Hochul’s $252 Billion Budget Recklessly Wastes Taxpayer Funds

If repeating the same actions and anticipating different outcomes is madness, then Governor Kathy Hochul surely fits the bill. Following years of rampant spending and massive deficits in Albany, her fiscal year 2026 budget continues down the same misguided path. In fact, it’s a firm commitment to failure.

The budget is a staggering $252 billion, an increase of about $9 billion from the previous year, as Hochul calls for even more government expenditure and heightened “redistribution” — a term that disguises taking income from earners and reallocating it to those who haven’t worked for it.

The governor’s administration cites rising Medicaid costs as a primary factor behind this spending increase, treating it as an inevitable reality. However, this perspective is misguided.

New York’s decision to engage in Medicaid expansion has escalated taxpayer costs, yet the program fails to generate a proportionate rise in healthcare providers or services delivered to patients — which is why states like Texas have opted out of this expansion thus far.

It’s evident that Hochul has not learned from previous errors, as the budget is replete with numerous new missteps as well.

For instance, she proposes a $21 billion rainy-day fund while the state is already submerged in over $180 billion in debt. Picture being deeply in credit-card debt and deciding instead to stockpile cash for unforeseen circumstances rather than addressing the existing balance. It seems the governor is oblivious to the current storm — and it’s a heavy downpour.

The proposed spending plan also suggests extending the current “temporary” tax hike, a move I foresaw back in 2021. These elevated tax rates are a significant reason New York is experiencing a troubling exodus of residents — the fastest among all states. Like the federal government, New York faces a spending dilemma rather than a revenue shortage.

If Hochul genuinely aimed to boost tax proceeds, she would support energy exploration and exportation. New York is rich in natural gas — the cleanest-burning fuel — yet the government has created near-impossible barriers to its extraction.

In contrast, states like Texas are thriving on tax revenue generated from energy firms, thanks to sensible regulations that safeguard both residents and the environment while keeping the energy sector profitable.

Adding insult to injury, Hochul’s budget proposal further burdens taxpayers by over $1 billion on failed “green” energy “investments” that yield negative returns.

The ill-conceived plans don’t end there, with nearly $2 billion earmarked for initiatives that are promoted as enhancing homeownership affordability—objectives that will likely not be achieved.

For instance, granting $100 million to potential homebuyers simply stimulates demand, allowing buyers to increase their bids on homes. It’s basic economics: when demand rises, prices follow suit.

Even the so-called supply-side incentives are bound to falter because they mask a shell game. Much of the government funding labeled for constructing affordable homes merely redistributes resources from the private sector to the public sector.

In essence, the government purchases building materials and constructs homes — less efficiently than private enterprises can, naturally — and now those resources can’t be utilized by private homebuilders. The overall outcome for housing remains, at best, negligible.

If Hochul truly wanted to make homeownership more affordable, she would eliminate the bureaucratic obstacles that hinder homebuilders from increasing market supply. However, such proposals are glaringly absent from her budget plan.

Instead, she offers meager assistance to taxpayers (with a facade of generosity) while bureaucrats indulge in excessive government spending.

New York couples earning under $300,000 would receive a paltry $500 in “inflation refunds,” while single filers making below $150,000 would only get $300. Given that inflation has escalated the annual cost of living by thousands, these one-off payments are a pittance.

Moreover, although the budget proposes reductions in certain tax brackets, average middle-class New Yorkers would still grapple with some of the highest tax obligations in the nation — and the overall combined state and local income tax rate for all New Yorkers would hover around 15%.

Furthermore, this merely shifts burdens: Hochul’s budget entails taxing some individuals more to “redistribute” that revenue under the guise of tax relief to others.

In summary, Hochul is advocating for the same failed strategies: more wasteful government spending, increased class conflict under the pretense of redistribution, and continued policies that never fulfill their intended goals. It’s irrational to believe the outcomes will somehow change 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.