Here’s what’s in the FY 27 New York state budget

The confusing, frustrating budget cycle is approaching an end nearly two months after the April 1 deadline, more than two weeks after Hochul declared a budget victory, and nearly five pay periods since state lawmakers have received a paycheck. The final spending plan is expected to be $268.5 billion, according to the state Division of Budget. 

Though many aspects of the budget had previously leaked in bits and pieces, there were still changes even after matters were reportedly settled. The printed legislation sheds some light on the details of policy issues that Gov. Kathy Hochul and legislative leaders have debated for months in secret.

Before this week, only one out of ten bills – debt service – had received approval, and that’s only because late passage of that measure would mean New York defaults on its loans. Lawmakers started debating and passing the nine remaining bills this week, with plans to wrap up next week. It’s fitting that the latest state budget in 16 years would also have an abnormally sluggish and lengthy voting schedule, split by the Memorial Day holiday.

Lawmakers voted to pass the Education, Labor and Family Assistance, and Public Protection and General Government bills this week, and expect to pass revenue and a likely “Big Ugly,” or omnibus legislation jam-packed with several of this cycle’s most controversial policy items sometime next week. Here’s what to know about what legislators have approved so far. This post was last updated on May 22.

Immigration protections

The protections lawmakers approved Thursday go a little further than what the governor had originally proposed in her Local Cops, Local Crimes Act in January, but still fell short of the New York for All Act lawmakers wanted. 

Banning local agreements

Under the approved language, local law enforcement will be prohibited from signing contracts with Immigration and Customs Enforcement known as 287(g) agreements and other contracts with federal immigration officials. Those agreements formalize the working relationship between localities and immigration officials, including information sharing, honoring detainer requests, use of local jails and even deputizing local police to enforce civil immigration law. 

Notably, the language also prohibits informal agreements that are functionally the same  as a 287(g) agreement, just without the contract. However, it doesn’t completely ban all informal collaboration, which is something the New York for All Act would do, and which lawmakers had pushed Hochul to include. 

Suing ICE agents

The budget creates a mechanism for New Yorkers to sue ICE and other federal agents over constitutional rights violations, retroactive to January 2025. It additionally empowers the state attorney general to receive and investigate those complaints.

Sensitive locations

Lawmakers approved legislation in the spending plan that designates a large number of places around the state as “sensitive locations” that ICE cannot enter without a signed judicial warrant. Those include healthcare facilities, houses of worship, public and private schools, childcare facilities, parks, playgrounds and polling places. Additionally, state and local employees – excluding law enforcement – will be prohibited from collaborating with ICE for any civil immigration enforcement.

Education

Total school aid will again hit all-time highs, with the final budget including about $39 billion in education funding. That includes a guaranteed 2% increase to Foundation Aid to every school across the state for a total of over $27 billion. That amounts to a $200 million increase compared to last year’s budget, with $143 million of that increase going to New York City. The final spending plan also has some tweaks to the Foundation Aid formula to provide additional aid for English language learners, students in foster care and homeless children.

Universal pre-K

The budget also has an updated funding formula for statewide universal pre-K based on enrollment, full-day or half-day programs and other factors. All districts must provide full-day pre-K access to eligible 4-year-olds by the 2028–29 school year.

Electric bus mandate delayed

The state mandate for schools to only buy or lease electric school buses was pushed back five years to 2032. The deadline for districts to solely operate and maintain zero-emissions buses and vehicles was extended to 2040. The change was opposed by environmental advocates, but is expected to save school districts money.

Mayoral control

New York City Mayor Zohran Mamdani got a two-year extension of mayoral control of schools in the Big Apple. It was less than the four years he requested, but still he has come a long way from the campaign, when he suggested that he would not seek a renewal. Mamdani never proposed how to run public schools in the absence of mayoral control despite his critical take on the practice.

Public safety

One of Hochul’s budget priorities that received little pushback, and therefore was out of the spotlight early, was her proposals to crack down on the printing of 3D guns and glock switches. Once the budget is signed, it will be a class D felony for a person to manufacture a major component of a firearm, machine-gun, ghost gun, unfinished frame or receiver, firearm silencer or assault weapon or any component parts without a license. It also created safety standards for firearm prevention technology for 3D printers.

The public protection bill passed Thursday also establishes a crime for the unlawful use of a drone and creates “the New York state blue list,” which requires state agencies to only buy drones and related equipment from vendors on its own registry.

Auto insurance

The general government bill included some, though not all, of the car insurance reforms Hochul wanted that emerged as key sticking points in the prolonged budget debate. Lawmakers approved some of the less thorny aspects of the broader changes on Thursday, including a provision to prevent insurance “red-lining” that Hochul had not originally included. The budget will prohibit insurers from using consumer data like zip code, education level and homeownership to set individual premiums. The approved bill also will end a provision that has allowed insurers to unilaterally raise rates by up to 5%, another measure added by legislators. 

NYC zombie charter revision commissions

Mamdani asked the Legislature for a solution to address the city charter revision commission formed by his predecessor, Eric Adams, and legislative leaders delivered. 

The budget includes a provision to allow mayors to nullify commissions convened by a previous administration after they leave office. It was a late addition in spending plan negotiations, with state lawmakers learning about the plan for the first time earlier this week, or seven weeks after the April 1 deadline.

Housing

J-51 renewal

The less-sexy cousin to 421-a/485-x, the J-51 tax abatement for building and apartment improvements or preservation in New York City received a 10-year renewal in the budget to extend it beyond its expiration date this year. Currently, eligible projects must be completed by June 30, but the budget extends that to 2036. It incentivizes building owners to make necessary improvements – including those to adhere to the city’s climate law – while ensuring at least some affordable housing is included.

The final spending plan largely adopted Hochul’s initial proposal for extending the program, and includes an option for a 10-year tax abatement period instead of the usual four-year period. Eligible buildings must be at least 50% affordable, similar to the previous version of the program, as negotiations ultimately did not pan out for a legislative proposal for higher levels of rent stabilized units.