ALBANY, N.Y. — Gov. Kathy Hochul on Thursday announced that she and state lawmakers had reached an agreement on a roughly $229 billion state budget that included a new round of changes to the state’s bail laws, an increase to the minimum wage and urgent funding for New York City’s transit system.
The deal capped weeks of contentious negotiations that divided the governor and the Democrat-led State Legislature, delaying its expected passage by almost a month — the latest budget in over a decade.
The negotiations pitted Ms. Hochul, a moderate Democrat in her first full term, in an ideological tug of war against a more progressive-minded legislature where Democrats hold supermajorities. The outcome was a mixed bag of modest wins for both sides, bitter bargains and toppled plans.
The governor, who won a narrow election victory last year on a promise to combat crime, clinched one of her top priorities: modifying the state’s bail law to give judges greater discretion to detain people awaiting trial.
But the protracted discussions over the bail law, one of the most politically explosive issues in Albany, took a toll on other policy issues, forcing Ms. Hochul to compromise heavily in order to claim victory.
The governor had sought to eliminate a cap that would allow over 100 new charter schools — which are privately run, but publicly funded — to open in New York City, a proposal that met with a swift backlash from top Democrats, as well as teachers’ unions. In the end, Ms. Hochul accepted to allow 14 new charter schools by reviving so-called “zombie licenses,” or permits awarded to schools that had closed.
Democrats also found common ground on a plan to raise the state’s minimum hourly wage by two dollars to $17, up from $15, by 2026 in New York City, Long Island and Westchester County. It would hit $17 by 2027 in the rest of the state, and future increases statewide would be pegged to inflation.
The move riled Republicans and some business groups who said it would lead to job losses, and upset progressive Democrats and major unions who have clamored for an increase of as high as $21.25, saying the city’s minimum wage would still be lower than other cities, like Seattle and Los Angeles.
It appears that the budget agreement, which still requires a formal vote by the full Legislature next week, will result in a hodgepodge of other Democratic priorities, from a ban on natural gas in new buildings to funding for free meals for school children, to a pilot program to make free five bus routes in the city.
Ms. Hochul announced the deal during an impromptu news conference in the State Capitol on Thursday evening, even as legislative leaders in the Assembly had not yet finished briefing rank-and-file lawmakers on some details of the agreement. Just hours before, Assembly Democrats had sent members home, with an expected return Sunday evening to continue discussing some policy items.
“I know this budget process has taken a little extra time, but our commitment to the future of New York was driving this,” the governor said, adding that the process was, “not a race to a deadline, but a race to the right results.”
Ms. Hochul said she had reached “a conceptual agreement” with lawmakers. Representatives for the Democratic majorities in both chambers said on Thursday night that they had been informed of Ms. Hochul’s announcement beforehand.
The state budget will provide substantial help for New York City, including $1 billion to help ease the strain caused by the thousands of asylum seekers who have flocked to the state, Carl E. Heastie, the Assembly speaker, confirmed earlier this week. It also included a lifeline to salvage the finances of the city’s transit system, which is projecting a deficit as a result of reduced post-pandemic subway ridership levels.
On other fronts, the governor’s priorities unraveled.
That included her ambitious housing plan, which called for the construction of 800,000 new units over the next decade by allowing the state to override local zoning laws. Lauded by experts who said it would help reverse the state’s housing shortage, the plan faced intractable resistance from lawmakers, forcing Ms. Hochul to back away from it during negotiations.
Lawmakers managed to knock down other divisive ideas, including Ms. Hochul’s proposed tuition hikes for in-state students at city and state universities, a change to the way the state measured emissions, and a ban on the sale of menthol cigarettes that was opposed by Big Tobacco and had divided Black leaders. Lawmakers did agree, however, to raise taxes on cigarettes to $5.35 a pack, up from $4.35.
Ms. Hochul, for her part, managed to fend off proposals that had been championed by Senate and Assembly Democrats, including efforts to increase income taxes on the superrich and a tenant-friendly measure opposed by the real estate industry that would have limited a landlord’s ability to raise rents.
The governor has made crime a cornerstone issue since taking office in 2021, but it took on greater importance after her Republican opponent, Lee Zeldin, seized the issue to drive his campaign — narrowing Ms. Hochul’s margin of victory to the single digits.
The governor’s changes to the bail laws, which she has repeatedly said was her biggest priority, built upon adjustments she had won last year, when she allowed judges to consider factors like the severity of the crime, and whether or not the accused had access to a gun, when making decisions on whether to hold defendants on bail.
The effect of those changes was limited, because New York law said that judges can use the “least restrictive” means to ensure defendants returned to court. But this year’s proposed changes would, for the first time explicitly allow judges in some cases to set bail with public safety in mind.
