Inauguration Day

Good morning from Albany, New York, where we are anticipating the release of Governor Hochul’s FY2026 Executive Budget proposal at 1 p.m. tomorrow. The budget will provide detailed insight into the numerous proposals that Hochul unveiled last week during her State of the State address, spanning new public safety campaigns, initiatives to make New York more affordable, support for families, and an overall look at state finances and operations.

Here are some highlights:

Affordability

The linchpin of Hochul’s “affordability agenda” is a sweeping tax cut for five of New York’s nine tax brackets (for joint filers who earn up to $323,200), impacting an estimated 8.3 million taxpayers, though the proposal still needs to earn legislative support. Hochul’s plan also calls for an expansion of the state’s child tax credit to $1,000 per child under four years old and $500 per child between four and sixteen years old, as well as one-time “inflation rebate” payments of $300-$500 depending on income level. Speaking on affordability, Hochul said, “My commitment to every New Yorker is this: your family is my fight. A home for your family means everything, and we did all this because your family deserves more money in their pockets, as well as a place that they can proudly call their home. Our state has to be livable, and the people here have to be able to afford to live in it.” She also endorsed a plan to make school meals free for all students and the creation of a ‘Coalition for Child Care’ to explore pathways towards Universal Child Care.

Public Safety

In response to numerous troubling events on the New York City subway, Hochul announced that the state would partner with the city government to undertake a $77 million initiative to deploy 750 additional police officers at subway stations and two police officers on every overnight train for the next six months.

That $77 million now appears to only cover three months, with New York City contributing another $77 million to cover the anticipated $154 million price tag. Hochul offered, “I'm not waiting. Monday you will start seeing the increased presence on the overnight trains. There is a lot of anxiety on these trains late at night. I want to tamper that down.” Her plan also calls for banning individuals convicted of assaulting riders or MTA workers, though similar proposals have been rejected by the Legislature in the past. As part of an effort to address public safety more broadly, Hochul has called for changes to the state’s discovery laws, saying, "I want judges statewide to use all the powers under our recent bail law changes to stop the rinse and repeat cycle of offenders being released over and over without consequences only to commit crimes again. And I’ll fight to finally close the loopholes that were created in our discovery laws that delay trials and lead to cases being thrown out for minor technicalities.”?

Hochul has proposed an expansion of the state’s involuntary commitment laws, broadening the criteria for who can be held and empowering psychiatric nurse practitioners to order involuntary holds. She stated, “People should be able to get to work in the morning, attend a play, enjoy our incredible restaurants without the fear of random violence or dodging someone in the midst of a mental health crisis. We cannot allow our subway to be a rolling homeless shelter.” She has also expressed a desire to strengthen Kendra’s Law, which gives judges the authority to mandate outpatient mental health counseling.

Legislators and advocates are particularly seeking details on discovery and involuntary commitment. Expect broad pushback and a battle on both of these fronts throughout the budget process.

Transportation

Hochul has endorsed the Metropolitan Transportation Authority’s (MTA) 2025-2029 Capital Plan, although late last year it was rejected by legislative leadership due to a $33 billion budget gap. Nonetheless, Hochul committed to funding the beleaguered subway system and further proposed a number of expansions and renovations, including an extension of the Second Avenue subway, an expedited trip between Poughkeepsie and New York City, modernized signal systems, and long-delayed investment in new buses and subway cars. The Legislature broadly supports long-term investments; the question is how to pay for them. Optimistically, the “pay for” will be detailed in tomorrow’s budget but, as Hochul's spokesperson Avi Small stated in late December, “Now that the Legislature has raised these objections to the capital plan, we look forward to seeing their recommendations on which of those projects should be deprioritized and which revenue streams they are willing to propose.”?We shall see.

Hochul’s?address also included reference to two regionally significant transportation projects: a redesign of both Interstate 787 in downtown Albany and the Cross-Bronx expressway.?

Environment?

Perhaps the most notable aspect of Hochul’s climate and environment agenda was what was omitted. Advocates had expected Hochul to reveal details of a new “cap and invest” program, a proposal from her 2023 State of the State and a cornerstone of New York’s plan to meet ambitious, self-imposed climate goals.

The briefing book released ahead of Hochul’s address said the relevant agencies “will take steps forward on developing the cap-and-invest program, proposing new reporting regulations by the end of this year.” Hochul also expressed an openness to expanding the state’s use of nuclear energy, pointing to a pending request with the federal government from Constellation Energy to develop small modular reactors at their site in Oswego.?

The MCO tax from last year may have provided some breathing room for Medicaid spending, while the Hochul administration indicated it has stepped back from plans to address "hold harmless" provisions in education funding. However, as always, advocates, practitioners, educators, unions, and our team will be closely examining the budget for potential cuts or reductions in growth for both healthcare and education spending, which continue to grow exponentially. We will also consider what this means for future budgets.

You can watch Hochul’s full remarks, including the somewhat entertaining yet seemingly never-ending introductory performances, here.

If you ask Damian Williams, New York’s lawmakers have their work cut out for them if they are serious about making government “energetic, efficient, and effective.”

The outgoing U.S. Attorney for the Southern District of New York penned a scathing op-ed on the current state of politics and government. Williams writes, “America’s most vital city is being led with a broken ethical compass. All this while New Yorkers deal with a declining quality of life—high housing costs, a too-often-unsafe subway, and a general sense of disorder. Albany is hardly in better shape. Its entrenched culture of corruption, which the Southern District has long sought to address, is only rivaled by its knack for inaction and incrementalism.” We will see whether this is simply parting advice from Williams or a hint towards a future campaign platform.

In Washington, D.C., Donald Trump will officially be sworn in as the 47th President of the United States at 12 p.m. today. The swearing-in ceremony and associated events have been moved into the Capitol Rotunda due to dangerously low temperatures. (The last president to take the oath of office indoors was Ronald Reagan at his second inauguration in 1985.) Many Trump supporters who made the trip the D.C. are not happy with the change of plans?and, quite literally, being left out in the cold.?

Trump and his Inaugural Committee, flush with cash from a record-setting fundraising haul, had a weekend full of events in Washington leading up to the ceremony. On Saturday, Trump hosted a reception and fireworks display at Trump National Golf Club in Virginia before attending the Cabinet Reception and Vice President’s Dinner at the National Gallery of Art in Washington. On Sunday, Trump delivered remarks at a “Make America Great Again Victory Rally” and hosted a private candlelight dinner at the National Building Museum, with a table for six costing $1,000,000. After the festivities, Trump was set to appear at three separate inaugural balls later in the evening. You can read more about the inauguration schedule here.

Tuesday is when the action happens. Speaking of his plans for day one, Trump said, “Your head will spin when you see what’s going to happen.” His campaign trail promises routinely made mention of executive orders on day one to reverse Biden-era policies on immigration and energy production, as well as his vow to pardon January 6th rioters. On Tuesday, Trump will hold two kick-off meetings with Republican leaders at the White House—first with Speaker Mike Johnson and Senate Majority Leader John Thune, and later with the entire House and Senate Republican leadership.

Speaking of Congress, Republicans in the House and Senate are rounding out the final committee and leadership assignments as their focus turns to the looming reconciliation fight. Speaker Johnson (R-La.) appointed Rep. Virginia Foxx (R-N.C.) to lead the House Rules Committee, the powerful panel that decides if and when legislation advances to the floor for a vote. Johnson chose Foxx over hardline conservative Chip Roy (R-Texas), whose aversion to government spending has led to plenty of fights with GOP leadership. In a move seen by some as a concession to hardline conservatives for snubbing Roy, Johnson removed Rep. Mike Turner (R-Ohio) as chair of the House Intelligence Committee, a position he has held since 2022. Johnson insisted the move was simply about bringing in fresh blood, saying, “It’s a new Congress, we just need fresh horses in some of these places, but I’m a Mike Turner fan, he’s done a great job, he’s performed valiantly in a difficult time under difficult circumstances. So I have nothing but positive things to say about my friend and colleague.”

Some House Republicans were surprised and dismayed by the shake-up, with Rep. Dan Crenshaw (R-Texas) saying, “We all have questions and concerns" and that Turner's removal "kind of came out of nowhere.” Though Turner attended a dinner with Trump at Mar-a-Lago last weekend, his views on aid to Ukraine and domestic surveillance authorizations remain at odds with much of Trump-world. He also spoke out about Trump and J.D. Vance’s comments on the campaign trail degrading Haitian migrants in Ohio which, evidently, did not go unnoticed.?

Congressional Republicans are still mapping out their strategy to advance President Trump’s policy priorities through reconciliation, a parliamentary procedure in the Senate that allows the GOP to advance legislation through a simple majority rather than the normal two-thirds threshold. The House Freedom Caucus officially drew their line in the sand, proposing a two-step reconciliation plan that first deals with border security, reverses Biden-era energy policies, and raises the debt ceiling, leaving tax policy for a separate reconciliation package. In a?statement, the Freedom Caucus wrote, “Our proposal is a Republican plan that we believe can reach 218 votes, that would also allow us to keep the ball on the Republican side of the negotiating field for defense and non-defense appropriations—while delivering wins and uniting the conference.” The proposal is a steep departure from Johnson, who has indicated he would prefer a bipartisan solution to the debt limit rather than including it in a reconciliation bill. Johnson and his allies have publicly made the case for a single package, arguing that if an extension of the 2017 tax cuts is not done in the first package, it may not get done at all. House Budget Committee Chair Jody Arrington (R-Texas) released a?51-page menu?that outlined different areas where Republicans could find savings to offset the costs of their priorities, namely an extension of Trump’s tax plan and increased funding for the border.?

Congress will also have to address federal aid for California following the deadly wildfires in Los Angeles. Johnson caused a stir last week when he suggested that there may be strings attached to any federal money, saying, “Obviously there's been water resources management, forest management mistakes, all sorts of problems. And it does come down to leadership and it appears to us that state and local leaders were derelict in their duty in many respects. So that's something that has to be factored in. I think there should probably be conditions on that aid. That's my personal view.” The remarks were met with immediate condemnation from Democrats who warned Johnson from starting a political tit-for-tat over federal assistance. Rep. Jared Moskowitz (R-Fla.) posted on Twitter, “This is a Mistake. If you start this, it will never end. When Dems retake the House, they will condition aid to Florida and Texas. Disaster Aid must stay nonpartisan. I would fight Democrats should they try and do this. The Speaker can find many other ways to hold people accountable.”??

Farewell to film personality and longtime Milwaukee Brewers broadcaster Bob Uecker, rightfully known as “Mr. Baseball.” Timeless.

Farewell also to Sam Moore, the legendary soul musician from Sam & Dave?who passed away last week. Essential music.

And say goodbye to Italian soccer club Lazio’s eagle mascot. The bird’s handler was fired after posting lewd photos and videos online.

-Jack O’Donnell