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New York Governor Kathy Hochul is set to unveil her $252 billion budget proposal for the fiscal year 2026-2027 this afternoon (January 21). The proposal includes a $10 billion increase in spending compared to the previous year, focusing on affordability measures and tax cuts. The budget aims to address a projected $5.3 billion surplus, with plans to issue rebate checks to taxpayers and introduce an income tax cut phased over two years. The proposal also includes an expanded child tax credit.
A significant component of the budget is the introduction of a cellphone ban in K-12 schools across the state. School districts will be required to develop policies to restrict cellphone use during school hours, with $13.5 million allocated to assist in implementation. Blake Washington, Hochul’s budget director, stated that the plan aims to separate students from mobile devices "from bell to bell."
Despite new funding from congestion pricing, the budget does not address the $33 billion gap in the Metropolitan Transportation Authority's (MTA) capital plan. Discussions on potential new taxes or fees to fill this gap are expected to continue between the governor, the MTA, and the legislature.
The budget proposal also includes a 4.7% increase in school aid and additional funding for Medicaid. However, no new funding is planned for New York City's migrant budget, despite requests for additional support from Mayor Eric Adams. The state has already allocated $4.3 billion for housing, food, and other programs related to the migrant situation.
The proposal will undergo negotiations with the state Senate and Assembly, with a final budget expected by the statutory deadline of April 1.