Yesterday evening, state lawmakers passed the $268.5B FY27 state budget, reflecting an increase of $14B from FY26. The budget was passed eight weeks after the deadline of April 1, and will be retroactively in effect from April 1, 2026 to March 30, 2027. Governor Hochul’s statement on the budget is available here, Speaker Heastie’s statement is available here, and Majority Leader Stewart-Cousin's statement is available here. 

Some key highlights of the state budget are listed below. Please reach out to any of the Cozen Public Strategies New York team for additional information on specific provisions.

Affordability

• Auto Insurance

  • Implements a cap on non-economic damages for drivers engaging in criminal behavior

  • Clarifies the definition of “serious injury”

  • Increases enforcement of organized staged accidents

• Child Care

  • Provides $1.7 billion in increased funding for universal child care, bringing the total FY27 investment to $4.5 billion

• Provides $1 billion energy rebate to provide relief for utility bills

• Eliminates New York State income tax on tipped wages up to $25,000 per year

Climate

• Delays immediate implementation of Climate Leadership and Community Protection Act (CLCPA) regulatory deadlines to 2028, establishes a 2040 target of a 60% emissions reduction, and maintains the 2050 target of an 85% emissions reduction.

• Provides $1 billion for the state’s Sustainable Futures Fund

• Provides $3.75 billion for clean water infrastructure

Healthcare

• Provides $1 billion in new funding for existing safety net hospitals

• Provides $500 million in additional support for distressed hospitals

• Makes the Managed Care Organization tax permanent beginning Jan. 1, 2027 and sets a new rate of 0.35% on insurers’ total premium revenue (pending possible federal approval)

Housing/Construction

• Renews the J-51 tax abatement for 10 years

• Provides $250 million in capital funding to accelerate the construction of new affordable homes

• State Environmental Quality Review Act (SEQRA) Reforms

  • Exempts housing projects with up to 250 units in New York City, and up to 500 units in medium- and high-density areas in the city, up to 300 units in urban areas outside the five boroughs and up to 100 units in nonurban areas from the SEQRA review process.

  • Other exemptions include public parks and trails projects, green infrastructure, clean water infrastructure that avoids negative impacts to natural resources and public school buildings in New York City built by the School Construction Authority

Education

• Provides $39 billion in total school aid

  • Increases Foundation Aid by 2% for all schools, totaling over $27 billion

  • Modifies Foundation Aid formula to provide additional aid for English language learners, students in foster care and homeless children.

• Updates funding formula for statewide universal pre-K, along with new requirement that all districts must provide full-day pre-K access to eligible 4-year-olds by the 2028–29 school year

• Extends mayoral control of NYC schools for 2 years

Immigration

• Prohibits local law enforcement from signing contracts with Immigration and Customs Enforcement known as 287(g) agreements and other contracts with federal immigration officials that formalize the working relationship between localities and immigration officials.

• Establishes "sensitive locations” that ICE cannot enter without a signed judicial warrant, including healthcare facilities, houses of worship, public and private schools, childcare facilities, parks, playgrounds and polling places.

• Prohibits State and local employees, excluding law enforcement, from collaborating with ICE for any civil immigration enforcement.

Public Safety

• Requires drivers who have received 16 or more speed camera tickets over a 12-month period to install an intelligent speed assistance (ISA) device in their car.

• Provides $352 million in gun violence prevention programs

• Provides $77 million to assist the New York City Police Department in policing the subway system.

• Provides $25 million to expand the MTA’s SCOUT program

• Provides $35 million for Securing Communities Against Hate Crimes grants

• Establishes 50-foot buffer zones for demonstrations that create “reasonable fear” around religious places of worship

Taxes

• Imposes Pied-à-terre Tax, an annual surcharge on residential properties in New York City that are not occupied as a primary residence valued at $5 million or more

Miscellaneous

• Provides $6 million for NY Kicks to capitalize on the momentum from the FIFA World Cup

• Provides $10 million for the Saving Performing Arts and Cultural Experiences (NY SPACE)

• Reforms Tier 6 Public Employee Pensions