Legislation offering tax breaks for New York homeowners, drivers, and cannabis businesses is headed to the desk of Governor Kathy Hochul as part of a $220 billion budget deal.

The state Senate and Assembly passed two budget bills (S.8009C/A9009C) and (S.8005C/A.9005C) in a session that stretched into early Friday. Hochul negotiated the package and said she’ll sign the legislation. Additional bills were being voted on Friday.

The spending plan includes a six-month fuel-tax suspension, a $2.2 billion homeowner tax rebate, and a decision to speed up a scheduled reduction in personal income tax rates. It also allows cannabis operations to start qualifying for tax deductions and businesses already licensed to sell liquor to sell take-out booze to customers who also buy food.

The flurry of tax breaks were made possible by higher-than-anticipated tax collections combined with more than $26 billion in pandemic recovery money from the federal government.

“This budget will put more money back into people’s pockets,” Hochul said during the deal announcement on Thursday.

The package includes the approval of casinos in the New York City area, a $600 million subsidy to build a new Buffalo Bills stadium, $300 million for broadband expansion, and changes to the state’s cash bail standards.

The budget legislation will include language making more alleged offenses bail-eligible, including gun and hate crimes. The Democratic governor and legislative leaders also agreed to give judges more discretion over whether cases should be dismissed because of prosecutors’ failure to meet discovery deadlines.

Thanks to the surplus of cash, New York’s budget — the largest ever — didn’t require any major cuts to be balanced, but lawmakers said that sometimes having too much money can be as big of a logistical headache as having too little. They had to pass a temporary extension to ensure state employees got paid while they dickered behind the scenes over spending and policy decisions.

Tax Relief
The budget includes a new property-tax credit for 2.5 million eligible residents earning less than $250,000. Middle-class tax cuts scheduled to be fully phased in through 2025 would instead take effect by 2023 — decreasing tax receipts by $162 million in that year while lowering the tax bite for about 6.1 million New Yorkers.

About 195,000 small businesses would together pay $100 million less under the budget, which would allow less gross income to be counted as taxable net income.

To help families cover child-care expenses, the budget would allot $7 billion over four years to make more families eligible for subsidies -- more than double the current spending level.

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