To plug New York’s massive budget gaps, Gov. Hochul should focus on growing the economy

Here’s a novel idea for Gov. Kathy Hochul: Focus on growing the state’s economy — keeping taxes low, unleashing fracking, easing regulations — and generating new revenue to avoid painful cuts and tax hikes as she closes her massive budget gap.

President Donald Trump’s federal budget restructuring popped a hole Hochul’s own $254 billion spending plan, so she’s already directed state agencies to cut $750 million.

She’ll have to come up with another $3 billion in savings, or new revenue, next year.

And the Citizens Budget Commission flags a $22 billion long-term structural imbalance.

One way to plug the hole is to supercharge the economy. A growing economy means a growing tax base.

This week, Politico Playbook declared that “Wall Street could be the state budget’s savior next year — or a major headache.” 

But it’s dangerous for the state’s economic fortunes to be dependent on the ebb and flow of the financial markets.

(Wall Street provides about a fifth of state tax revenue.)

New York has so much more to offer: Tech companies, like AI, are certainly growing.

But energy-intensive industries and large companies won’t locate here unless New York offers reliable, reasonably priced energy.

And Hochul, pandering to green extremists, has been downright hostile to traditional sources of energy, particularly natural gas.

The state’s climate law, which then-Gov. Andrew Cuomo put in place and Hochul adopted, sets all kinds of rules for emissions that discourage new tech business.

And renewables, like wind and solar, won’t cut it.

Contrast that with the way investors view Pennsylvania: Just last week, they — along with Trump — announced a whopping $90 billion injection of funds to turn Pittsburgh into a major AI hub.

Meanwhile, another economic-bonanza-in-waiting in New York is the Southern Tier’s Marcellus Shale Formation, with its massive quantities of natural gas.

That gas has sat idle ever since Cuomo banned fracking (the process of extracting the gas) about a decade ago.

Hochul has zero interest in lifting the ban, but if she did it could jumpstart the region — kicking off a new flow of revenues to help with her budget woes.

In Pennsylvania, fracking has been a major boon — for jobs, businesses and the state’s balance sheet.

Hochul can also boost New York’s economy by making the state more business friendly overall. That means lowering taxes, not raising them.

And scrapping many of the state’s endless regulations; its minimum-wage laws alone are surely deterrents to businesses.

Such steps will help the state in countless ways.

They’ll open up more jobs to New Yorkers (and the rise in demand for labor will itself push up wages).

They’ll boost economic activity, creating more prosperity for everyone.

And they’ll generate new revenue to help close the state’s budget gap, reducing the need for cuts or tax hikes.

Hochul can stick to the old ways — laying off workers, reining in spending (both of which are necessary, in any case) and/or hiking taxes.

(How she’ll justify her $400-a-family refunds, meant to goose her reelection chances, is beyond us.)

Or she can make New York a pro-growth state, by lifting the fracking ban, holding down taxes, promoting new energy production and relaxing regulations.

We won’t hold our breath waiting for that, but when her budget cuts and tax hikes hit, just remember: She had other options.