Calls for $8.6 Billion Increase in Spending
By Hank Russell
Governor Kathy Hochul released her proposed $252 billion budget for 2026 on January 21 which included 3.6% more spending — equal to $8.6 billion — than in last year’s budget, a litany of tax cuts and tax credits and more money for public safety, housing, economic development, healthcare and the environment. While the governor touted some of the economic benefits state residents would enjoy, GOP Assembly members decried her fiscal irresponsibility.
Reiterating the theme of “Money in Your Pockets,” Hochul pitched $3 billion in Inflation Refund checks. This, she said, would go to 8.6 million New York residents; under the plan, joint filers making less than $300,000 a year would get $500 and those who earn less than $150,000 would receive $300.
She also proposed a $1 billion middle-class tax cut across five of the nine tax brackets. According to Hochul, rates would be slashed to their lowest levels in almost 70 years. These incentives would benefit joint filers earning up to $323,000 a year.
In addition, Hochul proposed to expand the Child Tax Credit — at a cost of $825 million — over a two-year period, with eligible parents getting $1,000 for children under four and $500 for children ages four to 16. She also included $340 million for free breakfast and lunch for every student. Among these incentives, Hochul said, families would save up to $5,000 a year.
“A budget is more than just numbers on a page – it tells the story of who we are, what we value, and what we’re fighting for,” Hochul said. “And let me be clear: your family is my fight. This year’s budget will put money back in New Yorkers’ pockets and make our streets and subways safer. Working together with my partners in the Legislature, we can get this done and make New York the best place in the country to raise a family.”
She said she will fight to have the SALT (state and local taxes) deduction cap repealed. “This cap was instituted the last time Republicans governed Washington in 2017,” Hochul said, adding that New Yorkers are paying $12 billion more in taxes each year because the cap has not been repealed.
“[D]espite a bipartisan bill that could have addressed this issue, Republicans in Congress, including seven from New York, have refused to act,” she continued. “They are actually working against their own constituents to accept a watered down proposal rather than a full repeal of the cap. New Yorkers deserve better. As Governor, I say this: Full repeal or no deal. Let me repeat. Full repeal or no deal.”
Other highlights from the budget include:
- $250 million to build housing on State-owned land through the Redevelopment of Underutilized Sites for Housing (NY RUSH) initiative
- $100 million for first-time homebuyers, including $50 million in capital for starter homes and $50 million for down payment assistance
- $47 million to fund free community college for New Yorkers aged 25-55 pursuing in-demand degrees like nursing, technology and engineering
- $37.4 billion in total school aid, including $1.5 billion in Foundation Aid — ensuring every district receives more funding than last year
- $125 million for the State Superfund program to remediate hazardous waste, and a 10-year reauthorization of the State Superfund program
- $588 million for non-MTA Downstate transit systems
Hochul also emphasized that the budget would not increase any tax increases; any additional funding for these programs would be funded through tax revenue, which grew 4% over last year. However, many from the GOP Assembly saw the budget as one that “disregards fiscal responsibility,” as Assembly Minority Leader Will Barclay said.
“New York Democrats should be breaking their runaway spending habits,” Barclay (R,C,I-Pulaski) said. “Instead, they’re breaking the bank. … The two Legislative Majorities will have their own lengthy wish lists and don’t know the meaning of the word ‘restraint’ when it comes to spending the public’s money. “
While he agreed with her proposed tax cuts and increase in school aid, Keith Brown (R-Northport) echoed Barclay’s sentiments. “At a quarter of a trillion dollars, Governor Hochul’s current budget proposal for New York state is far from fiscally responsible, especially compared to other states in the U.S.,” Brown said. “California has twice the population of New York, yet our proposed budget is only 22% smaller. Florida’s state spending per resident is half of New York’s. More than once, members of the Assembly Republican Conference have proposed spending caps for state agencies, yet our state government is not held accountable for overspending.”
According to Brown, Hochul’s proposed budget is $36 billion, or 16.5%, greater than it was in 2022 and $59.1 billion (30.6%) larger than when he took office in 2021. “It is time the governor chooses quality over quantity in her state budget proposal and reins in overspending before New York state goes over the looming fiscal cliff.”
Daniel Norber (R,C-Great Neck) said Hochul was “jacking up spending” at the expense of New York families “to fund more handouts instead of real relief. It’s clear the governor has no plan to address our affordability crisis—just more of the same tax-and-spend policies that are driving people and businesses out of the state.”
“Instead of addressing our growing structural deficits, this proposal would commit to billions in new spending, gambling on future solutions while leaving taxpayers hanging on a financial cliff,” Ed Ra (R-Franklin Square) added. “While I welcome the governor’s newfound focus on affordability, we will never be able to spend our way to a more affordable New York. As we begin the budget process, we need to keep New York’s long-term fiscal stability at the front of mind.”