Governor Kathy Hochul’s administration is contemplating significant reductions in state spending related to the ongoing migrant crisis.
This move comes in response to concerns about the financial sustainability of the state’s support for migrants and the potential impact on other critical budget areas. The crisis, characterized by the challenges of housing, feeding, and providing services to migrants in New York City, has been labeled one of the state’s “most pressing” burdens.
In a memo dated October 28, Division of the Budget Director Blake Washington outlined the administration’s stance. The memo proposed limiting assistance to targeted interventions, such as legal services, case management, and employment opportunities for migrants and asylum seekers. This approach would replace the costlier provision of indefinite stays in hotel rooms, which the state currently supports. While New York will honor commitments made to Mayor Eric Adams’ administration under last year’s $229 billion state budget, financial constraints necessitate a reassessment of spending.
Director Washington emphasized the governor’s commitment to balancing the budget without raising taxes or relying on one-time reserves for recurring obligations. He warned that without federal relief or substantial changes in immigration policy, the state’s ability to sustain this financial commitment will be limited, potentially endangering funding for essential areas like public schools, healthcare infrastructure, and the readiness of the National Guard.
The Division of the Budget’s mid-year assessment, released on Monday, revealed that the state will spend nearly $2 billion on the migrant crisis by the following April, an increase of $358 million over the current $1.5 billion expenditure. This includes expenses related to a 12-month lease on the federally-owned Floyd Bennett Field in Brooklyn, set to become a large-scale migrant shelter. New York also faces financial challenges, such as lower-than-anticipated tax receipts due to economic downturns.
However, the Division of the Budget’s belt-tightening measures have contributed to reducing out-year budget gaps through 2027. Previous estimates projected a gap of approximately $9 billion in fiscal year 2024-2025, but new estimates indicate a reduced gap of $4.3 billion. Fiscal hawks have praised these efforts while urging continued focus on addressing the remaining budget shortfalls.
Governor Hochul expressed the need for change, noting that the current rate of expenditure on hotel rooms for migrants is unsustainable, with costs already approaching $2 billion this year, surpassing initial projections. Meanwhile, Mayor Eric Adams has estimated that the migrant crisis will cost New York City $12 billion over the next three years.
Since the spring of 2022, nearly 120,000 individuals have arrived in the five boroughs, with approximately 65,000 families and single adults currently housed in taxpayer-funded shelters. Mayor Adams has been fighting a decades-old “right to shelter” mandate in court, arguing that it is outdated and ill-suited to the unprecedented influx of homeless migrants in the city. Additionally, his administration has implemented policies to limit the duration of migrants’ stays in city-run shelters.
Governor Hochul remains concerned about lower-than-expected tax receipts and the looming threat of a possible recession, while also emphasizing her commitment to not raising taxes or depleting savings. Given the challenges of securing additional federal assistance and the political landscape, it remains uncertain how New York will navigate these budgetary pressures.