Statement on Approved FY 2026 NYS Budget

May 8, 2025
Late, Secret Budget Is Cynical, Undemocratic, Undermines Positives
 
The budget includes spending and policies we support, but in healthy democracies, the ruling party does not make closed-door decisions about important legislation the public and opposition have not seen.
 

New York’s budget is more than five weeks late. Worse, it is full of decisions made in complete secrecy by the ruling Democratic party majority – including self-serving changes that weaken the landmark campaign finance law and postpone restrictions on outside income for elected officials. 

Reinvent Albany has been very critical of how Governor Hochul and legislative leaders have foisted this furtive farce on New Yorkers. We view this as a historically bad budget process that should not become the new normal. To us, this budget marks the logical evolution of the two state high court decisions in the early 1990s that barred the Legislature from striking the governor’s policy proposals out of the budget. Those unfortunate court decisions encouraged governors to cram their priorities into the budget where they have the most leverage, greatest secrecy, and much less public scrutiny of policy proposals than in the regular session. Unfortunately, rather than publicly stand together against Governor Hochul’s imperious budget, the legislative leaders ultimately took a “If you can’t beat ’em, join ’em” approach and inserted their own policy priorities – including those weakening public campaign finance and delaying outside income caps.

Minimum Expectations for a Transparent New York Budget Process

  1. Stop abusing the Governor’s “message of necessity” emergency powers and honor the State Constitution, which requires a minimum 3-day transparency period between the time bills are printed and voted on. 
  2. Provide simple financial tables showing spending and revenue assumptions, budget gaps and more.
  3. Give the Legislature equal power in the budget process – start by passing S945 (Jackson) / A8009 (Lavine).
  4. Count billions of dollars of reimbursable tax credits as on-budget expenditures. This is not free money.

Overall Thoughts on the Governor’s and Legislature’s Big Budget Decisions

New York’s $254 billion budget increases state spending by about 11% despite the high likelihood of large cuts in federal aid. We are especially concerned about the federal government’s threats of massive cuts to Medicaid, which could cost New York’s $103 billion Medicaid program roughly $8 billion in federal funds. Medicaid spending powers the hospital and healthcare industries, and cuts there will avalanche through the economy and put huge pressure on the state to plug the gap.

Thumbs Up:

  • The Governor and Legislature deserve credit for digging deep and finding tens of billions in funding for MTA’s 2025-2029 Capital Plan, especially on the heels of a huge political battle over congestion pricing.
  • Using reserve funds to pay off $6.2 billion in unemployment insurance debt owed to the federal government from COVID era borrowing. Other states used federal COVID aid to pay this off, but New York chose to put that federal COVID funding in rainy day reserves and make employers pay off the loan with sky-high unemployment insurance fees. We think this approach is both fairer and good policy and credit Speaker Heastie for championing it.
  • Investments in early childhood, childcare, and public infrastructure provide a huge bang for the buck, and we strongly support New York expanding and extending this type of spending. 

Thumbs Down:

  • The Governor’s $2 billion inflation rebate is an expensive political stunt that was opposed by budget watchdogs on the left and right. While it will reduce reserve funds, it is such a modest amount for each of the 8.2 million recipients that it will do little for them or the economy. 
  • Emergency withholding power was granted to the Governor’s Division of the Budget by the Legislature. If the budget goes out of balance by more than $2 billion, DOB can withhold spending of its choosing if the Legislature can’t decide on its own cuts. The new budget language does not require that withholding notices be published for public review. Watchdogs repeatedly requested there be transparency of the COVID withholdings so that the public could evaluate if they were fair and sensible. We also fought for dedicated funding to be restored to the MTA from withholdings. Given the experience of the state with withholdings during COVID, we believe it is a mistake for the Legislature to acquiesce and cede even more power to the Governor.  
  • Billions in secretive lump-sum spending programs are little more than slush funds for the Governor and Legislature and much worse than the much criticized – but far more transparent – member items they replaced. Prime examples of lump sum programs include the Governor’s $2 billion “Special Emergency Appropriation” and the $1 billion transfer from the General Fund to the Health Care Transformation Fund remain in the final budget, which were opposed by watchdogs.
  • New York state and local governments are spending roughly $13 billion a year subsidizing corporations and very wealthy investors in the name of job creation and economic development. This spending is highly politicized, wasteful, vulnerable to corruption, and overwhelmingly debunked by economists and fiscal experts not being paid by subsidized industries. 

Reinvent Albany Budget Priorities 

Strong Democracy

Thumbs Down:

  • Making changes to public campaign finance in the budget. The original program was the product of a 20-year campaign and went through at least nine public hearings and meetings by the Public Financing Commission. The changes in the FY 2026 budget were decided over the course of a month by three people in a room. 

Thumbs Up:

  • $100 million for public matching funds and $14.5 million for administration of public campaign finance.

Ethics

Thumbs Up:

  • $9.1 million for the Commission on Ethics and Lobbying in Government. Watchdog groups supported COELIG’s request for $8.9 million, not including the $250,000 necessary to pay for the cost of the Hogan Lovells report of the approval process for former Gov. Cuomo’s book deal. Now that COELIG has been found to be constitutional, this additional funding will enable stronger enforcement efforts, and hiring of additional staff to fulfill their mission.

Accountable Government 

Thumbs Up:

  • Authorities Budget Office (ABO) funded at $3.8 million.
  • Increased funding for the Comptroller’s office, with $620k more for the Deputy Comptroller for NYC.
  • $9.3 million for the Commission on Judicial Conduct, as requested by the Commission.

MTA and Transportation Policy Proposals

Thumbs Up:

  • Lockboxed funding for the MTA 2025-2029 Capital Plan from a regional Payroll Mobility Tax (PMT) increase for large businesses. Reinvent Albany and NYU Marron Institute of Urban Management’s analysis found the commuter railroads have received a far larger share per rider of MTA capital spending than NYC Transit. Additionally, MTA vendors are located across NY, especially in the MTA commuter district.
    • The Governor and MTA must release detailed information about how much revenue the PMT is expected to raise and how much can be bonded from it. We will issue further commentary on MTA funding and budget proposals in the coming days. 

OK:

  • One-year extension of tax increment financing (TIF) provisions, rather than 10 years as originally proposed. We have called for a hearing on potential real-life scenarios in NY and TIF elsewhere before the program is extended.

Thumbs Down:

  • Failure to include expanded MTA bus camera enforcement for blocking the box.
  • No new transparency requirements for MTA, including new capital dashboard data, and an improved benchmarking report that would have included capital project comparisons with domestic and international peer agencies. 

Corporate Subsidies 

Thumbs Down:

$3.7 billion in new reimbursable tax credits to corporations and super-wealthy investors – essentially state grants that will not be reduced if across-the-board cuts are needed because of reductions in federal aid to New York.

  • $3.7 billion in new subsidies, including:
    • $2.6 billion in new subsidies for film/TV
    • $1 billion in new Excelsior tax breaks
    • $100 million in new subsidies for Broadway
  • $116 million in funds to help Onondaga County expand its water supply – solely for the purpose of helping it accommodate Micron, a company that will already be receiving up to $5.5 billion in subsidies.
  • No end to the Opportunity Zone tax break, a Trump handout to the wealthy that will cost the state and NYC up to $420 million annually from 2029.
  • No passage of the Stop Climate Polluter Handouts Act, which would end $265 million in annual New York State fossil fuel subsidies.

Open Government

Thumbs Down:

  • Cameras and other recording devices are still banned from courtrooms.