Governor Kathy Hochul’s proposed Fiscal Year 2027 budget centers on affordability, public safety, and long-term stability, while avoiding new income tax increases.
On Tuesday, the Governor outlined her plan, which comes with billions in targeted investments, backed by large state reserves. This comes as Hochul says New York must prepare for economic uncertainty driven by actions in Washington.
Here are the biggest takeaways from the Executive Budget, along with early reactions from the state comptroller.
No new income taxes, but warning signs ahead
Hochul proposes a balanced budget with no new income tax increases and keeps $14.6 billion in state reserves set aside for downturns.
The budget maintains New York’s AA+ credit rating, the state’s best since 1972. State revenue collections are projected to grow by 9.9 percent, with total spending reaching $260 billion.
State Comptroller Thomas P. DiNapoli acknowledged the affordability focus but warned that long-term fiscal pressures remain.
“While commendable, the state’s long-term fiscal challenges persist, as spending growth remains above inflation and the state’s economy and finances continue to be disrupted by actions taken in Washington,” DiNapoli said. He noted that projected out-year budget gaps total an estimated $27.5 billion.
Child care and affordability take center stage
Affordability anchors the budget. Hochul proposes $4.5 billion statewide for child care and Pre-K services, including $1.7 billion in new funding.
The plan expands child care vouchers, launches pilot programs in Broome, Dutchess, and Monroe counties, and reforms the Child and Dependent Care Credit. About 230,000 filers would see higher benefits.
The budget also eliminates state income taxes on tipped wages, up to $25,000 a year, beginning with Tax Year 2026 filings.
DiNapoli said lawmakers must weigh how these proposals affect household and business costs.
“It will be important to evaluate how budget proposals impact the costs businesses and residents are facing while also protecting essential programs and services that New Yorkers rely on,” he said.
Record school aid and free meals continue
Schools would receive $39.3 billion in aid, the highest level in state history. Every district would see an increase in Foundation Aid.
The budget continues universal free school meals and boosts Universal Pre-K funding. It also includes library construction grants, tuition freezes at SUNY and CUNY four-year colleges, and expanded free community college access.
Health care shielded from federal cuts
Hochul’s plan commits billions to protect access to health and mental health care amid federal funding threats.
Medicaid funding would reach $38.2 billion, alongside new investments in safety net hospitals, reproductive health care, nursing homes, and student mental health training.
Housing push aims to build faster
Housing remains a top priority. The budget advances Hochul’s $25 billion affordable housing plan and adds $250 million to speed construction.
Programs target homeownership, weather resilience, homelessness prevention, and lead abatement. The Governor’s “Let Them Build” agenda aims to cut red tape and bring housing to market faster.
Public safety and infrastructure funding
The budget continues investments in gun violence prevention, hate crime protection, subway safety, forensic labs, and emergency response.
It also includes billions for transportation, clean water, parks, and energy efficiency, along with support for the MTA, local transit systems, and road and bridge repairs.
Economic development and food security
The plan invests heavily in economic development, including funding for manufacturing, biotech, quantum research, downtown revitalization, and regional projects.
Food security funding would increase for food banks and nutrition programs, and the state plans to upgrade EBT cards to prevent benefit theft.
DiNapoli said the months ahead will require careful balancing.
“Policymakers will face a complicated task crafting a budget this year given the heightened uncertainty in the economy and the prospect of even more unfavorable federal policy changes,” he said.
His office plans to release a more detailed analysis of the budget in the coming weeks.
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