Alliance Alert: New York State agencies have been directed to submit flat funding requests and identify “obsolete” regulations as part of early planning for the next state budget cycle. With federal cuts looming and a projected $34.3 billion budget gap through 2029, state leaders are signaling that the coming year will be especially challenging for programs serving people with mental health, substance use, and trauma-related challenges.
While the budget environment will be tight and negotiations difficult, the Alliance for Rights and Recovery will continue to fight for the essential services, supports, and innovations that individuals, families, and communities need to thrive. These programs are not optional—they are lifelines that uphold recovery, dignity, and inclusion across New York State.
To build a strong advocacy agenda, we need your voices! The Alliance is hosting a series of Regional Forums to hear directly from peers, providers, and community members about what is working, what’s not, and what priorities we must fight for in Albany this year.
- Our first forum took place earlier this week in the North Country, kicking off the statewide series.
- Next up: the Hudson Valley Regional Forum on October 20th and the Rochester (Finger Lakes) Regional Forum on October 22nd.
These forums are your chance to share concerns, shape solutions, and help us ensure that New York invests in the people and programs that truly work.
We’ll bring all of your feedback to Albany for the Alliance’s Annual Legislative Day on February 10th, 2026, when advocates from across the state will come together to demand sustained investment in mental health, substance use, and recovery-oriented services. Complete this interest form to get connected with regional groups coming to Albany for legislative day and continue monitoring this email for updates on policy, the upcoming forums, and our February 10th event!
Now more than ever, we must stand together to make sure our voices—and the voices of those we serve—are heard in the rooms where decisions are made.
N.Y. Agencies Ordered to Identify ‘Obsolete’ Regulations, Keep Funding Requests Flat in Anticipation of Tough State Budget
By Jack Arpey | New York State of Politics | October 9, 2025
The New York State Division of Budget sent out their annual call letter Thursday, giving state agencies until Oct. 24 to submit annual budget requests in which they will be expected to keep funding flat and find ways to scale back regulations as the state navigates federal funding cuts stemming from the so-called big beautiful bill.
With the state facing a $34.3 billion cumulative budget gap through 2029, Budget Director Blake Washington called for discipline and poured cold water on calls to generate revenue through increased taxes on the state’s highest earners.
The full impact of federal cuts is not expected to fully hit until midway through next fiscal year, meaning mild impacts to the current fiscal year will likely give way to more severe challenges by late in 2026. The state’s fiscal year runs from April 1 through March 31.
In the letter, Washington stressed that while revenues are in good shape so far this fiscal year, forecasted growth won’t make up for the worsening of existing budget gaps, thanks in part to those federal cuts.
Many have suggested increasing taxes on wealthy New Yorkers to backfill some of the cuts. Washington implied that turning to new revenue streams won’t cut it, and said such a move would create risks as it relates to competing with neighboring states.
“With previously approved funding for critical projects and initiatives now in jeopardy, calls for new revenues to backfill unanticipated losses of federal funding fail to address how New York will finance new initiatives and also fails to address deeper retrenchment from Washington. We must remain economically competitive with our neighboring states and improve economic opportunities for all. This upcoming fiscal year, we will prioritize aligning out-year spending growth with available resources, which will lessen the need for potential reductions to critical services at a time when New Yorkers would otherwise be in most need of our support,” Washington wrote.
Washington reminded state agencies that Gov. Kathy Hochul has asked them to come up with strategies that will soften the blow for the state’s vital programs. In this letter, he went further, asking them to go through their operations with a fine-tooth comb — finding programs and policies that are outdated or obsolete, which can potentially be grounds for restructuring or outright repeal. He described the move as an effort to alleviate the regulatory burden the state places on individuals and businesses.
“Economic pressures do not only pertain to the state of New York,” Washington said. “We need to work to alleviate the regulatory burdens we impose upon individuals, businesses and nonprofits that serve to further exacerbate New York’s affordability crisis. Therefore, in addition to your budget requests, state agencies should review agency rules, regulations, or public-facing policies and propose for repeal or reform those which are outdated or obsolete. These proposals should be submitted to Counsel’s Office for review and evaluation at the same time as when you submit your budget requests.”
Agencies will have to show their work, submitting those proposed reforms with their overall budget request on Oct. 24.
Once the governor presents her executive budget in January, state lawmakers will then conduct hearings before and offering their rebuttals in March when budget negotiations begin in earnest. The three parties are expected to come up with a deal by April 1, though budgets several weeks late are commonplace under the Hochul administration. Ahead of that process, Assemblymember Sarah Clark told Spectrum News 1 that she hopes agencies and budget officials take a close look at what programs are most useful to New Yorkers
“My hope is that we take a scalpel to the budget rather than taking an axe and just start hacking things. I hope we’re really delicate in looking at where things are super critical for our families, things that check a lot of boxes and make a lot of things happen,” Clark said.
Republican state Sen. Rob Rolison expressed a similar sentiment.
“What are the priorities of state government? What are the things that we need to fund first that are the essentials that have the effect of making things better for folks that then contribute to their development, their family development, the economy,” he said.