Video, Audio, Photos & Rush Transcript: Governor Hochul Joins the Economic Club of New York in Fireside Chat

Earlier today, Governor Kathy Hochul joined the Economic Club of New York in a fireside chat.

VIDEO: The event is available to stream on YouTube here and TV quality video is available here (h.264, mp4).

AUDIO: The Governor’s remarks are available in audio form here.

PHOTOS: The Governor’s Flickr page will post photos of the event here.

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

Reshma Saujani: Wonderful to be here with you, Governor. We have lots of conversations we're going to have today about AI, about affordability, and how we keep New York vibrant and safe. So let's dive in.

Governor, you've said that your priority is making New York a place that people want to move to and live. What do you see as the biggest driver of New York's competitiveness?

Governor Hochul: It is truly the energy that we exude as New Yorkers. Outside of New York, they might call it a little bit of arrogance, but there's that certain mojo we have, that can-do spirit that has defined us since the inception of this club 118 years ago. And so, I think that particularly after the pandemic, when you think about the young people that are coming here — this has become the number one tech jobs destination in our nation — the whole experience of being out in Silicon Valley and working in these suburban office parks that have miniature golf and big slides, I've been to them, but there was this remoteness. And I think after the pandemic, people lost that human connection. If they're going to come to work, they want to be with other people, have those creative collisions with the barista. And so that's what we offer here.

Also, the diversity. Our tech companies, especially from the West Coast where much of it began, are realizing that they're creating platforms and solutions via technology and AI that have been very much slanted toward one perspective, which is that of the people who happen to work there, which is very homogeneous, I'll politely say. They come to New York, they have more women in technology, something that you have focused on at Girls Who Code, which is an extraordinary program. I've been to so many classes and graduations around the state promoting it. But also, our ethnic diversity and people from around the world come here, so that's something that sets us apart; the fact that 47 percent of new tech jobs and companies are being started by people who are foreign born. They're gravitating to our city because they know it's a welcoming place. I think at the high level, that is what sets us apart and continues to be part of our competitive strength as well as leveraging the superpower we have of our outstanding universities. Our graduates are second to none.

Reshma Saujani: That's right. There was a moment in time where Florida was trying to take all our people, but now people are coming back.

Governor Hochul: Oh, they're coming back.

Reshma Saujani: They're coming back in droves.

Governor Hochul: They're so over Palm Beach. Maybe not everybody in this room, okay, I'll grant you better weather, but let's get serious. Our arts, our culture, it's like the vibe here. If you've been to Broadway lately or walked the streets — I walked two miles again this morning. I walk the streets of the city every single day when I'm here and I can feel it. And I think a lot of other cities and states have lagged behind in this post pandemic world, but we are that destination.

And I am concerned about policies out of Washington that are making it more difficult for foreign born students to be coming here. This has always been our strength because they come here, they're educated and they stay and they build companies, they build wealth. So that's a barrier that I think is something that doesn't have to be, it's self-inflicted and that's going to hurt our whole nation. But we have to power through that.

Reshma Saujani: Yeah. And one of the big drivers of how people decide or where people decide to live is affordability. Affordability is a huge component of competitiveness. Housing and safety matter as well. Child care is also a big driver of cost. How do you think about affordability holistically? Because I really do believe that you are the affordability-governor in the country.

Governor Hochul: How I think about it? I think about it nonstop, number one. I truly do. And this is not a new incarnation of a position for me, I've been talking about this for my entire life because I started out very humbly. My parents used to live in a trailer park and I was born in a little tiny place near the steel plant where my dad worked — at the factory, my grandparents, my grandpa worked there, my uncles worked there, and then we eventually were able to emerge out of that into a much more successful life because my dad was able to get a college degree and that took us out. But we struggled in the early years.

And so, I think just because of my life's experience, even starting out as a new mom in Washington when I couldn't find child care and had to leave a job. I was counsel to Senator Moynihan, and I loved that job, but I couldn't find child care. My husband was working at a not-great-paying government job at the time. And so, those early struggles haven't changed much for young people today.

And I want this to be the place that families want to come to. And I know the barriers. That's why I've been leaning so hard into building more housing. The number one cost is your rent, and if you're lucky enough to have a house, your mortgage. And it’s something that was always within reach for people who worked hard, my entire life. People are working hard today and are not able to reach that, and part of it is that we did not have the ambition in this state that — I'm sorry to admit this — was demonstrated by our neighbors, New Jersey and Connecticut, who built more housing. They broke through barriers and we've stagnated. So I've made that a real signature part of my work and we’re having tremendous success.

I spend time even on the far reaches of Long Island and convincing Republican supervisors like, “Come on, you don't have the workforce. You don't have a place for young couples to live in the neighborhood they grew up in. So let's just start building.” I had a meeting with them yesterday.

So housing is number one. I've allocated a billion dollars for the “City of Yes” that Eric Adams launched and he needed that much money to get over the finish line. It was a late night call, “Governor, can you do a billion dollars?”

“It's for housing? Yes.”

I don't play games with this. If it's good for the people of New York, I'll do it. So housing, child care and I'm so proud of the work that you do with Moms First as well. Whatever you're working on is really addressing society's problems, and I appreciate that, Reshma.

But child care was a cost barrier. We already, in my Budget this year, we have $2.2 billion for child care. We changed the formula so 500,000 more children are eligible for subsidies. We have $110 million to build more facilities. But we have a long way to go. We're not even close. But if I can tackle housing, more supply, drive down the cost, ultimately, build more, get the child care cost down. And also utility bills, I'm trying to go for a more robust, all the above approach. Obviously there's very much criticism of some of my policies, but I don't have a choice. I tried to go full on renewable. I had to save an offshore wind project that will now be because I saved it. The Trump administration literally shut it down in March and it's going to generate power for half a million homes in Brooklyn next year to be powered by offshore wind. I could not let that go. I had to negotiate hard to get that back.

But that's what I'm talking about, hydro and even nuclear. This is something that people don't expect from a Democratic Governor, well, that's a shame, because I want to power the economy that is waiting, knocking on our door. The innovation, the technology, artificial intelligence, quantum, but I have to have plentiful power to do it, as well as help drive down the cost for our consumers and local businesses. That's my framing of what affordability looks like, is tackling all those areas, and we have strategies on each.

Reshma Saujani: Yeah. And I want to go deep in some of those areas in a second. I want to ask you a question that's probably on a lot of people in this room's minds. You recently endorsed Zohran Mamdani. What assurances can you offer to city's business leaders who've expressed some concerns about his election?

Governor Hochul: Listen, I've heard the concerns many times. I think people are starting to understand that — it's hard for New Yorkers to accept this, I'm sorry to say it, but New York City is still a subdivision of the State. So the State of New York, the Governor —

Reshma Saujani: Yeah, we don't think that.

Governor Hochul: I know. Generally, there's been this tension between governors and mayors, historically, and I swore I would never do that, and I'm not going to go there. I worked with Bill de Blasio. I worked very closely with Eric Adams. We've worked to drive down the crime rates, which we've been successful at. So, I'm a person who will exercise my power where I need to, behind the scenes or in front, but my goal is to just deepen relationships. And so an endorsement like that allows me to have a relationship with someone who I believe is going to be the next mayor, which I think is going to be important for me to be involved in the transition team and the talents who surround him, because whoever the voters want as their mayor, it's my job to make it all work out. I will never root against this city. I also represent the 8.3 million people who call New York City home. They're my constituents as well. So I think there's a path for us to work collaboratively. He's an assemblymember. He understands what a Governor can do. Mayors historically come to us, it's literally called Tin Cup Day, the mayors from every city come and ask for money and support, and they want to have a relationship with the Governor as well that's productive because they want to go home with their tin cup as full as it can be.

So, there's policies that are troubling to the business community, I understand that. But let's get to a place — and he, the candidate, has focused intensely on affordability. And that is not just a buzzword, it's a call to find meaningful solutions that start changing people's lives and their perspectives of their lives immediately. And I look forward to working with him on that. But this does give me — what I need to do is be able to be a voice of influence that I think is necessary.

So I just tell everybody, don't worry, we're going to be okay. This is New York. We truly are going to be fine. We'll work it out. He's brought an energy to politics which I think is important. I don't dismiss that at all. And a voice and an optimism and I think that's what our city needs.

I said, I've always been a happy warrior. I represented the most Republican district in New York in Congress, and it was tough. They said I was the happy warrior. I just powered through it, won people over, and I believe that Zohran Mamdani has that ability as well.

Reshma Saujani: Thank you. I want to talk about AI. I had an opportunity to have a conversation with you about five months ago about the $400 million Empire AI investment. And since then, you've expanded it to over $500 million, launched a supercomputer that's 11 times more powerful.

Everybody in this room wants to dunk on California—

Governor Hochul: Oh yeah. This is easy to do.

Reshma Saujani: —when it comes to AI.

Governor Hochul: This is an easy one for me to do.

Reshma Saujani: Right, we want to be leading the way in terms of education, in terms of innovation. If you're a startup entrepreneur, you want to come here and build your company. What are you seeing? What concrete results are you seeing since you've made that investment that's going to make us believe that we're—

Governor Hochul: And it's only been, it was a short time ago—

Reshma Saujani: That's right.

Governor Hochul: —when the idea was presented to me. Had breakfast with an individual who was very much forward thinking. And he said, “I have this idea. It's finally got a 10 percent chance of happening, but I want to plant it with you.”

And he says, “What if we are able to harness money from the stage?” Millions, literally millions. “Money from the private sector,” millions, “and bring in the superpower of our universities, our primary universities around the state,” our research institutions, “and bring it all together and build the first-in-the-nation institute, or empire, or for artificial intelligence dedicated to public good and research?”

So, it's already working. It's up at the University of Buffalo. It wasn't just a hometown call, I know what you're thinking, but it's also, I had plentiful power. It's right near the hydroelectric plant we have at Niagara Falls, so I could power this. There was plenty of space. What it does is it harnesses artificial intelligence in a way that the researchers — as we talk about innovating new therapies for diseases, they're light years ahead of where they would've been.

Reshma Saujani: Right.

Governor Hochul: Because of everything, the speed of it. Also trying to figure out ways we can support businesses and overcome this fear of AI because it is having an effect on jobs — we have to put that right out there — and figure out how we can solve that. But we launched it. My friends from Silicon Valley all said, “Oh, we wish our Governor had thought of this because we're the first-in-the-nation.”

So, this is power that's not available to any other institutions in the country. This is the largest supercomputer in the nation that's not in a private company's hands. And then we already did our Beta.

Reshma Saujani: Yep.

Governor Hochul: Already, the next year, and it's 11 times more powerful and we're just getting warmed up.

And I was just on my way here at a meeting in my office talking to someone who's looking to (make) a $50 billion investment in artificial intelligence Upstate with the power we have. So we're just getting started. And he said, “When we open this, we can have 11 more companies that'll come.”

Reshma Saujani: Yeah.

Governor Hochul: You're just seeing the beginning of this, but we planted the seeds, we gave us the foundation we needed, and this will help not just the Upstate economy, but all the way from here to Long Island.

Reshma Saujani: Governor, what do you think though? What's the next part of this conversation? And if you look at the recent jobs report, you can finally see the impact that AI is going to have on jobs.

I often think about — actually, an ECNY member board trustee said this to me. He said, “We thought it was bad in the ’80s with the auto industry in Detroit. What's about to happen in the next three to five years is going to be that times a hundred,” in terms of the impact that you're going to see. And you're immediately going to see it with young people, right?

Because many of those entry level jobs are just simply not going to be open. And any nation that has a bunch of young people unemployed — it's not good for social unrest. And so what I'm not seeing enough about in the policy discourse is what's the plan on jobs?

Governor Hochul: Yeah. Let me break this into two parts.

Before I launched this, I had a meeting up at the Governor's residence with the CEOs of the largest tech companies in the nation and a lot of people involved in workforce development. And I put out the question — it was a very thoughtful evening before we did this — I said, “What happens to the jobs of people right now?”

I said, “Tell me how you're preparing for this, how I should prepare for this.” And when they talked about the fact that there's a task that it would take someone an entire week to do and they can now get it done in a day. He says, “That enhances our productivity that much. That person's not going to lose their job, we're going to be that much more productive and, therefore, more profitable.” And that is one side of the equation.

On the other hand, we've been encouraging young people to study coding for years.

Reshma Saujani: Yes.

Governor Hochul: Who would've thought coding would be obsolete?

Reshma Saujani: Not me. Certainly.

Governor Hochul: No. No. Yeah, so you need to have “Girls Who AI,” I guess. “Girls Who AI.” So, it is a transition, and you don't need to tell me about disruption from these economic transformations, disruptors, because I'm from Buffalo. We lost our identity for two decades when Bethlehem Steel left. I mean, that shuttered down 20,000 jobs overnight.

Reshma Saujani: Yeah.

Governor Hochul: My entire family — I come from a big Irish family, everybody had to leave the state because —

Reshma Saujani: Yeah. You know this, you've seen it.

Governor Hochul: I saw it. I lived it. And it was depressing. Unemployment was 14, 17 percent when I was growing up. The headlines were always another company leaving town. That's why I'm so focused on creating jobs.

So, I am concerned about the plight of the young people who were promised that if you go into these skills, there'll be jobs for you forever. But let's figure out these companies who assure us, who are going to say “we're going to be more productive and more profitable.” But also, I have so many more jobs — I have 200 individuals, part of a new program at the University of Buffalo who are learning skills to harness the power of AI, and do things that you can't even imagine in this room right now.

Reshma Saujani: Yeah.

Governor Hochul: And that's where we've got to shift the focus to those who would've been working in traditional coding to be able to be in a position for these opportunities. But, deeply troubling to me is the fact that the unemployment rate for recent college grads is going up.

Reshma Saujani: Yeah, it's going up.

Governor Hochul: And I have to find more opportunities for them to shift into the job.

I have 700,000 open jobs in New York, by the way. Our unemployment is still very low in this state. Whether it's health care, whether it's advanced manufacturing, whether it's the trades where I'm building so much. We have a huge shortage of people in the trades, but also, education. I don't have enough nurses because I don't have enough nursing teachers.

So, I have such a demand for people. We just have to point them out. And I have a — go to my Department of Labor website.

Reshma Saujani: Yeah. I think it's like figuring — I mean, there's going to be more jobs than care. Listen, I think companies saying that they're going to be more profitable as they reduce jobs is true.

The question is, what's the role that business actually plays in ensuring that our next generation has an opportunity to march into the middle class? I have no doubt because you've seen this, that you're going to help figure what that is.

Governor Hochul: We absolutely are. No, it is a challenge that we're leaning into.

Reshma Saujani: Yeah. I want to talk about my favorite topic now — childcare. As you know, you've invested $7 billion in childcare. You were one of the first Governors in the country to really see the potential — and not the potential of childcare as a personal issue, but as an economic issue.

Governor Hochul: That's right.

Reshma Saujani: Workers can't work without childcare, and businesses don't work without childcare, period. It is the same problem. For those of us in this room who still may see it as a social policy issue and not an economic issue, can you educate?

Governor Hochul: I sure can.

Reshma Saujani: Thank you.

Governor Hochul: Especially after the pandemic, I was convening leaders of various businesses, different parts of the state — I remember one forum I did in Westchester. And a lot of the business leaders were saying, “The women aren't coming back to work after the pandemic.”

Reshma Saujani: Yeah.

Governor Hochul: Because so many childcare facilities shut down during the pandemic, never reopened. And this was a real — all of a sudden they realized, “Oh, this is a problem that affects me now and my company, because I can't get the workers back.”

Before it was always viewed as, “Well, you wanted to have kids, you figure it out,” right? That's how I felt. It was no support system and I was having my children. And so I love the fact that businesses are seeing this as their problem as well. It's a competitive issue because I believe that the companies that are enlightened enough to find and provide some form of child care would be the ones that people gravitate to.

And whether it's onsite for large facilities — look at what I did with Micron, we landed the largest private sector investment in American history in Upstate New York, 50,000 jobs, a $100 billion investment. But I also said, “We'll support you.” The Chips and Science Act put in about $5 billion we put in about $6 [billion] from the State, and believe me, that was not an easy lift with our Legislature. But it's going to result in construction jobs and long-term jobs. But I also said, “We're going to support you, which you need to support the community. I'm going to need you to have a child care facility on site. You got big land, you got lots of room, you got lots of money.”

Guess what they're doing? They're building it right now, onsite child care. They'll be able to have the parents, men and women who want to be able to see their kids during break time or not worry about them if they have to work late. That's how you start solving this. And even in areas that are the small downtowns I visit, why don't the five businesses on this block come together and put together a consortium and help subsidize a little program in this empty storefront right here? And the problem with New York City is we have zoning that makes it impossible to expand because everything has to be on the ground floor.

Reshma Saujani: That or close to a park, as you had said.

Governor Hochul: Yeah, a park. So I think it's time to just — not just in housing, but in child care — New York City, in order to be competitive and address this crisis, has to be more nimble and look at regulations. And I have a team that's scouring our regulations to find the ones that are barriers to businesses and their success, and this is definitely one of them in the City. So let's figure that out. And it shouldn't have to be on a first floor when a lot of these children are living in high rise apartments themselves. Why do they have to be on a ground floor to go be taken care of by another person? So there's not a logic to it. But I do put it on the businesses now who want to employ people and support and find ways to support the workers.

Reshma Saujani: Yeah, we're just coming off a meeting with the Partnership and with business leaders and they realize that this is the number one impediment to them being able to hire the best people. It feels like there's a pivotal moment right now, both in the City and the State, childcare was the number one mayoral election — was a defining issue as to how parents, how people voted, quite frankly, in the primary election. It will be the same thing in the general. Can you commit to working with the next mayor on this issue? And do you feel like there's room in the 2026 Budget to help increase child care investments?

Governor Hochul: Already had the conversation. We've been speaking all summer to find whether or not there's a commonality and I have found it in many areas, and many major disagreements, which are widely known. But this is one area where we talked about the fact that I could — in one year we could do it, but it's $7 billion for New York City alone. I doubled that because the rest of the state I cannot leave behind, I'm talking $15 billion. I have about $14 billion in reserves, I have a $3 billion hole from the federal government in one year because of the cuts in Medicaid support. I had to figure that out and $750 million this year alone. So we talked about the logic of starting it. And I already called for universal child care in my last Budget, so that's why I have $2.2 billion being spent now. But there is absolutely a path to do this. And you have great ideas, we're looking at your plans on the fact that you can't do it all in one year, but you have to give people hope that—

Reshma Saujani: You can phase it in.

Governor Hochul: You can phase it in. That’s exactly what you do, that’s exactly what you do. But I also believe we could, this will make us more competitive as a state.

Reshma Saujani: That's right.

Governor Hochul: Because we'll have the employers, but the employee workforce that attrition will be reduced. And I think as someone who's been in this business a long time and helped start some family businesses and helped run some tech companies in my previous life.

You take care of your employees during these early years when they just need help. The kids are, from birth until kindergarten, that's when you support them. They'll be with you the next 20, 30 years. So this is an investment in people.

Reshma Saujani: That's right.

Governor Hochul: That shows they matter. And after the pandemic, I think young people particularly, everybody's priorities shifted more toward families are really important.

Reshma Saujani: Families are very important.

Governor Hochul: We've seen that loss of life that was so prevalent during the pandemic and realizing how precious it is. People really need that time with their families, and I think it makes them come back to work as a more engaged individual. And that's why even paid family leave — my son just came off of paid leave two years ago with the new baby. My son-in-law is now going to be starting his four months to take care of the baby. So that also creates a relationship with children that just wasn't there when my dad was working at the factory, the long hours they put in. But I think it's really important and you'll get a more well adjusted, happier, more committed employee. I think businesses need to look at the whole of that person, their happiness and contentment and you take care of their problems, makes them more productive for you.

Reshma Saujani: I'm going to take that as a yes, Governor.

Governor Hochul: Yes, oh yes.

Reshma Saujani: All right. I'm a mom of a five-year-old and a 10-year-old, and I think a lot about crime and safety. Oftentimes when I'm walking to school, I'll see someone shooting up on the corner. Crime is a problem, a big problem in the city. How do you balance keeping New Yorkers safe?

Governor Hochul: This has been job number one since I've been in office, exactly four years. Right after the pandemic, our numbers were escalating at frighteningly high numbers. Whether it was the shootings, the murders, the assaults, subway crimes, and we're trying to tell people, “the pandemic's over, come back to work and please ignore the scary headlines about the crimes in the subway and get on the subway.” I knew that we had to make the subway safer before we could make that case to people to get back on your main primary vehicle of transportation to come to your jobs. And so we did.

We invested so much energy into this. I can't tell you how many meetings I had with my law enforcement team just trying to strategize. And working with the mayor on how we could do this, and subway safety is something that I have more say over because basically the MTA is a creature of the State. So you saw what we did, several years ago we started, we launched cops, cameras and care. Cops. I said, “I need to flood the zone.” I need to have more police officers visible and to the extent that they couldn't afford to do more in the city, I said, “I'll pay for overtime.” You've never had this in the history of New York, but the Governor's paying for law enforcement overtime to cover the subways. There's two police officers on all the overnight trains.

Crime has plummeted, and that's normally the most dangerous time when it comes to crimes. It's on the overnight when we have our health care workers and our people in hospitality and the trains late at night and there are not many other people. So we focus on police officers.

Then, we are taking it down and I saw a little spike in March of last year and I said, “I can't even have a little blip. I cannot start this trend upward again.” So I said, National Guard next. And again, I'm the one who deploys the National Guard in New York because I'm the Commander in Chief.

I've had this chat with the President about whose responsibility it is. I said, “I'll give you a call.”

Reshma Saujani: To remind him?

Governor Hochul: I said, “I'll give you a call if I need you,” and he said okay. So we'll just put that over here. We're good right now. But the National Guard there, not that they had a policing function. Or a military function, but the deterrent effect, and I can't tell you who told me, like they just felt better. Like they just thought no one's going to do anything bad with that guy standing there or that woman's standing there. And so between the police, the National Guard, more MTA Police calming it all down, and then there's a camera now on every train. And they told me it would take a few years. They said, “It will not take a couple years. You're doing it now and we're going to speed it up.” They doubled their time. Every train is a camera, so behave. When you're on the trains, you're being watched.

And also we talk about care. It is the people getting on the train in the morning and there's been homeless individuals sleeping on the train overnight or someone sleeping on the platform. Or as soon as you come out, they create this sense of anxiety for people.

You don't know if this person is harmless or are they going to do something harmful to you or your family member? And that's the unease people feel. We took a lot of effort to put in the money and building out the supply of supportive housing. We took a thousand people who had been long-term homeless longer than a year, living in those confines there and getting them into supportive housing. But then there had been a historic approach to people with severe mental health problems — because not all people are homeless, have mental health problems — because some just literally can't afford a place to live, may have lost their apartment.

So there's that category, but those — some serious mental health problems. The conventional wisdom was always that they have a civil liberty right to be there. You can't remove them. I took that on this year in the legislature and it was a tough one, and I was able to change the laws that allow for law enforcement and people who are mental health professionals to do an assessment and to remove someone — it's called involuntary — get them into a hospital for care and evaluation and put them on a treatment plan and make sure that someone's watching that is implemented so they don't cycle right back to the streets. And we're making a real difference there as well.

So, Reshma, I will tell you there's still problems out there, but we just had the July and August statistics for the subway, the lowest crime rate in history — those two months and summertime, it usually you when things break down. And same thing with murders are down statewide, about 35 percent — shootings down about 27 percent. The numbers are trending in a great direction. Again, the trajectory was going up. We are going down. But there's a psychological effect. It's hard for people to wash away the earlier fears they had and say, “Oh, the Governor just said the statistics are good. I feel much better.” I'm realistic because there's going to be still another horrific case tomorrow, and that one story is going to make people feel it could happen to them, even though we have the lowest crime rate of any big city in America. It just doesn't feel like that. So that's why I have to work on the psychology part of it now, and we'll keep the investments going, but that is so important to me — statewide in the city. I've rolled out $3 billion in law enforcement money. No Governor has ever funded law enforcement at that scale. And we're seeing some good numbers.

Reshma Saujani: Yeah. It's working. So after the pause on congestion pricing, business leaders want a credible MTA Capital Plan. How are you securing long-term capital for transit while keeping the city moving? And what's the alternative funding package you're advancing?

Governor Hochul: We're good for the next Capital Plan for sure. That was not an easy lift when I was fairly new at being Governor, the MTA was hitting off the fiscal cliff. It had not been invested in at the levels it needed to just do the basic repair and maintenance, much less expansion. And so I had to put a lot of money and get credit for saving it from its demise, which was just a few years ago. And also the number of riders was way down because of the pandemic, and we're trying to bring that up.

So then last year I had to structure a plan to fund a $68 billion Capital Plan for the next four years — five years. And that was hard, but I negotiated it with the Legislature. The Payroll Mobility Tax went up a little bit, but that is basically what is funding it for now. I'm committed to this and not just the existing projects and the safety and the new signalization and the other elements that need to be maintained, but I'm starting new projects.

The Second Avenue Subway, next phase is going to be completed. I'm working with the federal government to get that done. We're working hard on that. It's going to take time, obviously, but also the Interborough Express. I love this project because I know in Manhattan, the perception is the world revolves around Manhattan, but there's actually a couple of other boroughs — four exactly — Queens in Brooklyn. A lot of people live and work out there or one or the other want to visit the family. You shouldn't have to take the train into the city to go back out. So I'm creating a connection, a nine mile connection that uses abandoned rail lines. We're already underway and I'm really excited about that. That's being funded by this Capital Plan as well, the Interborough Express connecting Brooklyn and Queens.

So there's a lot of good projects we're doing and also I'm doing the bus station over and no one would do the bus station because it was too expensive. The alternative was like, let's just leave it there and let somebody else worry about it. Those are the projects I lean into. Ones that people think they can just keep kicking down the road and ignoring, whether it's that — I think it's $10 billion to redo the bus station, but it's going to be beautiful and change that neighborhood, it's going to be so enhanced. And Penn Station

Reshma Saujani: It looks fantastic.

Governor Hochul: We haven't even started yet. You're looking at parts of it, some elements of it are done, but I talked to the President about — this is my first conversation with him back in November. I said, "Mr. President, I think there's a lot we can do together. You're a New Yorker. I'm a New Yorker. We can work out together." And I said, "I'll be honest with you, I'm going to have to hit you, criticize when I disagree or think you're hurting New Yorkers or our values or our rights. But I also think there's a lot of areas for collaboration." And Penn Station was one of them, and we've been trying for three years to get Amtrak to get out of our way so I could burst through and start making some improvements there. And I told the President that and he changed the leadership and got Andy Byford now. And so we're doing good things and then we had about $1 billion set aside for Penn Station, but it's going to cost a lot more than that, probably seven, eight, nine billion dollars.

And I remember the Secretary of Transportation said, “We're taking it over,” — pushing me aside. Thank you. Because you run it, I lease it.

And I just said, “You just saved me $1 billion.”

And I put the billion I took out of it and said, “You're paying the whole cost,” and I put that toward the Interborough Express. So all's good and I talked to the President about it not long ago about the plans and how grandiose you want to make them. You want me to bring the plans down? So we're on a track to — and those are just not just the subway, not just infrastructure, but I really do love infrastructure projects. It puts a lot of people to work, helps a lot of our companies, the engineering firms, the design firms, the architect that puts a lot of people to work and the result is creating structures that have been just so abandoned and ignored and just taken for granted. It always has to be that way, and I just refuse to accept that. So I'll always find a path for it.

Reshma Saujani: Yeah, I remember we were talking about the Second Avenue Subway when I ran for Congress in 2010. It's like these infrastructure projects have been around for so long. Every time I'm on the Amtrak, I see these expensive trains that my tax dollars went to that're just sitting there.

Governor Hochul: Second Avenue Subway expansion to create what is now a transit desert and bring people the ability to work in the rest of the City has been talked about since 1940. I literally went into the tunnels and they stopped it in the sixties. Because they didn't have enough money or ambition. Yeah and so I said, “No, we're getting this done.”

Reshma Saujani: So take the mood down even more. As of September, the State Budget Director is projecting a $750 million shortfall this fiscal year and a $3 billion deficit next year, much of it due to federal spending cuts. I mean these gaps are having enormous ripple effects for families and businesses. Talk about—

Governor Hochul: Both of those—

Reshma Saujani: The cuts to—

Governor Hochul: No, those are both directly correlated to what happened on July 4th, when the President signed what he calls a beautiful bill. I find it rather ugly when it comes to the impact on New York. Exactly. So, the $750 million was a direct cut to Medicaid for us this year. So, we were having to go look at our agencies, figure it out, trying to just find a path forward. $750 million I have to make up this year, and I have to make up $3 billion next year unless we're going to tell people that they have no Medicaid and it is—

Reshma Saujani: Or no Head Start—

Governor Hochul: Oh no. And the nutrition programs. So here's the problem. We get about $93 billion a year from the federal government, the State does, as part of my Budget. All kinds of programs that have historically been funded — that's just how it is. And we send a lot of money to this federal government. I cannot, as the Governor, backfill cuts to the scale even we're talking about. I just cannot make up for it. So, there are consequences to these actions that must be heard loud and clear. We didn't do this, we didn't ask for this, but I have almost two million people in New York State who are going to be at risk of losing their health care overall. What that does — it'll destabilize our hospitals because people will still get sick and they'll walk in the door and they will not have a Medicaid card to cover it.

Even in our rural areas, I was up in the North Country the other day opening up a brand new facility of 650 jobs we were able to save by bringing in — I digress, I get excited about bringing in jobs, but there's intense anxiety about hospitals. There will be hospitals closing in rural parts of our state, and you don't feel it right here, but most of our state is rural. Most of Upstate, most of our state geographically is by hospitals that are already far apart. You close a few of those. It's going to have a devastating effect on people's ability to get life-saving health care or just preventative care or testing. So, the point is, we have to make people know this. I have 400,000 people that are going to lose it. I already sent out the notices 90 days ago. I'm sorry, nine months from now.

I had to give 400,000 people, right off the bat, they're getting a letter from me that's going to say, if you don't want this to happen, push your member of Congress to extend this or to stop this. So, I don't think New York State should wear this. We'll need to know where this came from, but I'll have to deal with the fallout without a doubt. And it'll have an effect on trying to figure out $3 billion here. That's 3 billion less for other programs that we want to fund and we're talking about. That's what we have to manage.

We'll get through it, but it is absolutely unnecessary at a time when our costs are going up because of tariffs — talk to a farmer in the North Country or around Central New York as I have. The tariffs are making it more expensive for them. They lost their markets in Canada — our biggest trading partner is Canada, $50 billion trade relationship between the U.S. and Canada. And they want nothing to do with us. I'm heading up to Quebec and we are trying to meet some premieres and others to try and reset a relationship. But they still look at it: “We like you New York, but your country wants to take us over.” That's a little hard. I don’t know what I can tell you there. It's a little hard, but they're boycotting our liquor, our stores are, they're not coming over. It is a ghost town in the North Country, our little tourist places all summer long — Lake Placid, Saranac Lake, Lake George. It is devastating and I think people up there are realizing, like this is from Congress accepting the President's plan and there are going to be consequences.

Reshma Saujani: Yeah I hear that from small business owners all the time that are just getting crushed and they don't have a lot of time to figure it out and they can't actually impose the cost on customers anymore because everybody, all, every, everybody's drowning.

Governor Hochul: Inflation is not settling down. We are promised lower prices on day one. Remember that? Lower prices, lower utility. Everybody has promised. If they just stayed the way they were before we'd be okay. We could survive now to go on top of inflation. On inflation. Yeah. And what are we heading in for? Is it stagflation next? Is it, yeah, the long recession? There's just so much uncertainty right now. And I look at life through the perspective of business as well. I look at businesses as my customers, and that's the world I was in before as politics. Businesses aren't going to make decisions without having some clarity, some certainty. They need to know the rules of the road. We can handle it. Just tell us what they are. Are there going to be tariffs on these products? Is my supply chain going to be affected, my supply chain going to dry up or not. And they, that's suppressing a lot of growth here.

I have a council of economic advisors myself, the top, smartest people in the State were in my office yesterday as we try to work through this. And the indicators, again, not anything to do with the State of New York but out of Washington, it's really complicated the ability for businesses to just see clear enough down the road and say, “Yes, we're going to expand our line, we're going to hire more people, we're going to, expand our facility from Downstate up to Upstate.” Everybody's in a holding pattern.

Reshma Saujani: Right.

Governor Hochul: And that is not how business stagnates if it doesn't keep growing.

Reshma Saujani: Yeah, you can't grow without stability.

Governor Hochul: And I want to foster a very pro-business environment. The jobs that are created, the economic benefit, the pride that we have when businesses are here. And I want people to know that I'm going to work very hard. So, people know that they're always welcome in this state and this era of people feeling denigrated because of their success that you know, is not going to come back.

Reshma Saujani: Yeah. So, as we close out, for all the business leaders in this room, what's one ask that you make of them?

Governor Hochul: Stay calm. Seriously. I think we rely so much on the business leaders to have confidence and to understand that there is, at least in the State of New York, I can't speak for beyond New York, that we have calm, steady leadership that understands how important businesses are for my bottom line, number one the revenues we generate, but also just again, I go back to coming from an era when the jobs were just gone and every job mattered and no one could find a livelihood, and it just destroyed so many lives when I was growing up. I never lose it. So, I value businesses for their investments in our state tremendously, and the people that they're giving the dignity of a good job so just stay the course.

Washington will manage. We'll be okay with the city, the next mayor, I assure you, we're going to be okay and I don't want you to make a decision. And some have said we might leave the state. You don't have to. You don't have to. You'll regret it because all the action right here in New York.

Reshma Saujani: All the vibes are here. That's right. Thank you, Governor.

Governor Hochul: Alright. Thank you.