As noted in our initial first look at the Governor’s budget released yesterday many of the mental health and substance use proposals previewed in the State of the State are now formally reflected in the Executive Budget. We will continue to closely analyze the budget details as they are released and share deeper dives on specific OMH, OASAS, Medicaid, housing, and criminal️ human services provisions with our members and partners. You can review our initial summary here:https://rightsandrecovery.org/e-news-bulletins/2026/01/20/breaking-hochul-budget-1-7-cola-supportive-housing-youth-services/
As the budget and legislative session move forward, advocacy will be critical. We are excited to come together with members, providers, peers, and advocates from across the state at our Annual Legislative Day on February 10th in Albany. This will be a key opportunity to directly engage legislators and push for the investments and policy changes needed to protect and strengthen mental health and substance use services, stabilize the workforce, and ensure recovery-focused, community-based supports are fully funded during this challenging budget year. We look forward to standing together to make our voices heard. Stay tuned for more details including our full legislative day book and free bus pick up locations around the state!
Medicaid Investments
Governor Hochul’s Executive Budget proposes a significant increase in state Medicaid spending to stabilize New York’s healthcare system amid deep federal uncertainty and funding cuts. The budget increases all-funds Medicaid spending to approximately $48.5 billion, including a nearly $4 billion state investment intended to offset federal reductions driven by H.R. 1 and other federal policy shifts. While overall Medicaid spending grows, total Medicaid funding declines when federal contributions are included, reflecting a more than $10 billion drop in expected federal support. The Administration frames this budget as a necessary response to an increasingly unreliable federal funding environment, particularly for Essential Plan coverage and safety-net services.
Mental Health and Substance Use Services
Within behavioral health services, the budget includes several important investments.
- It proposes a 1.7% Targeted Inflationary Increase for OMH, OASAS, and other human services agencies, along with additional funding to support minimum wage increases.
- The budget invests more than $71 million to increase rates for OMH and OASAS supportive housing programs, helping maintain housing stability for more than 23,000 individuals in recovery.
- Advances integration of mental health and substance use services by allowing providers to operate under a single joint OMH-OASAS license and creating a new Co-Occurring Capable designation to improve care for people with complex needs.
- Strengthens problem gambling prevention and treatment.
Youth Services
Youth mental health is addressed through:
- Expanded Teen Mental Health First Aid training,
- Recognition of schools with strong prevention programs,
- LGBTQ+ specific crisis supports
- opening up to 15 new Youth Clubhouses,
- establishing a Young Adult Recovery Residence for people recovering from opioid addiction,
- expanding Youth Safe Spaces,
- scaling culturally responsive supports for Indigenous youth,
- hosting a youth-led substance use prevention symposium, and
- digital well-being initiatives.
At the system level, the budget continues major hospital and safety-net investments, including more than $1 billion for the Safety Net Transformation Program and additional funding to hospitals and nursing homes through managed care organization tax revenues.
Alliance Advocacy Priorities Moving Forward
While we appreciate several important investments included in the Governor’s proposal, significant gaps remain. As negotiations continue during the 2027 budget cycle, the Alliance will continue to push for a full 2.7 percent Temporary Inflationary Increase to stabilize the behavioral health workforce, the carve-out of behavioral health services from Medicaid managed care, and the creation of a commission to close state psychiatric hospitals and reinvest those funds into community-based services. We will also advocate for dedicated funding for Daniel’s Law non-police, health-focused and peer led crisis response pilots, passage and funding of the Treatment Court Expansion Act, expanded peer-led services, and sustained investments in Housing First and supportive housing.
At a time of unprecedented federal funding instability, it is critical that New York fully protect and strengthen its mental health and substance use service continuum. The Alliance looks forward to working with the Legislature and the Administration to ensure the final budget centers recovery, community-based support, and the long-term sustainability of services New Yorkers rely on every day.