New York State Budget

Money for Families: State of the State 2025

Hochul says she has a plan to make New York affordable, through tax cuts and payments to families.

Julia Rock · January 15, 2025

Polls show that cost of living is a top issue for New York voters. | Photos: Governor Kathy Hochul; Fat Camera / Canva | Illustration: Leor Stylar

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New York’s future depends on “the ability of every family to afford the essentials of life,” Governor Kathy Hochul proclaimed in her State of the State speech Tuesday.

The governor unveiled her agenda at a moment when she faces low approval ratings and likely challengers ahead of the 2026 statewide election. Polls show that cost of living is a top issue for New York voters and that negative perceptions of the economy hurt Democrats in the presidential election last fall.

Hochul proposed a slew of policies to transfer cash to New Yorkers, including an “inflation refund” of up to $300 for individuals and $500 for couples, as well as tax cuts for more than three-quarters of taxpayers.

Families are at the center of her affordability agenda this year. Parents have moved out of New York at a faster rate than people without children in recent years, a big reason why New York is losing population more rapidly than any other state.

The self-proclaimed “first mom governor” proposed increasing the state’s child tax credit, tripling the maximum amount that families can receive to $1,000 per child under four.

Photo collage of Kathy Hochul hugging a young child, background image of tax forms.

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New York has among the highest child poverty rates in the country, with nearly one in five kids living in poverty. That number fell by more than 40 percent when the federal child tax credit was temporarily expanded in 2021, but increased again when the measure expired.

The state’s Child Poverty Reduction Advisory Council, set up by a 2021 state law to cut child poverty in half, recently proposed increasing the state’s child tax credit to a maximum of $1,500.

Hochul also wants to create a “birth allowance” to send cash to new parents and pregnant people who are already receiving public assistance from the state. (The governor has not specified what type of “public assistance” would qualify parents for the allowance.) That would send $100 per month to pregnant New Yorkers, plus a one-time $1,200 payment upon birth.

The plan mirrors recent proposals from state lawmakers on both sides of the aisle.

“We have been building the conversation around guaranteed income during pregnancy for two years now in Albany, and I am thrilled to see the Governor announce her support,” said Senator Jessica Ramos, who sponsors legislation to send payments to mothers during pregnancy and after birth.

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“I’m glad the Governor is taking the needs of working families seriously and proposing ways to put extra money in their pockets,” said state Senator Andrew Gounardes, who backs similar legislation and wants to expand tax credits for families.

Hochul also said she would tackle the sky-high cost of child care and lack of options for parents. In past years, the governor has increased funding for child care subsidies but rebuffed requests from the legislature for bigger investments.

This year, she proposed a $110 million state investment to help construct and renovate child care centers.

She said she wants to “partner with the legislature and put our state on a pathway to universal childcare,” but did not specify what that would entail. Her State of the State briefing book proposed creating a coalition of “businesses, unions, tax and revenue experts, and child care providers” to “identify a responsible and sustainable path toward funding universal child care in New York.”

Neither her speech nor briefing materials mentioned new investments in child care assistance or the child care workforce, where low wages and cash-strapped providers have contributed to shortages of workers. (She did propose creating a “pool” of substitute workers to ensure that services are not disrupted when regular staff are ill or absent.)

Advocates say much more is needed to get the state on a path to universal child care. “Advisory councils won’t pay for child care or keep families in New York,” said Rebecca Bailin, executive director of New Yorkers United for Child Care, which advocates for universal child care.

“Governor Hochul has consistently negotiated against the legislature’s proposed child care investments,” state Senator Jabari Brisport, who chairs his chamber’s Committee on Families and Children and has backed investments in universal child care. “Today she claimed she finally wants to work with the legislature on passing universal child care; we’ll see if the Universal Child Care Act is actually included in her final proposal, but I’ve seen nothing to suggest her actions will match her words.”

Some critics question whether her overall agenda will address the root causes of the state’s cost-of-living crisis.

“The governor’s policy agenda lacks a strategy for structural economic reforms that would lower the cost of housing, healthcare, and childcare—instead committing billions of dollars to one-time payments and tax cuts,” said Nathan Gusdorf, director of the Fiscal Policy Institute, a center-left think tank.