MTA), which runs New York City’s subways and buses and the commuter rail network. The agency was hit hard by the pandemic and has floated by on federal aid but faces a fiscal cliff after that aid runs out in 2025. Hochul did not propose solutions in her State of the State but did pledge to work with her partners in government to address it, with perhaps more detail to come in her Executive Budget.

She also further committed to implementing congestion pricing in New York City, which has been delayed but is projected to help the MTA raise billions in funding for its capital plan.

Hochul did propose several other transit-related measures including a low-cost, flat-fare City Ticket available 24/7 for commuter rails within New York City, moving ahead with her proposal for an Interborough Express connecting Brooklyn and Queens by pursuing the "light rail" option for the route, expanding electric vehicle charging infrastructure, Automated Bus Lane Enforcement cameras on 900 New York City buses, stricter driving regulations, stronger DMV enforcement, and allowing New York City to lower its speed limit.

Child Care, Education, and the Minimum Wage
Building on her four-year, $7 billion childcare plan that was approved in last year’s budget, Hochul announced on Tuesday a series of measures to make childcare more affordable and easier to access. They include streamlining applications for childcare assistance, increased income eligibility for child care subsidies, expediting enrollment for families that already receive other public benefits, a new Workforce Retention Grant Program for childcare workers, and a New York State Employer-Supported Child Care pilot program.

And to directly address the rising cost of living, Hochul proposed a plan to peg the minimum wage to inflation, which she said would affect more than 900,000 New Yorkers. “If costs go up, so will wages,” she said.

Hochul is continuing her administration’s efforts to fully fund Foundation Aid for schools, proposing a $2.7 billion or 13 percent increase this year, for a total of more than $24 billion. She also pledged an additional $125 million to continue the state’s expansion of free prekindergarten. She has also proposed investments in high-impact tutoring programs, a $20 million grant program for new early college high school programs, direct acceptance into community colleges for graduating high school seniors, $200 million in funding for SUNY digital infrastructure, among other items.

More
The governor’s speech was by no means exhaustive, hitting on only some of the contents of her State of State policy book, which contains 147 proposals in total covering, besides the aforementioned ideas, other plans related to reproductive rights access, economic development measures, healthcare, making government work better, and more.

In the upcoming weeks, the governor will also present her budget for the next fiscal year, which will contain a series of fiscal and policy measures that will further set the table for hearings by and negotiations with the State Legislature. During her State of the State address, Hochul expressed her dedication to ensure no income tax increases this year.

State Comptroller Tom DiNapoli had some advice for the governor’s budget presentation. “We are now entering the third year of the lingering effects of COVID-19 on our health and economy. As the nation continues to recover from pandemic aftershocks, the state’s fiscal footing is currently stable, but the economy remains uneven, and inflation is still too high,” he said in part in a statement on Tuesday. “To prepare for future risks and uncertainties, rainy day reserve targets should be met, spending plans should be cautious, and prudent debt practices should be restored.”

Other Reactions
Mayor Adams praised the “ambitious agenda” that the governor laid out on Tuesday. “The governor’s proposals on housing, mental illness, and public safety reflect New York City’s priorities and build on the past year of partnership and collaboration between our administrations,” he said, in part, in a statement.

In particular, he pointed to his own plan to build 500,000 homes in New York City over a decade, which will require state assistance. “The governor’s commitment to ensuring that our state finally builds the housing needed to address the affordability crisis is the type of bold leadership we need, and acknowledges that our neighboring suburbs must do much more to solve what is ultimately a regional problem,” he said.

New York City Public Advocate Jumaane Williams, who challenged Hochul in last year's Democratic primary, similarly said the governor’s housing proposals were “encouraging,” though he insisted that new housing should be income-targeted. “If the government is taking steps to encourage responsible development, whether through subsidizing or streamlining, that support should only come in exchange for deeply affordable housing,” he said in a statement.

“Additionally, no housing plan is real without including preservation strategies, and new housing without sufficient tenant protections and foreclosure prevention will not be enough to keep New Yorkers in their homes,” Williams added. “The progressive path forward to address the housing and homelessness crisis in our state is one that puts people over profits, communities over corporations.”

City Comptroller Brad Lander, another Democrat, issued a note of caution. He is among the vocal opponents of 421-a and noted in a report last year that the tax incentive cost the city about $1.8 billion in lost revenue annually. “We need to expand the supply of housing at all income levels—but simply incentivizing market-rate development with another inefficient tax giveaway program like 421a will not solve the crisis of affordability facing so many New Yorkers,” he said in part in a statement. “Building new housing must go along with significantly increased investments in genuinely affordable rental and homeownership programs, rental assistance vouchers, and good cause protections to keep tenants in their homes.”

Hochul’s priorities even reflected those of Republicans, who sit in the minority in both houses of the Legislature. “Today’s State of the State speech by Governor Hochul follows the Senate Republicans’ call for a safer, stronger and more affordable New York,” said State Senator Rob Ortt, the minority leader, in a statement. “While the Governor echoed our themes, she ignored the stark reality that one-party, progressive policies have made New York less safe and less affordable. New Yorkers deserve action that matches the rhetoric.”

Ortt urged the governor to “ignore the hysterics from the progressive left” on bail reform, mental health, housing, and affordability, while also criticizing her other proposals that he said would increase the cost of living in the state. “Touting unachievable energy policies, new mandates on small business and state-driven housing policies will only drive up costs for overburdened New Yorkers, chasing out even more taxpayers and more jobs,” he said.