The most important things included in the state budget

Lawmakers finished passing a $254 billion budget Thursday night, over a month after its statutory deadline. Negotiations on mostly non-budgetary policy issues fed into a protracted process, delaying firm decisions on the fiscal portion of the spending plan. 

Gov. Kathy Hochul didn’t wait that long to celebrate her priorities making it into the budget, albeit in updated forms. The governor announced a “general agreement” on a budget deal on April 28 and then began a statewide victory lap, though it took more than a week for the budget bills to be finalized and printed. In the end, her proposals for discovery reform, loosening involuntary commitment regulations, a bell to bell cellphone ban, penalties for masked crime, inflation rebate checks, new primary rules for lieutenant governors and more made it into the final budget.

Lawmakers had reason to celebrate too, with universal school lunch, a pilot for the Housing Access Voucher Program, and (more controversially) a funding structure for the Metropolitan Transportation Authority’s Capital Plan and concessions on a Foundation Aid formula all getting across the finish line and making it into the final budget. 

Criminal justice

Hochul made it clear that changing the state’s discovery laws would be one of her biggest asks in the budget, similar to past years when she focused on rolling back parts of the state’s 2019 bail reforms. After a charm offensive with prosecutors to build up public support, weeks of delay and intense pushback from legislators, the final spending plan included tweaks to the law that simultaneously had Hochul declaring victory and staunch opponents of rollbacks claiming success in preserving the law. The changes raise the standard slightly for dismissing cases due to missing evidence, which Hochul said would stop judges from dismissing cases over minor errors. But lawmakers successfully kept evidence-sharing requirements meaningfully tied to the state’s speedy trial law, which public defenders have said preserves the heart of the initial reforms.

The final budget also tackles the issue of mask-wearing in order to conceal one’s identity. After a rise in antisemitic incidents around the state and the prevalence of mask-wearing at pro-Palestine protests where alleged acts of antisemitic took place, several Jewish groups began pushing to criminalize masking in certain instances. Hochul jumped on to support enacting a measure as well, though it faced strong opposition in the Legislature. Originally, Hochul and supportive legislators sought to create a new crime of masked harassment. Instead, the final budget provision would create a new Class B misdemeanor as an added charge if someone wears a mask in order to hide their identity while committing or fleeing from a Class A misdemeanor or higher. 

Education

The state budget commits $37.6 billion in school funding, which includes $26.4 billion in Foundation Aid. That’s a $1.7 billion increase in overall money, and a $1.4 billion increase to Foundation Aid. On that main funding formula, state leaders agreed to make some changes to reflect changes in the state since they started using it two decades ago. Census data from 2000 was swapped with more updated poverty data and free and reduced lunch information was removed in favor of data representing the economically disadvantaged. The regional cost index will be factored into school aid runs, with Westchester being decoupled from New York City and the Hudson Valley. Schools will get a guaranteed 2% increase in funding each year and increased funding was allotted for districts with English Language Learners. However, New York City public schools are scheduled to receive less funding than expected, leaving some advocates miffed.

The final budget also has major implications for private schools by making changes to the law governing substantial equivalency standards that were meant to kick in by this summer. While it affects all private schools, the issue is most prevalent for some Hasidic and Haredi yeshivas that have faced allegations of failing to offer students a secular education substantially equivalent to public schools. Many Orthodox Jews, meanwhile, view the law as state overreach in personal and religious choices made by parents. The agreed-upon changes in the final budget include a delay to meeting the state standard for many grades, effectively offering several more years for schools to come into compliance. It also eases some of the requirements and offers individual schools more control over how they achieve compliance.

In another victory for the governor, she and legislative leaders agreed to a bell-to-bell cellphone ban in public schools. The proposal was popular among both parents and teachers and was among the easiest lifts for Hochul to achieve – though it did face some minor opposition in the state Senate, which had proposed a slightly laxer version of the ban.

Affordability 

All three state leaders celebrated a variety of measures included in the final budget meant to make New York more affordable for low- and middle-income residents. The governor’s “inflation rebate” checks made it into the spending plan, albeit with slightly smaller sums being sent to millions of New Yorkers. Low- and middle-income families will get $400, while individuals will receive $200. Legislators had supported expanding the state’s child tax credit, which got included as well. Through a $400 million investment, the tax credit will continue for three more years, with the credit amount for children four and older increasing to $330 and then $500.

The budget includes tax cuts for around 75% of New Yorkers, essentially everyone who is not a millionaire. Those cuts will begin taking effect in the 2026 tax year and will be fully phased in the following year. At the same time, the spending plan extends the state’s millionaire’s tax through 2032, maintaining the higher tax rates on high earners first approved under Gov. Andrew Cuomo that were set to sunset. In more affordability wins, the state is funding universal school meals, a measure supported for the past few years by legislators that Hochul didn’t back until this year.