New York State Passes FY25 Budget

April 22, 2024

This weekend, state lawmakers passed the $237B FY25 state budget, reflecting an increase of $8B from FY24. The budget was passed more than two weeks after the deadline of April 1, and will be retroactively in effect from April 1, 2024 to March 30, 2025. Governor Hochul’s statement on the budget is available here, Speaker Heastie’s statement is available here, and Senator Stewart-Cousins’ statement is available here.

Some key highlights of the state budget are listed below. Please reach out to any of our team members for additional information on specific provisions.

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  • Creates a new 485-x tax incentive to build housing
    • Projects that receive the 485-x tax break will be required to pay unionized construction workers higher wages and benefits
    • 485-x incentive will sunset in 2034
  • Six-year extension to complete projects previously approved under the expired 421-a
  • Lifts a density cap on New York City residential buildings based on the size of the lot
  • Incentivizes office conversion into housing
  • Eliminates state-imposed density restrictions in Manhattan
  • Creates a pilot program for basement apartments, restricted to specific areas of the Bronx, Manhattan, and Brooklyn
  • $140M for the New York City Housing Authority
  • $80M for the Mitchell Lama program


  • Establishes “Good cause” eviction tenant protections
    • Will only apply to NYC and municipalities outside NYC that “opt in” to good cause eviction
    • Includes carve-outs for high-rent units and apartments owned by smaller landlords
  • Creates incentives for multifamily housing and accessory dwelling units
  • Provides $650M for pro-housing communities statewide
  • $150M for New York Housing for the Future Program, allowing for housing development on state and municipally owned sites, along with sites owned by nonprofits and Community Land Trusts
  • Provides $500M for up to 15K units on state-owned sites
  • $75M for public housing authorities outside NYC

Asylum Seekers

  • Provides $2.4B to support NYC’s accommodation of asylum seekers

Public Safety

  • Provides $347M to drive down gun violence in the state
  • Provides $40M for retail theft teams in the State Police and local law enforcement
  • Expands list of hate crime-eligible charges: assaulting a retail worker has become a Class E felony
  • Includes a provision to aggregate connected retail theft crimes over a period of time, allowing prosecutors to charge offenders with more serious offenses
  • Creates crime of “fostering the sale of stolen goods” as a Class A misdemeanor
  • Provides $36M to prosecute domestic abuse
  • Provides $35M to thwart hate crimes
  • Allows NYC to reduce its speed limit to 20 mph on many City Streets


  • Establishes state and local power to padlock doors of illegal cannabis vendors for up to one year during due process
  • Removes potency tax on cannabis, replacing with a 9% sales tax
  • Reduces the medical excise tax on cannabis from 7% to 3.5%


  • School aid to increase to $35.9B, including $24.9B in Foundation Aid
  • Provides funding for the Back to Basics reading curriculum
  • Adjusts the School Funding built-in rate of growth for FY25, and directs the Rockefeller Institute to examine funding formula
  • Increases minimum award and raises income limits for Tuition Assistance Program
  • Extends Mayoral Control of NYC schools through June 30, 2026
    • Any NYC budget must include funding and provisions to ensure that class size requirements are met, with Foundation Aid funding withheld if the city does not comply.

Mental Health & Healthcare

  • State will bar all fiscal intermediaries for the Consumer Directed Personal Assistance Program besides one, with the goal of cutting down on fraud and saving $200M in Medicaid costs annually
  • Provides $19M for mental health support for school-aged children
  • Changes standards for reimbursement and out-of-network mental health coverage
  • Provides for investment in public swimming through NY Swims program
  • Provides $3B to support distressed hospitals
  • Provides $20B for health care infrastructure
  • Increases Paid Medical Leave and creates a new requirement of 20 hours of prenatal leave for pregnant employees
  • Increases home care worker minimum wage
  • Permits the State Health Commissioner to apply for a federal waiver to impose a tax on managed care plans
  • Increases in the rate of Medicaid reimbursement to hospitals, nursing homes, and healthcare providers


  • Provides $25M for planting trees
  • Provides $500M for Clean Water Infrastructure Act
  • Provides $50M temporary assistance for municipalities

Workforce Development

  • Provides $275M (in addition to $125M in private funding) for constructing a new Empire AI Consortium
  • Provides $200M for four new workforce development centers

Aid to Municipalities

  • Provides $758M for Aid and Incentive for Municipalities funding – tied to specific grant programs and tax credits requiring state approval


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