Nothing like a check in the mail from the government to make you feel all warm and fuzzy about the ruling party.
And who doesn’t like to give away $3 billion?
Gov. Kathy Hochul hopes to change the narrative on the high cost of living in New York. Buoyed by the state’s healthy economy, the state expects a sales tax bonanza by the end of the fiscal year in March.
The Buffalo Democrat wants to share $3 billion with 8.6 million New York taxpayers, individuals earning up to $150,000 a year and couples filing a joint tax return with a total income up to $300,000.
“I want to make sure it gets directly back in the hands of New Yorkers in a way that they feel,” Hochul said at an event in the Bronx on Dec. 9. “This is something I want them to know is tangible. This is your money.”
As Hochul hopes to find a place for the $3-billion program in the state budget, her administration has yet to decide how the governor’s name, image and likeness will displayed on the checks. Also to be decided is how the deal gets done.
Does Hochul do it electronically with the state’s finance system? Or does Hochul go old school, issuing 8.6 million checks that are sent via the US Postal Service at 54 cents per letter?
Hochul giveaway announced weeks before congestion pricing begins
She announced the giveway just a month before the debut of the state’s congestion pricing program in Manhattan, with the tolls for travel south of 60th Street about to hit the wallets of Hudson Valley consumers fatigued by lingering inflation.
Hochul’s giveaway drew skepticism and derision from economists and government watchdogs. A few leading Lower Hudson Valley state legislators have taken a wait-and-see attitude.
Meanwhile, state public-worker unions officials and social service agency executives have lavished praise on her proposed $3-billion giveaway.
More: Thousands of Hudson Valley seniors miss full tax savings from Enhanced STAR program
Hochul’s rebates to 8.6 million New York taxpayers would come from state coffers flush with rising sales-tax revenues from the humming New York economy, fueled in part by inflated prices. Hochul said state reserves are at 15%, up from 4% when she became governor three years ago.
Hochul estimates 986,000 Hudson Valley taxpayers would land refund checks, according to the governor’s press release.
“I’m saying enough is enough,” said Hochul. “Let’s give it back to them. They didn’t ask for inflation.”
Hochul’s “Inflation Refunds” would arrive in the fall of 2025 during an off-year election with some local races on the ballot.
The payments are modest. There’s $300 for single taxpayers, like me, who make up to $150,000 a year. It would be $500 for couples making up to $300,000.
It would cover one month of my new used car payment. Or less than the cost of filling up my half-full heating oil tank last week.
Gov. Kathy Hochul on Dec. 9, 2024 announced a $3 billion plan to send New Yorkers “inflation refund” checks of up to $500 per household as the first preview of proposals she’ll make in her annual State of the State speech on Jan. 14.
One Hochul critic: ‘It’s the tiramisu of awful public policy’
Economist Mark Weinstock said Hochul’s plan could actually bring inflationary pressures into the New York economy with the infusion of $3 billion to New Yorkers already dealing with the high cost of housing, energy, and public education in the state.
Then there’s the $9-a-day charge to motorists driving south of 60th Street in Manhattan, set for launch in early January.
“It’s very cynical,” said Weinstock, a clinical associate professor of economics at Pace University. “After the election, she wants to give money back so people will remember the check instead of the extra expenses she is creating.”
Hochul denied the plan would drive up prices.
Ken Girardin, director of research at the conservative Empire Center for Public Policy in Albany, acknowledged the sweetness of a plump government check arriving in one’s mailbox. But he criticized what he called the fiscal gimmickry intended to engender good feelings toward the governor.
“It’s the tiramisu of awful public policy,” said Girardin, alluding to the sweet rum-laced dessert. “It’s a sordid tradition in New York of elected officials wanting gratitude. We may have strong sales tax growth, but Medicaid and school aid costs are out of control.”
Girardin said that $3 billion was a significant chunk of state tax income, with the state operations budget for 2024 at $128 billion. He’d rather see the $3 billion used to cut the state tax on health insurance or to pay down state debt.
Melinda Person, president of New York State United Teachers, hypothesized that Hochul’s $300 check would help level the the economic playing field between the rich and poor.
“We just seek out solutions that address the ever-increasing gap in income and wealth between the super-rich and the rest of us, and this proposal is a good first step,” said Person.
The union representing state workers is also all on-board with Hochul’s plan.
“Governor Hochul’s proposal for a new Inflation Refund represents the kind of thinking we need to help make it easier for New Yorkers to live, work, and raise a family in our state,” said NYS Public Employees Federation President Wayne Spence.
Refund checks Hochul’s opening salvo for 2025 budget talks
Hochul on Monday announced the proposal as her opening salvo in Albany’s 2025 budget battle, which will begin in earnest when Hochul unveils her spending plan in January.
“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 too damn high and New Yorkers deserve a break.”
She joins a string of recent New York governors who have embraced the check-in-the-mail strategy on state fiscal policy.
More: Latimer’s 2025 budget plan hikes property taxes 2% when you add sewer, water, refuse taxes
Gov. David Paterson began the transformation of the state’s STAR property-tax rebate program by sending checks to some STAR recipients during the late 2000s. Those checks have continued under Andrew Cuomo and now Hochul, with some checks issued in 2024 as bountiful as $5,000 for those in the Enhanced STAR program.
Paulin withholding judgement, while Lawler isn’t waiting
State Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, declined comment through her spokesman Mike Murphy, who said the leader needed more time to study it.
Assembly member Amy Paulin, D-New Rochelle, wants to see Gov. Kathy Hochul’s state budget proposal before embracing her $3 billion Inflation Refund program
Assemblywoman Amy Paulin, D-New Rochelle, said that she was not opposed to improving the financial standing of New Yorkers with the state rebate. But she said it’s too early to back the check program before Hochul unveils her 2025 budget plan, including proposals for aid to the powerful education and health care sectors.
Paulin noted that New York helped fund its growing Medicaid program in 2024 with a new tax on managed care programs. She said that tax may not survive the return of Donald Trump to the Oval Office.
“I want to first see what she proposes to fund our schools and hospitals,” said Paulin, who chairs the Assembly Health Committee. “Trump may take away that tax. If the governor has a crystal ball as to what the federal government is planning, that’s great. But I’m worried. And as much as I want to give back, I want to make sure we’re not cutting off our nose to spite our face.”
Small said Hochul’s 2025 budget will maintain the current foundation aid formula, and not remove the hold-harmless payments, as recommended by the recent Rockefeller Foundation report.
“Governor Hochul has delivered more funding for public schools than any governor in state history, adn she’s committed to continuing that support,” said Small.
Rep. Mike Lawler, Republican candidate for the 17th Congressional District, speaks at a get-out-the-vote rally Oct. 31, 2024 at the Rockland Republican campaign office in New City.
Hochul’s tax giveaway has also drawn the criticism of Rep. Mike Lawler, R-Pearl River, who recently won re-election and has continued to rail against Hochul’s congestion pricing plan in Manhattan. Lawler has been touted as a possible gubernatorial candidate in 2026.
“Taking thousands of dollars out of New Yorkers’ left pocket and then putting $500 in their right pocket isn’t a tax cut, it’s an insult,” said Lawler on the social media platform, X. “And it’s precisely why millions of New Yorkers have headed for the exits. Doing the same to commuters with her congestion pricing cash grab and then ‘only’ charging them $2500 isn’t a savings, it’s a scam.”
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David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at dwilson3@lohud.com.
This article originally appeared on Rockland/Westchester Journal News: Hochul’s $3B NY ‘Inflation Refund’ plan called cynical ploy by some