Policy Alert: New York State Passes FY26 Budget

Yesterday, state lawmakers passed the $254B FY26 state budget, reflecting an increase of $17B from FY25. The budget was passed over five weeks after the deadline of April 1, and will be retroactively in effect from April 1, 2025 to March 30, 2026. Governor Hochul’s statement on the budget is available here and Speaker Heastie’s statement is available here.

State leaders expect that they may need to return later this year to update the budget in response to actions taken on the federal level. Some key highlights of the state budget are listed below. Please reach out to any of the Cozen Public Strategies New York team for additional information on specific provisions.

Taxes/Refunds:

• Tripled child tax credit: up to $1000 for families with a child under 4
• Inflation refund checks: $200 for individuals, $400 for families
• Extension on “millionaire tax” through Fiscal Year 2032
• Increased payroll mobility tax to increase to 0.055% – 0.895% on NYC-area companies
• NYS to pay $7B of unemployment insurance debt for businesses

Child Care:

• $110M to build and renovate child care centers
• $400M for child care vouchers

Public Safety:

• $370M for gun violence prevention
• $35M for security enhancements at places of worship targeted by hate crimes
• Increased criminal penalties for crimes committed while wearing a mask
• $77M for redeployment of 300 NYPD members for subway safety
• Eases discovery requirements for how prosecutors hand over evidence to criminal defendants in the pre-trial phase

Mental Health and Healthcare:

• Expanding involuntary commitment laws
• Expanding Kendra’s Law to ensure long-term mental health treatment
• $425M increase to Medicaid payments for hospital outpatient treatment operations
• $445M increase for Medicaid payments for nursing homes

Education:

• “Bell-to-bell” cell phone ban in schools
• $37B toward investment in schools

Housing:

• 90-day ban on private equity bidding on single- and two-family homes
• $1 Billion for City of Yes, previously agreed upon between NYC and NYS
• $50M for a four-year pilot of the Housing Access Voucher Program

MTA Capital Plan:

• Redirecting $1.2B from Penn Station
• Fully funded $68B capital plan, funding projects like the Interborough Expressway, additional Metro North stations, and repairs

Local Investment:

• $50M for financial assistance to cities and towns
• $400M for Albany downtown revitalization

Miscellaneous:

• $500M for clean water and flood control infrastructure
• Changes to the state’s campaign finance matching system: state to now match the first $250 of any donation up to $1050 (currently donations larger than $250 are disqualified from matching funds)
• Allows candidates for Governor and Lieutenant Governor to run together as a ticket, rather than in separate primaries
• Makes it a violation of law to utilize personalized algorithmic pricing without disclosure to consumer, with a carve-out for rideshare services
• Changes to fees for cannabis businesses who operate recreational and medicinal operations

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