Gov. Hochul Announces FY 2023 Budget, $2B for Pandemic Recovery

Governor Kathy Hochul, with Division of the Budget Director Robert F. Mujica Jr., recently outlined her Fiscal Year (FY) 2023 Executive Budget. "We have the means to immediately respond to the COVID-19 pandemic as well as embrace this once-in-a-generation opportunity for the future with a historic level of funding that is both socially responsible and fiscally prudent," Governor Hochul said.

What you need to know: The budget allocates $2 billion in state funding for pandemic recovery efforts. In her Tuesday morning address, she didn’t give specifics on how the funds would be used but noted that they could be used to help small landlords and their tenants. "We've set aside $2 billion for pandemic recovery initiatives. And I'll work with the Legislature to identify the most impactful use of these funds in the short term," Hochul said. "Whether that's help for struggling small landlords and their tenants, or the hardest hurt industries and workers, or for other purposes."

The backdrop: The budget proposal comes at a precarious time for renters and owners. New York State’s eviction moratorium ended on Jan. 15.

Governor Hochul has said the Emergency Assistance Rental Program portal, which closed in November after exhausting its $2.4 billion in federal funds, is to reopen. A court ordered that the portal be reactivated, after the Legal Aid Society brought a lawsuit against the closure. The governor said tenants who apply will have their evictions stayed for a short time. Under state law, most tenants who apply for ERAP benefit from a stay in their eviction case while their application is pending.

An Administrative Order issued by New York Chief Administrative Judge Lawrence Marks dated Jan. 16 reminded state courts of this protection. It states, “Eviction matters where there is a pending ERAP application shall be stayed until a final determination of eligibility for rental assistance is issued by the Office of Temporary and Disability Assistance (OTDA), including appeals.”

However, the program itself still lacks funds, despite a request that the federal government shift to New York money from other states that haven’t used their allotment. New York requested nearly $1 billion in additional funding for ERAP from the U.S. Department of the Treasury in November, but just $27 million would be forthcoming in an initial round. The Treasury Department has said that it will be reallocating more as soon as early February.

What’s next: The annual presentation of the proposed budget begins the negotiation process ahead of the April 1 budget deadline. In remarks to reporters, state budget director Robert Mujica said, "There are other coronavirus-related spending items that other people are talking about, but the responsible thing was to set this money aside; let's have the conversation with the Legislature about what the priorities are. But there's nothing that would preclude the use of those funds for ERAP at some point."