The status of the new New York State budget of $268 billion for fiscal year 2026-2027 remained uncertain on May 8 after Democrat Gov. Kathy Hochul announced that a deal on the budget had been reached with state legislators and Democrat Assembly Speaker Carl Heastie said there is no deal and he was fed up with Hochul making her legislative agenda part of the budget.
The state budget was due by April 1, but agreement between the executive branch and legislative branch could not be reached. On May 7, however, Hochul announced that an agreement had been reached. Her announcement spurred Heastie to tell reporters at the State Capitol that there is no deal and that budgets are supposed to deal with money and not be a way to push a legislative agenda.
Heastie said there’s something wrong with New York’s budget process. He said that he would never again go through the same process. Several Democrat members of the Assembly quickly came out in support of Heastie.
When she made her budget announcement, Hochul claimed that an agreement had been reached with legislative leaders on key priorities in the budget. These included no increases in income or statewide business taxes.
“I promised a budget that works for working people and expands opportunities for all New Yorkers and I was not going to back down from that fight,” Hochul said. “Alongside my partners in the Legislature, today we are delivering on that promise. This budget includes sweeping changes to lower costs, enhance public safety, protect our communities from federal overreach and invest in the future of New York families.”
The budget contains a provision that prohibits Immigration and Customs Enforcement (ICE) agents and other law enforcement personnel operating in New York state from wearing masks and failing to have visible identification except in special circumstances such as undercover operations.
It also prohibits local law enforcement from being deputized by ICE for federal civil immigration enforcement and bars state and local police from acting as civil immigration agents. It prohibits using taxpayer-funded resources or personnel to carry out federal civil immigration enforcement and detention. It establishes a state right to sue federal, state, and local officials, including ICE officers, for constitutional violations.
It denies ICE permission from entering sensitive locations – including schools, libraries, health care facilities, polling locations, and homes – without a judicial warrant.
It strictly prohibits the use of state, local or school civil resources — including employee time — for civil immigration enforcement activities. The budget also contains a provision ensuring that all students can access education without fear of ICE interference, codifying the right to a free public education regardless of immigration status.
The new budget contains funding for providing affordable child care to up to 100,000 additional children. Funding is increased by $1.7 billion bringing the total spending to $4.5 billion for child care and pre-kindergarten services statewide.
The budget as announced by Hochul contains what she described as common sense legislative reforms that will ensure bad actors and fraudsters cannot exploit the automobile insurance system and will hold insurers accountable to ensure that their savings are passed on to consumers.
The budget would: cap payouts for drivers engaging in criminal behavior at the time of the incident, including uninsured motorists, drunk drivers, and drivers in the act of committing a felony; better define what actually constitutes a ‘serious injury’ so that damages for pain and suffering or emotional distress are reserved for those able to objectively demonstrate that they have suffered a serious injury; ensure that if a driver is found to be mostly at fault for causing an accident, they cannot claim outsized payments for damages; prevent insurance companies from exorbitantly raising rates by setting a legal threshold that prevents excess profits and returns savings to consumers.
Hochul’s final budget includes a one-time, $1 billion energy rebate to provide relief to New Yorkers dealing with rising energy costs.
The budget includes reforms to cut red tape and speed up the building of housing and infrastructure project by making changes to the State Environmental Quality Review Act (SEQRA) that would expedite the type of projects that have been consistently found not to have any significant environmental impacts. The changes include setting a maximum two-year timeline to complete an environmental impact statement.
The budget also includes legislation designed to protect children from online predators, scammers and artificial intelligence used in online platforms. It would require children under age 13 receive parental approval for new connections on online gaming platforms.
The budget as presented by Hochul also includes legislation requiring the development of regulations to ensure that every 3D printer sold in New York includes technology that blocks it from printing a firearm. There also would be higher criminal penalties for manufacturing ghost guns.
The budget allocates $352 million for gun violence prevention programs, $77 million to assist the New York City Police Department in policing the subway system, $25 million to expand the MTA’s SCOUT program responding to severe mental illness in the subway system from 10 to 15 teams, and $35 million for Securing Communities Against Hate Crimes grants.
The budget eliminates New York state income tax on tipped wages up to $25,000 per year and provides $395 million for free breakfast and lunch for every K-12 student in New York.
The budget creates the state’s first Pied-a-terre tax program, a targeted surcharge on high value second homes and investor-owned apartments worth $5 million and up in New York City, expected to generate at least $500 million in tax revenue annually.
When Hochul announced a “conceptual agreement” budget deal, she expected the legislature would pass bills that will fully enact the agenda “in the coming days.” As of May 8, the timetable for adopting a new budget was unclear.
