"After extended deliberation, the Governor and Legislature have finalized a state budget.
"Major policy changes in the budget that will be felt across the state include the most significant changes to the Foundation Aid formula since its inception, long-awaited relief to small businesses by paying off the Unemployment Insurance Trust Fund loan, and reduced personal income tax rates for lower- and middle-income families starting in 2026. Other new funding initiatives include expanding access to community college for adult learners and preserving access to child care. The budget also fully funds the Metropolitan Transportation Authority’s $68.4 billion 2025-2029 capital plan, reflecting a major investment in transportation infrastructure in the New York City Metropolitan area.
"The budget includes significant state-funded increases in education, health and other spending, and authorizes an additional $23 billion in public authority backdoor borrowing. General aid for local governments is largely flat, despite growing signs of fiscal strain at the local level as pandemic aid has ended and costs continue to rise. Deep uncertainty surrounding tariffs, the economy and actions in Washington casts a long shadow on this budget.
"Market volatility and declining business and consumer confidence may upend the state’s revenue projections and increase the already sizeable outyear budget gaps. Actions by Congress may also have a large impact on the state’s finances in the months ahead, and may jeopardize many of the critical safety net programs that New Yorkers rely on and that have always been predominantly funded by the federal government. Federal changes being considered would shift significant costs for Medicaid, food benefits and other programs to states. While the state has a record $8.75 billion in its statutory reserves, these funds are needed to protect against economic and fiscal disruptions, and the state does not have the resources to backfill federal reductions on an ongoing basis.
"The time to develop a strategy and structural reforms is before a crisis, yet this budget includes no serious cost containment measures, particularly in Medicaid, where it is most needed. In these uncertain and disruptive times, the Legislature gave extraordinary powers to the Executive to make mid-year spending cuts in the event of budget imbalance. However, this provision creates further uncertainty for those that depend on state aid.
"The full financial and economic implications of this budget will be clearer when the Financial Plan is released, and close monitoring will be needed to ensure that the state is on a sustainable path and able to navigate the challenges ahead."
The Comptroller also noted that his office "will continue to carefully monitor economic conditions and the state’s cash position and release an analysis of the enacted budget in the coming weeks.”
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