A State Budget With an Unexpected Twist: No Red Ink

Good morning. We’ll look at Gov. Kathy Hochul’s state budget, which came with an unexpected twist. We’ll also look at who is not running for governor, and who is riding the subways.

The surprise about Gov. Kathy Hochul’s $216.3 billion budget proposal was what was not in it: a mention of big shortfalls, long a standard phrase in municipal budgets.

My colleagues Grace Ashford and Luis Ferré-Sadurní write that Hochul is riding a windfall of federal funding and a jump in tax revenues, both of which fueled projections of balanced state budgets for the next five years.

Her plans for spending the money are far-reaching. She called for significant one-time infusions of cash, including $2 billion in pandemic recovery initiatives and $2.2 billion in property tax relief for homeowners. She also laid out plans for increased spending on education, health care and infrastructure, including $32.8 billion for highways, bridges and other transit projects over five years.

Hochul committed to placing 15 percent of the state’s operating expenses into reserves — a record number, but less than the 17 percent recommended by many independent budget analysts.

[Surprise in $216 Billion Budget Plan: New York Is Awash in Money]

Robert Mujica, the governor’s budget director, said no tax increases were contemplated. He said that some $7 billion in surpluses would finance one-time costs, not recurring expenses that could become unsustainable in the long run.

When everything was added up, Hochul’s budget proposal totaled $4.3 billion more than the spending plan that was approved last year. She will have to negotiate with the State Legislature by April 1, when the state’s 2023 fiscal year begins. That is almost three months before the state’s Democratic primary, so the budget could help Hochul as she runs for a full term. She has already raised nearly $21.6 million, her campaign said on Tuesday, a record for a statewide race in New York.

Some fiscal experts immediately criticized Hochul for not doing more to address the state’s population losses, which have led to concerns that the state’s tax base will shrink. “It’s a missed opportunity to provide a clear signal that New York is serious about making its tax rates more competitive relative to states that people are migrating toward,” said Peter Warren, the research director at the Empire Center, a conservative-leaning think tank.

The budget also cleared the way for an additional three casinos in New York State, probably downstate. That would accelerate the current casino plan by a year and bring in significant revenue sooner.

Still, much of the revenue not promised by the federal government is projected to come from high-income earners. That again raises the question of whether they will remain in New York and what the future of remote work will be. Closely tied to those questions is another: How rapidly will Manhattan rebound?

New York’s population fell by more than 300,000 in the past year, according to census records — the most of any state — and New York City’s 9.4 percent unemployment rate is more than double the national average. Reversing the population drain and bringing down unemployment could prove critical to the future of the city and the state — and its governor.

Weather

Expect a mostly cloudy day with temperatures in the mid-40s and gusty winds, so it will feel chillier. An approaching cold front will push temps into the mid-30s and usher in rain overnight.

alternate-side parking

In effect until Jan. 31. (Lunar New Year’s Eve).

De Blasio says he will not run for governor after all

After months of teasing, polling and preparing — as my colleague Nicholas Fandos put it on Twitter — former Mayor Bill de Blasio said he would not take the widely expected next step, which would have been to run for governor of New York.

So what is next? “I am going to devote every fiber of my being to fighting inequality in the state of New York,” he said, adding that he would have more to say about his future in the coming days.

De Blasio made the announcement in a 90-second video posted on Twitter. The video was shot on the street outside his house in Brooklyn. “Nine years ago, this is where we announced my campaign for mayor of New York City,” he said, before mentioning some of his successes in City Hall, including establishing universal pre-K, building affordable apartments and “making the city greener and cleaner for the future.”

He leavened that by mentioning what he called “my fair share of mistakes.”

“I was not good with groundhogs at all,” he said. (He dropped Charles G. Hogg, the female groundhog known as Chuck, at a 2014 Groundhog Day celebration — unless Chuck wriggled out of de Blasio’s arms. Chuck died a week later.)

De Blasio also said: “Probably shouldn’t have gone to the gym.” (He was driven to the Prospect Park Y.M.C.A. in Brooklyn from Gracie Mansion in Manhattan regularly, even as the coronavirus pandemic closed in.)

De Blasio’s video was released shortly after a Siena College poll showed him running far behind Hochul. He had a 12 percent share of Democratic voters. Hochul’s share was almost four times as large, at 46 percent. Jumaane Williams, the New York City public advocate, had 11 percent and Representative Thomas Suozzi 6 percent. The poll had a margin of error of plus or minus 4 percentage points.

In the race for campaign contributions, Hochul is also leading the field. She raised a record-breaking $21.6 million. She submitted filings showing that she took in roughly $140,000 a day, on average, from her swearing-in last August until last week.

The latest New York news

• The New York State attorney general accused Donald J. Trump’s family business of engaging in a pattern of fraud.

• Michelle Gotthelf, the editor in chief of The New York Post’s website until she was dismissed last week, said in a discrimination lawsuit that she had endured “several years of sex-based harassment” during more than 20 years at The Post.

• Mayor Eric Adams noted that the numbers of coronavirus cases and hospitalizations in New York City, while still extremely high, have started to drop.

Another sign of the economic divide: Who’s riding the subway

The pandemic brought on “a virtual abandonment” of the subway system in 2020. Now the city’s uneven recovery is reflected in the uneven way riders have returned, a sign that the deep economic divide exposed by the pandemic is continuing. Stations in lower-income areas in Brooklyn, Queens and Upper Manhattan, where residents are less likely to be able to work from home and typically depend more on public transit, have rebounded faster than stations in office-heavy sections of Manhattan.

The contrasts are clear. At a station in Queens, the daily grind is largely the same as it used to be, with thousands of people piling into trains during the morning rush. A station in Lower Manhattan felt decidedly different as the day ended and another rush hour began with only a trickle of white-collar commuters emerging from offices.

The system is also contending with fears about crime and public safety that were heightened after a woman was shoved to her death in front of a train on Saturday at the Times Square station.

Janno Lieber, the transit agency’s acting chair and chief executive, said he was optimistic that the subway’s recovery would resume after concern about the Omicron variant subsided. How quickly is unclear.

“But for us,” he said, “the key is that when people have somewhere to go, they take transit.”

And for many, he said, having somewhere to go would require “work in an office.”

What we’re reading

• Pete Wells and Tejal Rao, our New York and Los Angeles restaurant critics, discuss Covid precautions, testing and dining-room anxiety.

• The decades-old Regal UA Court Street movie theater in Brooklyn closed suddenly. TimeOut New York shared some reactions.

METROPOLITAN diary

‘Go, Janice!’

Dear Diary:

I was on Fourth Avenue in Brooklyn for this year’s New York City Marathon, a crowd of excited Park Slopers surrounding me.

People were whooping loudly and blowing noisemakers, and children were stretching out their arms in hopes of high-fiving passing runners.

I was waiting patiently for my friend to come past, holding a simple sign that said, “Go, Janice!” I knew she could use an extra boost from a familiar face in the crowd. I was amused to hear some of the other runners shout, “Go Janice!” in solidarity when they saw the sign.

It wasn’t easy to flip between the marathon app, my camera app and holding the cardboard sign, all while keeping an eye on the runners. I did not want to miss Janice, but I also did not want to miss getting a photo with her.

Suddenly, two female runners sprinted up to me.

“Hi,” one of them said. “Can I take a picture with you? My name is Janice.”

— Melissa Morgenlander

Illustrated by Agnes Lee. Send submissions here and read more Metropolitan Diary here.

Glad we could get together here. See you tomorrow. — J.B.

P.S. Here’s today’s Mini Crossword and Spelling Bee. You can find all our puzzles here.

Michael Gold, Melissa Guerrero, Ana Ley, Olivia Parker, Ed Shanahan and James Thomas contributed to New York Today. You can reach the team at nytoday@nytimes.com.

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