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New York nears agreement on $237 billion budget: What’s inside it?

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  • Staff Report 

Governor Kathy Hochul and New York legislative leaders reached a preliminary agreement on a state budget totaling $237 billion, an increase from the initial $233 billion proposal. Announced on Monday, the budget includes significant investments in housing, education, and public safety.

Key highlights include a comprehensive housing plan termed the “most comprehensive… in three generations” by Hochul, featuring new tax incentives and a $500 million allocation for up to 15,000 new housing units. The budget also commits a record $36 billion to education, addressing long-term funding changes and increasing support for higher education through adjustments to tuition assistance eligibility.


Despite the near consensus, lawmakers indicated that finalizing the budget would require further negotiation, particularly around the remaining 5% of unresolved issues. Voting is expected later in the week, aiming to resolve ongoing debates and finalize details to avoid further delays in state operations.

Here’s more from Gov. Hochul’s announcement late-Monday on an agreement

“I promised to fight the right fights for New Yorkers, deliver common sense solutions, and tackle the thorny issues that others might ignore, and that’s exactly what we’ve done,” Governor Hochul said. “We’re delivering on a common-sense agenda: fighting crime, fixing our mental health system, and building more housing so people can finally afford to live in New York.”

Highlights of the budget include:

  • Securing a historic agreement to address New York’s housing crisis by creating a new 485x tax incentive for affordable housing; extending the 421a incentive for projects already in the pipeline; making it easier to convert unused office space into affordable housing; eliminating outdated density caps in New York City; unlocking the potential of units that have been vacant since 2019; establishing a new law to protect tenants from price gouging.
  • Creating a statewide tax incentive for multi-family housing; making $650 million in discretionary funds exclusively available to Pro-Housing Communities; providing incentives for communities that want more accessory dwelling units; investing $500 million to develop up to 15,000 new housing units on State-owned sites; and protecting homeowners from deed theft.
  • Cracking down on retail theft by increasing penalties for offenders who assault retail workers; $40.2 million for retail theft enforcement; and a $3,000 tax credit for business owners to invest in security resources.
  • Shutting down illicit cannabis storefronts by authorizing the Office of Cannabis Management (OCM) to padlock businesses for a full year; allowing local governments to pass laws to execute padlock orders; establishing fines for landlords knowingly renting to retailers selling cannabis without a license.
  • Fighting the rising tide of hate by expanding the number of offenses that can be prosecuted as hate crimes and investing $35 million in the Securing Communities Against Hate Grant that protects houses of worship, religious schools and other at-risk sites.
  • Improving public safety through targeted investments in communities, including $347 million to continue New York’s efforts to reduce and prevent gun violence and $35.7 million to prevent and prosecute crimes of domestic violence.
  • Investing $7.1 million to reduce recidivism and improve reentry into the workforce by providing more intensive supervision of individuals on parole, expanding transitional housing opportunities, expanding college programming to all state prisons, and providing transportation for visitors to and from State Correctional Facilities.
  • Making our streets safer with new efforts to fight toll evasion on our roads and fare evasion on our subways.
  • Making record investments in mental health, including $19 million for mental health services for school aged children, $55 million to establish 200 new inpatient psychiatric beds at State-run facilities; and mandating better mental health care at hospitals.
  • Investing $31 million to expand mental health services for first responders and for individuals struggling with mental illness who are involved in the criminal justice system.
  • Maintaining our $3.9 billion commitment to support distressed hospitals and $20 billion multi-year investment to build new healthcare infrastructure, expand Medicare coverage for seniors and pregnant New Yorkers and increase the home care worker minimum wage.
  • Protecting mothers and babies by becoming the first state in the nation to offer paid leave to expecting mothers; requiring employers to provide time for nursing mothers to express; addressing the proliferation of surgical procedures in situations where they’re not necessary; and increasing access to care for postpartum depression.
  • Securing $200 million in Medicaid savings through fiscal intermediaries and by cracking down on CDPAP fraud; investing $7.5 billion in the health care system over the next three years through an amendment to New York’s Medicaid Section 1115 Demonstration program to support a comprehensive series of actions to advance health equity, reduce health disparities, and strengthen access to primary and behavioral health care across the state.
  • Authorizing the State to pursue federal approval for a managed care organization (MCO) tax, which could generate significant revenue for the State to provide a multi-year investment in New York’s health care system.
  • Investing $150 million to advance NY SWIMS and build pools across the state, helping New Yorkers learn to swim, and keeping them safe in and near the water.
  • Supporting New York students through record funding for P-12 schools; investing a record $35.9 billion in total school aid, including $24.9 billion in Foundation Aid; lowering the inflation factor in the Foundation Aid formula to right-size funding for the 2024-25 school year and commissioning a Rockefeller Institute study to examine the Foundation Aid formula to prepare for changes next year; ensuring every school district utilizes instructional best practices grounded in the Science of Reading to improve reading proficiency among New York kids.
  • Advancing a Consumer Protection and Affordability agenda to reduce costs and keep money in New Yorkers’ pockets by eliminating cost-sharing for insulin for thousands of New Yorkers; strengthening protections against unfair business practices; achieving the largest increase in benefits for paid medical and disability leave in more than three decades; and helping New Yorkers combat medical debt.
  • Establishing Empire AI, a nation-leading consortium that will create and launch a state-of-the-art artificial intelligence computing center in Buffalo to be used by New York colleges and universities to secure New York’s place at the forefront of artificial intelligence and advance AI for the public good.
  • Providing critical funding support to mass transit systems statewide, including $7.9 billion in operating aid for the MTA, $333 million for upstate transit systems, and $551 million for non-MTA downstate systems, a 5.4 percent increase in funding.
  • Advancing nation-leading infrastructure programs by contributing $2.6 billion for the third year of a record $32.9 billion five-year DOT Capital Plan, funding projects that are reconnecting communities across the state, and $100 million for local programs through the CHIPS program.
  • Making record environmental investments with $500 million for clean water, $400 million for the Environmental Protection Fund, and $47 million to support the Governor’s goal to plant 25 million trees by 2033.

With a conceptual agreement in place, the legislative houses are expected to pass bills that will enact these priorities. Based on a preliminary assessment of the negotiated changes to the Executive proposal, the total budget for FY 2025 is currently estimated at $237 billion. The FY 2025 budget does not raise income or statewide business taxes and maintains state reserves at the gold standard of 15 percent for a “rainy day.”