Enacted Budget – Fiscal Year 2026
New York Governor Kathy Hochul signed the state’s fiscal 2026 budget into law on May 9. The budget for fiscal 2026 calls for $254.4 billion in spending from all funds, a 5.3 percent annual increase, and $146.1 billion in state operating funds, a 9.3 percent increase over fiscal 2025. General fund spending, including transfers, is expected to total $125.5 billion in fiscal 2026, a 15.5 percent increase over the prior year. All funds receipts, excluding the pass-through entity tax (PTET), are projected to total $253.3 billion, a 3.4 percent annual increase, while general fund receipts (also excluding PTET) are projected at $115.6 billion, a 0.3 percent increase. The state estimates a general fund ending balance of $44.9 billion (including the rainy day fund and other reserves), or $28.4 billion when excluding funds reserved for monetary settlements and PTET. Principal reserves, which include the Tax Stabilization Reserve, Rainy Day Reserve, and Reserves for Economic Uncertainties, total $14 billion in fiscal 2026 after withdrawing $7 billion for the one-time purpose of eliminating the Unemployment Federal loan and bringing the state unemployment program into solvency.
The enacted budget invests in a number of gubernatorial priorities. For education, the budget updates and fully funds the Foundation Aid school funding formula, ensures universal free breakfast and lunch for K-12 students, funds free community college in high-demand occupations, provides new state operating and capital support for public universities. The budget also expands access to affordable childcare, increases Medicaid reimbursement rates, and strengthens mental health care including by adding new inpatient psychiatric beds. To support public safety, the budget boosts funding for gun violence prevention, subway safety measures, and discovery law compliance. Additionally, the budget makes capital investments in public transit, road and bridge projects, and housing development. The budget also funds new investments in environmental sustainability, agriculture, and state parks, while also supporting various economic development initiatives such as providing low interest capital to small businesses, incentives to grow the semiconductor industry and advanced manufacturing, funding for downtown revitalization projects, and investments in artificial intelligence (AI). To promote affordability, the budget makes several revenue changes, including providing a tax cut for middle-class and low-income taxpayers, increasing the Child Tax Credit, reducing the Payroll Mobility Tax for small businesses, and providing one-time, first-ever Inflation Refund checks.