On Tuesday, January 20, Governor Kathy Hochul released her Fiscal Year 2027 Executive Budget Proposal, outlining a $260 billion spending plan she says is designed to make New York more affordable, protect core services, and brace the state for uncertainty from Washington, all without raising income taxes.
The Governor’s plan maintains a balanced budget and preserves more than $14.6 billion in state reserves, while keeping New York’s AA+ credit rating, which is its strongest since 1972. State officials project revenue growth of nearly 10 percent, allowing the administration to fund new initiatives while preparing for potential federal funding cuts.
As anticipated, many of the initiatives Governor Hochul mentioned during her State of the State address were included in the spending plan, which centers on affordability for working families, anchored by a major expansion of childcare funding. Hochul is dedicating $4.5 billion statewide to childcare and pre-kindergarten services, including $1.7 billion in new investments. The plan expands childcare vouchers, boosts funding for New York City’s 2-Care program, pilots new childcare initiatives in several counties, and enhances the Child and Dependent Care Credit. Additionally, proposals to reform the state’s auto insurance and homeowner insurance laws, address utility costs, and eliminate state income taxes on tipped wages, up to $25,000 annually, beginning with the 2026 tax year were included.
Education remains a major focus, with $39.3 billion in school aid — the highest level in state history — and guaranteed increases in Foundation Aid for every district. The budget continues universal free school meals, expands universal pre-kindergarten, supports library construction, and includes funding to maintain a tuition freeze at SUNY and CUNY four-year campuses.
Hochul’s proposal also commits to protecting access to health care amid federal retrenchment. The budget includes $38.2 billion for Medicaid, new capital investments for safety-net hospitals, funding to protect reproductive health care access, and expanded mental health and emergency preparedness initiatives.
Housing and infrastructure investments feature prominently as well. The governor is advancing her “Let Them Build” agenda with new capital to accelerate affordable housing construction, support homeownership, and expand rental assistance. Transportation funding includes continued operating aid for the MTA, investments in local roads and bridges, and early funding for major transit expansion projects.
Public safety, clean energy, economic development, and food security are also addressed, with proposals to crack down on the manufacture and sale of ghost guns, continue funding gun violence prevention initiatives and law enforcement, provide additional funding for the Hunger Prevention and Nutrition Assistance Program and Nourish New York Program, establish the NY PLATES Program, continue funding clean water and energy infrastructure, and modernize the state’s alcoholic beverage control law by streamlining licensing, making movie theater alcohol licenses permanent and adding new types of licenses for airport lounges, cafés, hotel concessionaires, higher education institutions, and early morning sports bars.
The budget now heads to the Legislature, where lawmakers have begun Joint Legislative Budget Hearings. The first Hearing, which was for Agriculture & Markets/Parks & Recreation was on Tuesday, January 27. Hearings will continue through Thursday, February 26. The full schedule of Joint Budget Hearings can be found here: https://assembly.state.ny.us/Press/?sec=story&story=116497
Once Budget Hearings are complete, the Assembly and Senate will each release their One House Budget Proposals in March, after which the Governor and legislative leaders will negotiate to determine the final spending plan due April 1.