All decisions in the New York state budget — due April 1 — depend on one central question: How much money does the state have to spend? The answer to that question is determined by how the state structures its taxes, and how much it plans to save.

In recent years, the legislature has favored more spending and higher taxes on the wealthy. Governor Kathy Hochul has opposed some tax hikes on high earners, and as a result, proposed smaller budgets. She has also pushed to save more cash in the state’s “rainy day” funds, while the legislature has called for greater spending on current needs.

This year continues both of those trends.

Here are the key proposals on taxes and other questions that will determine the shape of the budget this year.

Each year, New York Focus reporters examine how lawmakers will spend over $230 billion in public money as lawmakers negotiate over the state budget. New York’s budget is bigger than those of most countries, and outpaces every other state except California.

At stake are key questions for New York’s future. Will the state move forward with a plan for cap and invest? How much will the state invest in child care benefits to support families with rising costs? How will lawmakers negotiate over Hochul’s proposal for increased involuntary commitment as a response to mental health crises?

With the houses of the state legislature introducing their budget proposals this week, negotiations over these issues are kicking off in earnest.

In the coming weeks, New York Focus reporters will continue to closely cover the secretive process through which the state’s enormous, far-reaching budget is made. We’ll be analyzing dueling priorities, providing updates on the progress of negotiations, and explaining what it all means for New Yorkers across the state. First, we wanted to give readers a refresher — or introduction — to how the budget process works and why it matters, and to answer some questions from our newsletter subscribers. Buckle in!

At the center of Governor Kathy Hochul’s agenda this year is what she bills as a “middle-class tax cut” — but about half of those cuts will go toward New Yorkers who by some measures aren’t considered middle class.

According to an analysis shared with New York Focus by the liberal think tank Fiscal Policy Institute, the top 20 percent of earners statewide would receive the largest share of the tax cut’s benefits. More than half of the savings for joint filers would go to households making over $154,000 — nearly twice the state’s median household income. A commonly cited income cutoff for middle-class households, meanwhile, is just under $163,000.

In their 2025 budget plans released Monday, the state Assembly and Senate proposed hundreds of millions of dollars in new spending to help parents afford child care and to provide a wage boost to workers in the industry. The proposals would still invest less than what advocates and New York City officials say is needed to avoid an imminent funding shortfall that will result in thousands of children each month losing access to the state’s child care assistance program.

The proposals come nearly two months after Governor Kathy Hochul, New York’s self-proclaimed “first mom governor,” put forth her own budget plan that did not include new investments in child care assistance or worker wages. Hochul instead proposed creating another task force to study the issue, saying she wants to “put our state on a pathway to universal childcare.”

The Assembly proposed increasing the state’s investment in the Child Care Assistance Program, a voucher system that helps people who are working or in school afford child care, by $213 million. The program is largely funded by a federal block grant and the state.

The Senate proposed creating a $500 million “workforce retention grant” to provide a wage boost to child care workers, who are some of the lowest-paid employees in the state. Over the past two years, child care workers in New York received a small bonus from the state, paid for with federal pandemic funds. Legislators say that failing to provide another bonus this year would mean the workforce gets a pay cut.

Child care “is a campaign item,” said Pete Nabozny, policy director at the Rochester-based advocacy organization The Children’s Agenda. “But we’re not seeing the attention from the budget process that would match the attention from people who are running for office. It’s very frustrating, because we know what would help many more families access care — it’s funding.”

If Albany is planning to rally against the Trump administration’s attack on its climate plans, it’s not showing in the budget.

In New York, the governor sets the budget agenda. That’s particularly clear on climate this year. Breaking two years of promises, Governor Kathy Hochul in January dropped the climate funding program known as “cap and invest” from her 2025 agenda. Her agencies have been writing the rules to structure the carbon pricing program, but the legislature would likely have needed to approve spending the resulting revenue — about $3 billion a year and growing — setting up what could have been a major budget fight.

Hochul effectively brushed that plan off the table, and the legislature isn’t making any big moves to bring it back.

In the place of the permanent program, Hochul offered a one-time, $1 billion budget line to fund a variety of climate initiatives over the next five years. The Senate and Assembly have both accepted that amount, though they want more guardrails on how it’s spent. Hochul’s proposal lists a few broad areas she wants to fund, like renewables and building retrofits, but gives little further detail.

The Senate wants to give legislative leaders a chance to review the governor’s spending plan. The Assembly has gone further, divvying the $1 billion between seven programs advancing building decarbonization and electric vehicles, particularly school buses and charging infrastructure.

“The governor and Senate have a slush fund, the Assembly makes clear allocations,” said Liz Moran, Northeast policy advocate at Earthjustice, in a text message.

New York’s struggling nonprofits may get some overdue relief in this year’s budget.

Nonprofits form the backbone of the state’s social service sector, providing contracted services from mental health counseling and disability assistance to homeless shelters and other supportive programs. But providers have long complained of a system teetering on collapse due to chronic underfunding and perpetual understaffing.

Under Governor Kathy Hochul, the sector has received annual cost-of-living raises for the first time in years — a departure from the Cuomo administration. This year, Hochul is calling for a modest 2.1 percent increase, while the legislature’s budget proposals include a 7.8 percent increase that would more than double costs to $576 million. Groups like New York Disability Advocates are pushing for the higher raise in the hopes of reversing crippling turnover and high vacancies.

In a similar vein, an update will likely be made to New York’s oldest supportive housing model, where funding rates have remained nearly unchanged since the program’s inception in 1987. The State Supportive Housing Program (NYSSHP) includes over 20,000 permanent units that have fallen into disrepair with “leaky roofs, faulty elevators, and recurrent floodings.”

Under the governor’s and legislature’s proposals, the program could see reimbursement rates rise by at least 40 percent. Advocates say the program has been “slowly imploding for decades” with a third of nonprofit providers closing their doors, consolidating, or exiting the program entirely.

New York’s legislature set Albany on a criminal justice collision course when it released its annual budget counter-proposals Tuesday. Both the Senate and the Assembly omitted Governor Kathy Hochul’s central policing and prosecution policy priorities, even as the chambers embraced her proposals to increase oversight of the state’s embattled prison system.

One of Hochul’s priorities this year is to once again alter New York’s 2019 criminal justice reforms. After twice pushing through changes that made it easier for judges to jail criminal defendants before trial, the governor is now targeting reforms that require prosecutors to share evidence with those defendants in a comprehensive and timely manner.