First Take on Governor Hochul’s $260 Billion FY 2027 Budget

January 20, 2026

Sections

  1. Reinvent Albany’s Initial Assessment of Budget Proposals
  2. The Numbers in Brief: Big Out-Year Deficits, Spending Faster than Inflation, $10B Federal Cuts
  3. Despite an Enormous Amount of Information Published Online, NYS Budget Is Structurally Secretive, Highly Politicized, Incomplete, and Does Not Convey True Fiscal Picture 

Reinvent Albany’s Initial Assessment of Budget Proposals

Reinvent Albany focuses on only a fraction of the wide range of issues presented in the New York State budget. Here’s our quick take on Governor Hochul’s Budget Briefing Book with page numbers (or bill sections). 

Thumbs Up

  • $8.6 billion in State operating aid for MTA, including $4.5 billion in appropriated operating assistance. The budget proposes to extend the 7.25% corporate tax rate for three years through tax year 2029, resulting in increased revenue for the State and the MTA. (Pages 17 and 126, Briefing Book)
  • $3.75 billion in new clean water infrastructure funding. (Page 57, Briefing Book)
  • $142.2 million funding for State Board of Elections. (Page 61, Briefing Book)
  • $116.1 million for public campaign finance program ($100 million for matching (Page 301, Aid to Localities), $16.1 million for admin/technology (Page 157, State Ops) – close to Fair Elections Coalition in a December 15, 2025 letter).
  • $25 million expansion of MTA Subway Co-Response Outreach Teams (SCOUT) from 10 to 15 teams. We and other advocates requested an expansion of the program in a public letter sent on January 8, 2026. (Page 127, Briefing Book)
  • $9.3 million for the Commission on Judicial Conduct, as requested by the Commission (Page 482, State Ops)
  • $1.1 million for body-worn camera footage FOIL processing unit. (Page 115, Briefing Book) 
  • Regulating use of AI deepfakes by political campaigns (Parts R and S, PPGG). Good the State is addressing this issue. We look forward to reviewing the proposal.
  • Improving Authorities Budget Office (ABO) subsidy monitoring systems (Page 617, State Ops).
  • Decouple from certain portions of federal HR 1 bill (Parts F and G, Revenue). The Governor’s bill wisely decouples from portions of last year’s federal tax bill – it should also decouple from the costly federal Opportunity Zone program.

OK

  • $629 million for the Comptroller’s office, up from $603 million (Page 44, State Ops)  
  • $413 million for the Attorney General’s office, up from $399 million (Page 520, State Ops)
  • $3.8 million for the Authorities Budget Office, up from $3.7 million (Page 617, State Ops).
  • Increased penalties for ethics training noncompliance ($25 a day) and increased lobby registration fees from $200 each two-year cycle to $250 each year. (Page 38, Briefing Book) The Governor and Legislature should give fees directly to COELIG, which asked for $750,000 for upgrades to their aging lobbying and financial disclosure filing systems, and is being cut by $200k.
  • Streamlining of financial disclosure statements (Part V, PPGG). We will review the proposal in the coming days but support improvements to this long, confusing form.

No Way 

  • Another misguided attempt to curb the Comptroller’s contract oversight, removing Comptroller pre-approval for centralized contracts and certain thresholds (Parts Y and BB, PPGG)
  • $300 million more POWER UP electrical infrastructure subsidies for high load customers. (Page 47, Briefing Book)
  • $150 million increase to Broadway show subsidy. (Part J, Revenue)
  • $25 million Downstate Semiconductor Design. Incoherent industrial policy given huge Albany-area subsidies (Page 36, Briefing Book)
  • Exempt Electric vehicle charging station from sales tax (No cost est.) Inconsistent tax policy. (Page 36, Briefing Book)
  • Extension of Capital Off-Track Betting Corporation’s (OTB) $1 million in capital for operating. (Page 38, Briefing Book)
  • $2 billion Special Emergency Appropriation. Watchdogs requested this not be increased from $1 billion last year. (Page 768, State Ops)
  • Only $8.9 million for the Commission on Ethics and Lobbying in Government (COELIG), down from $9.1 million. COELIG asked for $9.1 million for operating expenses, and an additional $750,000 for tech upgrades, which we support. (Page 212, State Ops)

The Numbers in Brief: Big Out-Year Deficits, Spending Faster than Inflation, $10B Federal Cuts

The Governor’s FY 2027 budget includes zero surplus vs. $5.3 billion last year, and out-year budget deficits of $6 billion, $9 billion, and $12 billion for the next three fiscal years. These deficits are fueled by year over year spending exceeding inflation, including 5.7% growth in FY 2027 versus 3.7% inflation in the NYC metro area. Spending growth is being driven by huge increases in Medicaid costs, which have tripled over the last 15 years and will increase 11% this fiscal year to $38 billion. 

Additionally, the State is being walloped by cuts in federal aid, including 11.4% or $10.3 billion this year alone.

Despite an Enormous Amount of Information Published Online, NYS Budget Is Structurally Secretive, Highly Politicized, Incomplete, and Does Not Convey True Fiscal Picture 

Continued Absence of Real Cost Estimates by an Independent Legislative Budget Office is Abysmal

New York is one of only a dozen or so states that does not publish a fact-based estimate of the fiscal cost of legislation by an independent budget office. Outstanding reporting in the January 18, 2026 Albany Times Union highlighted the State’s massive fiscal transparency gap. When asked by the TU about New York’s lack of an independent spending estimator, one of California’s top independent budget experts responded: “Oh my gosh, I don’t know how they could conduct business.” 

What New York’s Budget Process Does Right

What New York Needs to Do to Create a Transparent, Credible Budget Process

  1. Publish basic financial plan tables.
  2. Accurately and transparently account for the multi-billion dollar cost of reimbursable tax credits like film/TV, Excelsior, and GreenChip, which are purportedly subtracted from revenue accounts before they are transferred to the State General Fund. 
  3. Properly display and account for public authority debt, which is 95% of state borrowing, by clearly showing the total, cumulative debt of all state controlled entities in top line budget summaries. 
  4. Drastically reduce and limit billions of lump sums, which are functionally secret member items.
  5. Drastically reduce and limit billions of “special emergency appropriation” slush funds. 
  6. Do not raid dedicated funds like Regional Greenhouse Gas Initiative, E911 etc. Undermines public trust.
  7. Eliminate universal transfer and interchange authority between agencies, which gives the governor too much discretion, reduces transparency, and is an invitation to pay-to-play.  
  8. Create an independent, nonpartisan legislative budget office like the Congressional Budget Office to provide spending and cost estimates less tainted by politics.