Alliance Alert: State leaders have announced a general agreement on this year’s budget, signaling that negotiations are entering their final phase. While this framework represents important progress, the work is far from over. As the article notes, lawmakers and the Governor must now finalize the details, including exact funding levels and how resources will ultimately be allocated before the budget is passed.
This means the next few days are critical.
As final numbers are negotiated and written into legislation, this is our last opportunity to ensure that key priorities for the mental health and substance use community are included in the final budget. We must continue pushing for investments that will strengthen services, protect rights, and support recovery for New Yorkers across the state.
Our top priorities remain clear:
- A 4% targeted inflationary increase to stabilize providers and the workforce
- $15 million for Daniel’s Law initiatives to build a health-led crisis response system. Send the Governor and Legislature messages calling for this in the final budget by clicking here: Take Action Today
- Restoration of adult home resident advocacy and protection funding
- Passage of the Treatment Court Expansion Act to expand diversion options and reduce incarceration
- And other critical investments that strengthen recovery oriented services
These are not abstract policy asks. They are essential to ensuring people can access the services they need, maintain stability, and live in their communities with dignity and support.
As budget negotiations move quickly toward completion, the Alliance will continue to provide opportunities for direct advocacy to make sure our voices are heard in this final stretch. Your engagement will be key in determining what makes it into the final budget!
We are close, but the details matter. Let’s make sure this budget delivers for all New Yorkers!
NY Gov. Hochul, Top Lawmakers Strike Deal on $268B State Budget
By Jon Campbell, Samuel King, and Jimmy Vielkind | Gothamist | May 7, 2026
New York Gov. Kathy Hochul on Thursday announced a framework deal on a $268 billion state budget that includes money to help New York City and other municipalities close their deficits, adds limits on local police cooperating with federal immigration enforcers and creates new rebate checks to help defray the cost of utility bills.
The emerging agreement with legislative leaders will also roll back the state’s climate change mandates, reshape the state’s auto-insurance laws and eliminate an income tax on tips. Hochul hopes the insurance reforms will drive down rates, a priority for the Democratic governor as she runs for reelection on a pledge of making the state more affordable.
Among dozens of other measures, the wide-ranging deal includes a boost in retirement benefits for state and local employees. Labor unions have been seeking the pensions sweetener for years, but fiscal conservatives warn it could drive up local property taxes.
Despite the 5.5% increase in spending from the prior year, the Democratic governor said the budget would make New York more affordable for its citizens.
“ We’re delivering on affordability, on safety, on childcare, on the environment, and on housing,” Hochul said Thursday at the state Capitol. “This budget is the culmination of an ambitious agenda I laid out in January.”
The “general agreement,” as Hochul put it, covers the major pillars of the budget and broke what’s been a weekslong stalemate over a final spending plan, which was due April 1.
Final details need to be ironed out before the terms are written into legislation and put to a vote. Should lawmakers approve the bills as expected, it will be the latest New York state budget since 2010, when negotiations dragged into the summer. Hochul has presided over five state budgets since taking office in 2021, all of which have been tardy.
Legislative leaders did not appear with Hochul at her announcement Thursday, but had signaled in recent days that they were getting closer to reaching a deal.
Money for municipalities
Under the deal, the state will make billions of dollars available to New York City and tens of millions of dollars available to other cities to help them deal with ongoing financial struggles.
In New York City, that means $1.5 billion in additional aid, $1.2 billion for a child care expansion and a tax on pricey unoccupied second homes that state officials expect to bring in $500 million a year for the city.
New York City Mayor Zohran Mamdani, a democratic socialist and unlikely ally of the moderate governor, had sought steeper income and corporate tax hikes to fund even more programs. Hochul pared back that ambition, backing the so-called pied-a-terre tax instead.
But the final details of how the tax will be implemented still haven’t been hammered out, despite Hochul’s announcement Thursday. State and city finance officials have struggled to come up with a reliable method for determining which second homes have an actual market value of $5 million or more, the threshold for qualifying for the tax.
The governor’s hometown of Buffalo is slated to receive at least $40 million while the cities of Albany, Rochester and Syracuse are also in line for additional funding, though final details have not yet been released.
Limiting immigration cooperation
Under the budget, state and local police agencies would be prohibited by law from contacting federal immigration authorities about people they encounter during non-criminal enforcement, like traffic stops. Places with stricter sanctuary policies, including New York City, would continue to restrict a broader subset of coordination.
The deal also bans formal 287(g) cooperation agreements with U.S. Immigration and Customs Enforcement and bars county jails from renting space to the agency. Lawmakers agreed to versions of Hochul’s proposals to expand sanctuary locations, including schools and hospitals, where civil immigration enforcement is barred.
The immigration-related measures drew a threat earlier this week from Tom Homan, President Donald Trump’s border czar. He threatened to send additional immigration enforcers to New York if state policymakers followed through with legislation to limit cooperation with ICE.
Utility rebates, climate change and more
Hochul first introduced her budget proposal in January, painting several of her priorities as a way to reduce costs for New Yorkers — or at least stem their growth.
As part of the budget agreement, she was able to convince legislative leaders to get on board with changes to the state’s auto-insurance laws that will limit payouts to people found mostly responsible for a wreck. But she had to agree to tighter rules for insurance companies, who will have to seek prior state approval before implementing any rate hikes and face stricter limits on the profits they can take in — both of which were priorities for lawmakers.
The insurance changes mark a major win for Uber, the ride-hailing app that spent more than $9 million on an advertising campaign urging lawmakers to get on board. The changes were opposed by the New York State Trial Lawyers association, who argued that they would take legal rights away from crash victims.
Lawmakers, meanwhile, got Hochul on board with rebate checks for New York residents dealing with soaring gas and electric costs.
First proposed by the Assembly and embraced by the Senate, Hochul came around to the idea of sending $1 billion in checks to utility-paying households, depending on income.
Hochul and lawmakers are also set to eliminate a lengthy environmental review for some housing projects in New York in hopes of getting apartments and condos built more quickly, a move backed by Mamdani.
On climate change, Hochul insisted on scaling back a 2019 mandate that requires the state to cut its carbon emissions 40% by 2030, a goal the state was on track to miss. A separate mandate of cutting emissions 85% by 2050 will remain in place.
The move put Hochul at odds with environmental groups angered by her about-face on the climate mandates, which the governor had previously touted. But Hochul’s administration had warned that complying with the 2030 mandate had the potential to hike utility rates and gasoline prices, which ran afoul of her affordability agenda in her reelection campaign.
“New York has led and will continue to lead on clean energy and climate. But reality is harsh. We can not meet the current timelines without driving energy costs higher. The facts bear that out, and I cannot let that happen,” Hochul said.
Next steps
Hochul’s office and legislative staff members will now work to write the deal into a series of nine bills that lawmakers will put to a vote over the course of multiple days.
Even before the deal was struck, legislative leaders expressed confidence that voting would take place next week.
”We’re nearing the beginning of the end,” Stewart-Cousins said Tuesday. “I really do believe that.”
NY Gov. Hochul, top lawmakers strike deal on $268B state budget – Gothamist