Audio & Rush Transcript: Governor Hochul is a Guest on Spectrum News’ Inside City Hall

Audio & Rush Transcript: Governor Hochul is a Guest on Spectrum News' Inside City Hall

Governor Kathy Hochul was a guest on Spectrum News' Inside City Hall.

AUDIO of the Governor's remarks is available here.

A rush transcript of the Governor's remarks is available below:

Errol Louis, NY1: I want to start with this whole issue of these cyber attacks that apparently held up the completion of the Budget. What are you hearing? Is this a ransomware attack? What happened back there?

Governor Hochul: Thanks for having me back on the show, Errol. Yeah, it was unexpected. I got a 4:30 a.m. call that that the commission that's responsible for legislative bill drafting was under attack. I will say this: first of all, it's under an active investigation, so we'll be disclosing as much as we can and when we're able to. This is very active. There were impacts, but we're still very much functioning. So, we are moving through what we need to do to get to the finish line.

I keep getting reports every hour on that progress. This is one of the reasons why I invested $600 million in cybersecurity protections in my Budget and beefed up a whole unit in our state police. And I have one of the top cybersecurity experts in the entire nation working for me. And we have a plan that the White House heralded as one of the most exceptional strategic plans to deal with this. But it's like you never cover the planes that land. I cannot tell you how many attacks thwarted. This is one where we'll explain more when we know more about it.

Errol Louis, NY1: When I looked into it, I did not realize that in 2022, there were over 25,000 cyber attack complaints in New York - everywhere, not just New York government, and estimated losses of $775 million. This is a topic that Tom DiNapoli, the State Comptroller, put out in a report. And that same year, you appointed the state's first chief cyber officer. Who was that person?

Governor Hochul: Colin Ahern. Oh, yes. He is the best. I literally get a report every single week on what has happened in his operations, all the attacks, what company do you think they're coming from with their foreign attacks. So, it's ongoing. But, again, you don't hear about all those ones that are thwarted, which is many. You can always keep focusing on doing the best you can. Every once in a while, something gets through.

Errol Louis, NY1: In part for rumor control, since there are a lot of people who are concerned about this, can you say anything about what systems were affected? Meaning, was sensitive personnel or personal financial data involved?

Governor Hochul: This is, right now, confined to the Legislative Bill Drafting Commission. It's obviously actually run by appointees from the Speaker and the Majority Leader, and it's an independent commission. To my knowledge, that is the extent of the attack, but again, active investigation, so it really would be premature for you to say anything conclusive at this time, just like any crime scene. This is the first hours of an evolving situation.

Errol Louis, NY1: We were told that there are backup systems - meaning, a couple of generations old data systems that are being brought in to serve the function that would have ordinarily gotten the bills done. As far as you know, will this be a meaningful delay in getting the Budget finished?

Governor Hochul: Right now, we still expect the legislature to be able to vote as they're scheduled, probably Thursday and Friday. Again, subject to this coming together, but that's why it's good to have redundant systems.

Errol Louis, NY1: Okay, so you mentioned the idea of voting on Thursday and Friday. Lawmakers said that they were caught off guard by your announcement earlier this week. I don't know if that stagecraft or something they felt like they needed to say, but there hasn't been a handshake. And certainly, I talked with the Majority Leader of both the Senate and the Assembly in the last couple of days, and there were a number of details that they said are still being negotiated. So, where are we?

Governor Hochul: Minor details. I think you'll understand why I was able to say what I did on Monday, in announcing, again, conceptual agreement. I use that phrase, just like I did my last two Budgets. The last two Budgets we did the exact same way. The night before, I had one of my many meetings with the two leaders, which have been always respectful and cordial. I have to say, we really changed the culture in Albany. I said, is this the handshake? Yes, this is the handshake. And I said, we'll be talking about it tomorrow.

Obviously, their members were waiting at the conference. And so, I think that's all inside baseball, because when you look at what we end up announcing as our final Budget, you'll see it's the same as what I said on Monday. Again, there's fine tuning to be done, so it was not a 100 percent done Budget when I announced it, but our staffs continue to work through the days and nights. Are we on the one-yard line? I think we're pretty close.

Errol Louis, NY1: Okay. Are they giving you updates every ten minutes? Is your phone going off?

Governor Hochul: Between that and my cyber updates, it's what we do. It's what we do.

Errol Louis, NY1: Let me ask you about some of the contours of the Budget. You said that we're not going to see income taxes raised, but the number of the overall Budget went up $4 billion compared to your first estimates. Where and how did that revenue arrive? Like a lot of my viewers, we just paid our taxes the day before yesterday. So, we're wondering how you know how much you have to spend.

Governor Hochul: That's a good question. When you look at the scope of this Budget, I will not directly quote President Biden, but I'll come close. But this is a big deal - a very big deal. Everything that got done - the policy that we announced that I wanted to get done - my priorities in January are all in this Budget. And because there's so much, I have to carry this cheat sheet of all the things we've got done. It goes on and on - your fiscal response, no income tax, reserve at 15 percent, the housing, the crime fighting, education, health care, the cost of living, innovation with our Empire AI.

So, I don't know the likes of which we've seen this in any time in the recent history. We got that done, but you were asking specifically, we had unanticipated revenues. You start out with the knowledge of what your revenues are in November. You base your Budget off of that, but you're still waiting to find out what the end of year receipts are, how well Wall Street did, how well bonuses did, and we were able to work with another $1.3 billion that we found in unanticipated revenues, that gave us a little more leeway, but I also had a lot of cuts in there as well.

One thing about me as Governor, I have no problem questioning the way it's always been done, shaking up the status quo, because we get caught in these ruts. Education funding - why are we still funding schools on the same formula we had in 2008? It doesn't account for population - up or down. The population of students has gone down a lot, and we're literally funding empty classrooms. At the same time, school districts have, above the law, allowed reserves. Think about that - fewer students - reserves. Why do we have to, because the law says so, have to keep funding the same way? So, I want to make sure we take care of high need schools. Those who need the help. Those who have had an increase in students. Those who are dealing with the influx of migrant children and others. That's just one example where we tackled the status quo and some really tough issues like the affordability crisis and the shortage of housing, which I've been talking about for two years.

Errol Louis, NY1: Okay, yeah, I definitely want to get to those, but why include a non-fiscal matter like mayoral control of the New York City schools in the Budget?

Governor Hochul: Well, everybody knows this is when I have the most leverage. The Governor puts out a Budget. I put out as many policy ideas as we think we need to have. I work with my team literally starting this summer, I'll be working on all the policies. And we work closely with the legislators - we work with them on their ideas, our ideas. And so, to me, it's a way to make a dramatic impact in a short time. And I guarantee this legislature, they work very hard. They'll probably do what they did last year and still in the final week drop another 500 bills on my desk. That's fine. They do that, but this is a chance for the Governor to have a place where I can get my priorities through. And again, it's not always easy. When I talk about issues that people don't necessarily want to talk about, like crime, and-

Errol Louis, NY1: Well, from your point of view, it might be a minor detail, but things like the contours or the limits of mayoral control - meaning, we've heard talk from lawmakers that they're still negotiating how to comply with their class size mandates, and some other matters that matter a lot to lawmakers, matter a lot to a lot of parents here, that's something that, as far as you're concerned, you got what you wanted, which is mayoral control, and what it looks like is for somebody else to figure out?

Governor Hochul: No, not at all. I'm the one who signed into law the class size mandate. In my first nine months as Governor, I did that. I want this enforced. So, when we talk about mayoral control, again, it ended up coming toward the end of the process. Housing took up 95 percent of our efforts for a very long time because there was so much we had to get done. I was not going to leave until we built more housing. We have a plan to do that. But mayoral control, I think this city and the children that we serve needs to have stability.

So, mayoral control has not been done this way in the Budget before, but I wanted to stop the whole politicization of this and make it a political football. And those who are fans of the Mayor would say yes. It's not about the personalities of the leader, it's about what's the best system. People have a lot of faith in Chancellor Banks and the results that he's delivered in such a short time.

So, to keep that going - yes, we work with the Mayor's office, the teachers' union, the members of the legislature, the advocates. I was doing a lot of convening and my staff - we are around the clock on phone calls to say let's get together and do this now. We should be close to a deal, but again, I never say anything is a done deal until it's done. But that was important, and it does address the issue you just raised about class size enforcement.

Errol Louis, NY1: Sure. Let's talk about housing. Nearly all of the parties involved express a certain amount of unhappiness. And of course, one definition of a decent compromise is that everybody's a little bit unhappy. Is that a fair way to describe where we end up?

Governor Hochul: You know who's going to be happy? New Yorkers who finally have a home. And I protect tenant rights more than they have been before this deal and if there was an opportunity to get Good Cause done, if there was enough support in both houses to pass what the tenants had gone for at the beginning and they didn't do it. They never landed on my desk. This was the vehicle to help our tenants against price gouging and for them to be victimized by people that are taking advantage of them. But the most important thing I can do for tenants is to get more for tenants. If I can get more people in the system, prices will come down. If we start building more - it's basic supply and demand. Build more housing, more supply, the prices come down.

That's what I've been focused on, so I'm real excited about it. This is a great deal for New Yorkers. Everybody has their special interests. I have diametrically opposed opinions on every part of this, and I'm the one who had to bring them together. Behind closed doors, I didn't publicly castigate anybody. It's not my style. But look at the results at the end and we delivered for New Yorkers and people who want to be New Yorkers. All those young tech engineers and people in cyber and AI, they want to come to New York, but they can't find a place to live.

Errol Louis, NY1: There was one detail, and I don't want to drag you into details because as you said you feel like that can be negotiated elsewhere, but my understanding is that for a certain class of tenants, their rights will kick in if their landlord has a portfolio. Meaning they own a lot of different buildings, which is not that easy for the average New Yorker to discover.

Governor Hochul: No, absolutely. It's going to be on your lease. It'll be on your lease. There was concern about protecting the smaller landlords who may only have one building that this could be - otherwise, you'd have to have to have lawyers on call, and they're not a big conglomerate, not a big operation.

And so, this is a great part of the negotiation with the two leaders. We know they're not wanting to get the smallest, but if someone has a building of five units, but they have 20 of those buildings, that's a pretty good-sized landlord. So, these are what kept us up late at night working out those kinds of deals. So, that's why the area was excluded.

Errol Louis, NY1: And on the other side of that same overall housing compromise - 485x, I guess is what we're going to all be talking about is the predominant tax incentive deal for developers. Did industry leaders give you assurances that they're going to actually use this? The head of the real estate board in New York expressed some doubts that there'd be enough production to really meet the need in New York.

Governor Hochul: I'll tell you what we did. Last year, the one big issue that industry talked about was - or two years ago - was 421a, which is a tax incentive that's been on the books since the '70s to incentivize the production of affordable units. A developer says I will do 25 percent affordable, keep it affordable, and the whole building gets a tax break. So, that worked out well. The legislature let that lapse. I fought to get that to be extended for at least a few more years. And what happened was there were countless projects that went to limbo. Housing that could have been almost lived in by now. So, I extended that previous bill six years. That was the big issue last year. I did that because I need more housing built. 485x was negotiated closely with the industry, but also labor, because I also believe that the men and women of this city should have a shot at having a piece of government subsidized building.

That's exactly what we did. We figured out zones. We worked out wages. We were into the nitty gritty in a way you would never believe. But when industry says they're not thrilled with it. I think those people are happy with office conversions, FAR, the height restrictions that stopped so many projects, the opportunity to have this extension for six more years. So, I'm hearing from a lot of industries that say this is good for production. And there are, of course, voices who are not thrilled. But you know what, I wasn't here to please people. I'm here to help New Yorkers get a home.

Errol Louis, NY1: I got a few more. I'm going to skip around a little bit here. The SAFE for Kids Act - this was one of your priorities earlier in the year to try and put something in place to try and give parents some of the tools that they need to keep their kids safe online. Is that included in the Budget?

Governor Hochul: Not this time and the only reason we took it out is because there's this agreement between the administration and the houses, the legislature, to do something significant. Very much along the lines of what we introduced and what Senator Gounardes and others are focused on. It is just so complicated when the oxygen was all absorbed with housing for all this time. We could probably do it, but the Budget might not be done until July or August. So, we agreed that we'll just pull it out, we'll work together because we have to get protections.

The Attorney General Tish James and I announced this with Senator Gounardes a while back that we want to get this done. But you're into a new space here. This is uncharted territory. It has implications beyond our borders. But we're going to do something, I feel confident this year.

Errol Louis, NY1: Very important, and I'll take it as good news that you need to use your maximum leverage to get progress on that. The marijuana legalization, the 30-day review of how OCM has been run is going to end this week. You said recently that you're not happy with the leadership over there. You called the rollout of legal cannabis a, quote, "disaster." Should we expect personnel or structural changes at OCM?

Governor Hochul: Well, I'm still waiting for the report from the head of the Office of General Services, which is an extraordinary operation - enormous. So, we're waiting for Jeanette Moy's recommendations. We also had the option as we set this reporting to move the 30 days or to have an extension of that, and she'll be giving me a report of it.

But let's talk about what we got done in the Budget - the proliferation of illegal cannabis shops. And no one's been more frustrated with this than Gale Brewer, my great friend, and I look forward to going up there and saying, with Gale, what we got done. Because it is so unfair to those legal businesses that we're trying to start. And again, took way too long, frustrated the heck out of me, we got 400 done in 2024 alone. So, we're already making progress.

You'll see this start rolling. But if you have these legal businesses starting off and they're being competed with by hundreds of the illegal shops, that's not fair. So, we've worked with the Mayor's team and our team to structure a way that we can involve NYPD as deputies with the Sheriff's Department and other penalties, increased criminal penalties, the ability for localities to padlock and say, no, you cannot have this padlock here, you take it off and you're back in business the next day.

So, this is going to calm things down somewhat, but I wouldn't expect to see dramatic change overnight. This has been let go for too long because the original law from 2019 did not have any penalties or consequences, so I'm just doing some cleanup here.

Errol Louis, NY1: Okay, good enough. And then I guess finally on retail theft: the enhanced penalties for those who are engaged in violence against retail workers, the recalculation of what constitutes retail theft so that a lot of small thefts will actually amount to a bigger penalty because it's actually a big theft if you think about it. Speaker Heastie did not want to increase criminal penalties. He said he didn't think of it as a deterrent, it seemed to be something that he didn't necessarily see eye to eye on. What changed his mind? How did that deal get done?

Governor Hochul: You have to ask him what changed his mind. But one thing - as a leader, I do a lot of listening, and I understood his concerns. And we have done a lot to ensure that people are protected, but also not to over criminalize.

My view is that these are crimes that are being committed, you hurt someone who's on the front line. They are vulnerable, these retail workers. They are the ones who showed up during the pandemic to make sure we could go into our pharmacy and get our prescriptions and buy our baby food and diapers. So, they've been out there for us. And they're so exposed to someone coming in, sweeping the shelves, punching them in the face on their way out and laughing and knowing that there's no enhanced penalties. I said, no, we're going to protect these people.

So, we worked together, we found a good way to deal with this and move forward. Also increased penalties, more security for the stores. Again, we have to do everything we can to start having stability and calm in this city. And let people not think that there's chaos when it comes to the unlicensed cannabis stores or the retail theft. And the penalties you mentioned, the accumulation of penalties - these are people that are going from store to store to store, maybe in a stolen vehicle, and they're now selling it online. So, we're also going after the online marketplace.

I am investing. I have hundreds of more State Police that been hired to deal with this for the SWAT team. We have money to go to localities. So, I'm trying to hit this just like we did with gun violence. Gun violence is down 30 percent from what it was a year ago.

Errol Louis, NY1: You're expecting a drop in retail theft when we meet again next year?

Governor Hochul: I sure as heck hope so, but we need to put everything in place for localities to have the power they need that is not there. That's what I'm excited about. This is a great Budget.

Errol Louis, NY1: Okay. Thanks very much, Governor. Good to see you.

Governor Hochul: Thank you.

Contact the Governor's Press Office