Gov. Kathy Hochul’s proposed state budget is getting mixed reviews from one budget watchdog.

“One of the first things that jumped off the page and has big implications for the budget is the expectation of a mild, short recession in the first half of 2023,” Patrick Orecki, director of state studies at the Citizens Budget Commission, told Capital Tonight. “But the budget does plan for it.”

A recession could impact tax receipts two or three years down the road.  

“You can see there are significant re-estimates downward for tax receipts based on that expectation,” Orecki explained. 

Additionally, while the budget is balanced in the short term, by 2026 there will be a looming $9 billion budget gap.

But Hochul gets high marks for savings and structural reform. Orecki said that her proposal accelerates some deposits that were planned over the next two years, which brings the state’s “rainy day fund” up to almost $20 billion.

“It’s a huge improvement over where we were pre-pandemic,” he said. 

The governor has also proposed some key structural reforms to the state’s principal reserve fund that Orecki describes as “really, really positive.”