New York State Fiscal Year 2027 Executive Budget Overview

Governor Kathy Hochul’s State Fiscal Year 2027 Executive Budget Proposal—her fifth Executive Budget Proposal—totals $260 billion in All Funds spending, a 0.7% increase over Fiscal Year 2026, with state operating funds totaling $157.6 billion, 5.7% increase over Fiscal Year 2026.

Hochul’s budget reflects the reality that 2026 is a gubernatorial election year. The proposal is centered on affordability and maintains her focus on families and the middle class. This year’s theme is “Your Family. Your Future. My Fight.” In keeping with election-year dynamics, the budget has no new income taxes, as Hochul has been consistent in opposing any personal income tax hikes, including a tax increase on the wealthiest New Yorkers (a proposal being pushed by many progressive state legislators). The budget also takes a “don’t rock the boat” approach and is noticeably lighter on policy than previous years, particularly in the healthcare space.

The Trump administration also looms large over the budget this year. H.R.1, also known as the “One Big Beautiful Bill Act,” substantially changed the flow of federal funds to New York State—primarily in healthcare—when it was passed in Congress and signed by President Trump last July. The most drastic of these cuts do not come into effect until next year; however, the impact was still substantial this year: current federal cuts total $10.3 billion, a 11.4% decrease in federal funding.

As a result, the debate over how much state revenue needs to be raised to fund initiatives—especially those focused on New York’s most vulnerable—sets up a collision among Hochul, the Legislature, and, significantly, New York City Mayor Zohran Mamdani. For example, Mamdani responded to the Executive Budget Proposal with, “It is time to ask New York City’s wealthiest and large corporations to pay their fair share, while also working toward a fiscal relationship with the State that better reflects New York City’s status as the economic engine of the state.”

Furthermore, New York City is facing a budget deficit of over $12 billion, and across the State, many municipalities are facing similar dire straits; in Buffalo, Mayor Sean Ryan faces a roughly $50 million deficit. Expect the Legislature to embrace the idea that the State itself needs to pitch in. With a tightening long-term fiscal picture, that will be hard (or impossible) to do without new or additional sources of revenue.

On the lack of policy, one person sounded a positive note. A familiar dynamic in the budget process is Assembly Speaker Carl Heastie’s frustration with the Executive Chamber’s insistence on advancing policy through the budget—often at the expense of timeliness on April 1. Heastie expressed relief at the lighter-than-normal policy load in the Executive Budget, offering, “There’s less policy than normal, so maybe I’m getting into the governor’s ear a little bit.”

That said, there will be a number of fights on policy that could—and likely will—complicate discussions. Already, legislators have indicated concerns about several of the Executive Budget’s proposals, and in some cases, a lack thereof. For example, Hochul is pushing to amend the State’s Environmental Quality Review Act (“SEQRA”) to expedite development and provide additional procedural carveouts primarily for housing projects. Heastie says SEQR and Hochul’s proposal to take on the auto insurance industry (both outlined further below) will be two of the biggest fights.

Further, regarding the lack of policy, expect immigration and the protection of immigrants (legal and otherwise) to be at the top of the list. New York for All—legislation that would prevent any state or local coordination with Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP)—is the top priority for legislators who do not see the Executive Budget as going far enough to protect undocumented immigrants. Hochul has been non-committal, saying only “…[she] will review any pieces of legislation that pass the Legislature.”

The Trump administration also looms large over the budget this year. HR.1, also known as the “One Big Beautiful Bill Act,” substantially changed the flow of federal funds to New York State—primarily in healthcare—when it was passed in Congress and signed by President Trump last July. The most drastic of these cuts do not come into effect until next year; however, the impact was still substantial this year: current federal cuts total $10.3 billion, a 11.4% decrease in federal funding.

As a result, the debate over how much state revenue needs to be raised to fund initiatives—especially those focused on New York’s most vulnerable—sets up a collision among Hochul, the Legislature, and, significantly, New York City Mayor Zohran Mamdani. For example, Mamdani responded to the Executive Budget Proposal with, “It is time to ask New York City’s wealthiest and large corporations to pay their fair share, while also working toward a fiscal relationship with the State that better reflects New York City’s status as the economic engine of the state.”

Furthermore, New York City is facing a budget deficit of over $12 billion, and across the State, many municipalities are facing similar dire straits; in Buffalo, Mayor Sean Ryan faces a roughly $50 million deficit. Expect the Legislature to embrace the idea that the State itself needs to pitch in. With a tightening long-term fiscal picture, that will be hard (or impossible) to do without new or additional sources of revenue.

On the lack of policy, one person sounded a positive note. A familiar dynamic in the budget process is Assembly Speaker Carl Heastie’s frustration with the Executive Chamber’s insistence on advancing policy through the budget—often at the expense of timeliness on April 1. Heastie expressed relief at the lighter-than-normal policy load in the Executive Budget, offering, “There’s less policy than normal, so maybe I’m getting into the governor’s ear a little bit.”

That said, there will be a number of fights on policy that could—and likely will—complicate discussions. Already, legislators have indicated concerns about several of the Executive Budget’s proposals, and in some cases, a lack thereof. For example, Hochul is pushing to amend the State’s Environmental Quality Review Act (“SEQRA”) to expedite development and provide additional procedural carveouts primarily for housing projects. Heastie says SEQR and Hochul’s proposal to take on the auto insurance industry (both outlined further below) will be two of the biggest fights.

Further, regarding the lack of policy, expect immigration and the protection of immigrants (legal and otherwise) to be at the top of the list. New York for All—legislation that would prevent any state or local coordination with Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP)—is the top priority for legislators who do not see the Executive Budget as going far enough to protect undocumented immigrants. Hochul has been non-committal, saying only “…[she] will review any pieces of legislation that pass the Legislature.”

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