What’s in the 2026 State Budget? Here’s What To Know.

Total spend: The total sum the state expects to spend over the next year is $269 billion. That’s more than what the governor ($260 billion) and Assembly ($266 billion) proposed spending, and nearly what the Senate proposed ($270 billion).

Tax the rich? The budget does not hike personal income taxes or corporate taxes, despite a push by New York City Mayor Zohran Mamdani and both legislative chambers. It does extend a pandemic-era corporate tax hike by three years — maintaining the current 7.25 percent rate through 2029.

Rainy day fund: While an exact figure for how much money is in the state’s rainy day fund isn't public yet, Budget Division spokesperson Tim Ruffinen said it’s about $15 billion, roughly the same as when the budget process started.

Public pensions: The state’s major public sector unions won significant boosts to their workers’ pension plans. Public school teachers will now be able to retire at 58 with full pensions. Many public employees will have their pension payments boosted, and their required contributions to the state pension fund lowered.

The Department of Budget has estimated that this change will cost $557 million per year. Most of that cost is expected to fall on local governments and school districts, which generally had opposed the change.

Foundation Aid: Lawmakers were successful in their push to revise the state’s complicated school funding formula to better address the needs of vulnerable student populations.

While Governor Kathy Hochul’s executive proposal left the Foundation Aid formula unchanged, the final budget adds a new weight for students who are homeless or in foster care and increases funding for English language learners. Districts will also receive a funding boost of at least 2 percent over last year, bringing the total Foundation Aid allocation to $27.4 billion.

CUNY funding: Funding for the City University of New York system will stay roughly the same as last year, at $6.7 billion, including over $650 million to support capital projects and infrastructure improvements. Hochul’s budget would have allocated $6.4 billion to the system, while the Senate proposed $8.3 billion and the Assembly $15.1 billion.

The final budget appropriates $15.1 billion for the State University of New York system, a decrease from last year. The allocation is in line with what Hochul had proposed, but less than the $16.5 billion proposed by the Senate and $25.6 billion by the Assembly. Most of the money will support operations at SUNY’s state-run campuses, statutory colleges, and hospitals.

Back to Basics: The budget builds upon Hochul’s Back to Basics reading initiative by launching a similar effort in math instruction to boost academic outcomes statewide. The law directs the State Education Department to establish best practices for teaching math to elementary school students by January, and school districts will have until September 2027 to review their curricula and instructional materials to ensure alignment with the guidance.

Mayoral control: The budget includes a two-year extension of mayoral control of New York City’s school system, which was set to expire in June. The agreement falls short of the four-year extension Hochul proposed at the request of Mayor Zohran Mamdani’s administration, which argued that the city’s compliance with a 2022 state law to reduce class sizes hinged upon the continuation of the centralized governance system. Neither the Senate nor the Assembly included an extension of mayoral control in their budget proposals.

Medicaid: Figures for the state’s total Medicaid spending were not immediately available, but health care advocates noted the budget contains hefty reimbursement rates for health care providers like hospitals. The budget does not provide a solution for the estimated 450,000 New Yorkers who will be disenrolled from the Essential Plan in July, despite last-ditch efforts by lawmakers to get the state to cover this population.

Food assistance: The budget cements the governor’s proposals to fund two programs that support the state’s vast network of emergency food providers: the Hunger Prevention and Nutrition Assistance Program at $72.8 million and Nourish NY at $55 million. Both figures are lower than what the legislature wanted.

The budget increases funding for the state’s network of community-based navigators, which help residents apply and certify for the Supplemental Nutrition Assistance Program, to $8.7 million, a boost from Governor Kathy Hochul’s proposal of $3.7 million.

Human services raises: Human services providers contracted by the state will see a 2.7 percent increase in payments. Nonprofits provide a range of critical services like emergency shelters, but have been fettered by stagnant wages. The budget does not specify how much of the 2.7 percent will go toward worker salaries.

The budget also doesn’t take up efforts by lawmakers to expand the number or type of programs included in the annual bump, like domestic violence programs, which have been historically excluded.

Workforce raises: The budget does not boost pay for child care workers, who earned an average salary of $37,675 last year in New York — lower than 96 percent of jobs in the state. The Senate had proposed a $500 million workforce compensation fund to help supplement salaries. Advocates argue that higher wages are key to overcoming the provider shortage and enabling the rollout of new, high-quality universal child care programs. 

Statewide pre-K: New York has long subsidized public pre-K, but thousands of children still lack access because their districts have limited seats or don’t offer the program at all. This year’s budget includes a requirement that school districts serve all interested 4-year-olds in full-day pre-K by the 2028–29 school year. The $1.6 billion investment will nearly double the state’s minimum per-pupil contribution to at least $10,000.

Child Care Assistance Program: The final budget contains over $3 billion in child care subsidies, including $1.2 billion in new, recurring funding to the state’s voucher program, which helps low- and middle-income families with children between 6 weeks old and 13 years old afford child care. As of early May, 31 counties and New York City were not enrolling eligible parents into the program due to insufficient funding.

Advocates were unsuccessful in urging the state to add an additional $1.2 billion to meet demand, which has grown statewide but especially in New York City, where the voucher waitlist now exceeds 24,000 children. 

New York City child care: As part of Governor Kathy Hochul and Mayor Zohran Mamdani’s landmark child care deal, the state will provide New York City with $73 million to launch 2,000 2-K seats in four neighborhoods this fall. The plan will also invest $205 million to expand access to the city’s 3-K program, which has struggled with uneven seat distribution, accessibility gaps for students with disabilities, and funding cuts under former Mayor Eric Adams.

Cutting red tape: The final state budget will allow many new housing developments to bypass the State Environmental Quality Review Act, which requires a burdensome process that can delay new housing by months or years. Certain buildings with up to 500 apartments in New York City, and up to 100 in most of the rest of the state, will be able to skip the review, though they will still have to follow other environmental regulations and zoning rules. The measure will also make it easier to build parks, schools, and water infrastructure.

Public housing fixes: The budget directs $140 million toward fixes and upgrades in New York City’s badly deteriorating public housing. The New York City Housing Authority estimated that it needs $80 billion to clear its repair backlog.

Affordable housing tax break: The budget will encourage renovations of affordable housing by allowing New York City to renew a measure that offers landlords a tax break equal to the cost of the renovation. Only buildings with a significant number of affordable apartments will be eligible.

Prison funding: The state budget sets aside $535 million for “stabilizing” the state prison system, which is still recovering from a three-week strike that guards launched last February. The pot is largely discretionary, subject to a plan from the prison commissioner and approval by the budget director.

While boosting prison funding, the state is wavering on funding it had dedicated to prison oversight. The Correctional Association of New York, a nonprofit prison oversight organization, was expecting to receive $3 million to continue initiatives it launched in the wake of the strike and two killings by guards. The final budget allocates only $2 million, though the association told New York Focus that the governor’s office vowed to make up the difference outside of the budget process.

Prison reforms: Neither the Senate’s nor the Assembly’s prison reform proposals made it into the final budget. The Senate’s budget plan included a version of the CARE Act, which would establish a bill of rights for pregnant incarcerated people. The Assembly proposed ordering the State Commission of Correction, another oversight body, to hire a chief medical examiner to conduct independent investigations into jail and prison deaths.

Houses of worship protests: The final budget will make it a misdemeanor to block access to a house of worship or do anything within 50 feet of one that puts someone “in reasonable fear for their safety.”

Initially, Governor Kathy Hochul proposed a bill in her executive budget that would ban protests within 25 feet of the entrance of a house of worship. The proposal garnered pushback from free speech proponents, including the New York Civil Liberties Union.

In their respective proposals, the Assembly fully axed the measure, while the Senate proposed a different bill that would only make it a misdemeanor to obstruct the entrance to a house of worship.

Ghost guns: Hochul faced relatively little pushback on her headline criminal justice proposal this year: legislation to curb the proliferation of 3D-printed “ghost guns.” The final budget makes it a felony to buy, sell, or manufacture ghost guns, or to create or distribute printing code to make them. It will also require 3D printers to include software aimed at blocking users from manufacturing ghost guns.

New York City subway policing: New York City’s reported subway crime hit a 16-year-low last year. The budget still funnels an additional $77 million to the New York City Police Department to ramp up subway patrols.

Parole and sentencing reforms: Reforming New York’s parole and criminal sentencing laws has been a top goal of the state’s criminal justice reform movement for years, but none of advocates’ priority bills have made it into past years’ budgets or moved to a vote in the legislature during the regular session. This year has so far been no exception: The final budget does not include legislation that would release elderly prisoners, let incarcerated people earn time off their sentences, or make it easier for the parole board to grant parole. And those bills face a steep climb to passing in the regular annual session, which is scheduled to end in just a few days.

Climate rollbacks: Climate law negotiations were an extraordinary example of the enormous power the governor wields in New York’s budget process. Changes to the law were not on the table at the start of budget season, and lawmakers initially voiced staunch opposition to proposed changes — but by the end of the process, Governor Kathy Hochul successfully dismantled some of the law’s key components.

The amended law gives the state two more years to issue regulations for reducing greenhouse gas emissions, drops the 2030 deadline to reduce emissions by 40 percent from 1990 levels, and changes the state's emissions counting math. It also adds an interim, nonbinding target of 2040 to achieve a 60 percent reduction, and keeps in place the mandate to achieve near net zero by 2050. 

Climate funding: Like last year’s budget, the deal includes $1 billion for climate mitigation and adaptation projects through the “sustainable future program.”

Utility bill relief: After a push by lawmakers, the budget includes $1 billion in utility rebate checks — one-time credits of up to $200 for joint filers and $100 for single filers. It’s the latest example of the state’s growing penchant for one-off handouts.

Utility reforms: The budget includes most of Hochul’s proposed reforms to the way the Public Service Commission regulates utilities. Lawmakers agreed to Hochul’s proposal to tie executive pay at utility companies to new affordability metrics. They also signed off on Hochul’s reforms to the rate hike process, including requiring utilities to justify any “major” hikes as necessary for safety, reliability, or affordability.

Empower+: The budget sets aside $200 million for Empower+, which helps cover home efficiency upgrades for low- and moderate-income households, similar to last year’s funding level.

The future of the energy affordability program, which has served tens of thousands of New Yorkers, was thrown into limbo last summer when state officials warned funding would be slashed by more than half. Hochul initially proposed $50 million for the program in January.

Excelsior Power: This program, which will give New Yorkers credits on their bills if they install smart thermostats, was funded with the $33 million that Hochul had proposed. Smart thermostats can be used as part of “virtual power plants” — networks of smart devices that utilities can tap into to smooth out energy demand. 

The legislature added some guardrails: Customers have to opt into the program, and can override their smart thermostats during extreme heat or cold events without paying any penalty. 

Environmental protection and clean water funding: The budget preserves Hochul’s proposal to renew New York’s Environmental Protection Fund, which conserves state lands and waters, at $450 million — countering the legislature’s attempt to increase the amount to $500 million.

And the budget largely enacts Hochul’s initial proposal of $750 million in clean water funding, with the exception of $25 million that it moves from housing-related projects to the state’s core water infrastructure program. In the final deal, that infrastructure program received $525 million, and housing-related initiatives got $225 million.

Immigration legal services: The budget allocates about $74 million to the Office of New Americans to pay for legal representation for people in immigration proceedings. That’s a $10 million increase over last year, but falls well below the $183 million the legislature had proposed to ensure immigrants caught up in Trump’s deportation dragnet could access lawyers.

Bivens Act: This law codifies the right to sue law enforcement officers, including federal immigration agents, for civil rights violations. The measure applies retroactively to any conduct that occurred after January 1, 2025. Governor Kathy Hochul advocated for this provision after Immigration Customs Enforcement agents fatally shot two US citizens in Minneapolis and after the death of a Burmese refugee who was released by Customs and Border Protection in a parking lot on a cold winter night in Buffalo.

Sensitive Locations Protection Act: The budget includes legislation that enshrines in state law that private locations — including churches, hospitals, schools, and homes — may deny entry to federal immigration officers unless they have a warrant.

ICE collaboration: After months of tense negotiations, the governor’s Local Cops, Local Crimes Act won out over the more expansive limits on collaboration sought by legislative leaders. The final language prohibits 287(g) agreements that deputize local law enforcement agencies to conduct immigration enforcement for ICE, and stops local jails from detaining people for civil immigration violations. But the measures don’t limit the more informal collaboration and information-sharing through which New Yorkers have been handed over to ICE or CBP following routine traffic stops or minor criminal charges.

City taxes: The budget does not give New York City permission to raise its personal income or corporate tax rates — an idea that Mayor Zohran Mamdani floated after campaigning on statewide hikes. The only new city levy is a pied-à-terre tax, which will apply to second homes worth $5 million or more. It aims to raise about $500 million annually for the city, though some experts predict it may bring in substantially less.

Free buses: The budget does not make city buses fare-free, a measure that Mamdani campaigned on. It also includes no new pilots to make individual bus lines free, as the Assembly had floated in its one-house budget.

State aid to the city: The city will benefit from several cost shifts that Mamdani pushed for. The state will stop withholding sales taxes, which it has used to help shore up distressed hospitals; raise the city’s reimbursement rate for public health services; and take on costs for line-of-duty Fire Department deaths. The state also gave the city permission to delay some pension payments, which will save the city billions in the short term — but statewide changes to the Tier 6 pension plan are projected to cost the city more than $100 million next year alone.