January 23, 2025

Below and linked please find an updated sector-by-sector summary that brings together what we know at this juncture regarding SFY26 executive budget proposals in the areas of Health/Mental Hygiene.

If you have specific questions re: any specific proposal/s, please feel free to contact me at your convenience at 518 461-8200 or lauri@nyscouncil.org

January 23, 2025

RMS Health/Mental Hygiene Executive Budget Update for SFY 2026
On Tuesday, Governor Kathy Hochul released her SFY 2026 Executive Budget, totaling $252 billion, an increase in spending by 3.6% from the current year budget. The proposed spending proposal for the 2025-26 fiscal year enacts the Governor’s Affordability Agenda which she outlined the vision of during her State of the State Address last week. The Executive Budget proposes to extend until 2032 a 10.9% tax on the highest earners in our State (those earning $25 million or more), first enacted in 2020 and set to expire this year. The Governor has already announced a $3 billion rebate check ranging from $300-$500 for those making up to $300,000 and the budget released today includes a middle class tax cut for joint filers making $323,000 or less, a child care tax credit capped at $1000 and free breakfast and lunch for public schoolchildren.

The Governor’s budget does not include any contingency measures if President Trump and the Congress move to reduce funding to New York and other states.  It does not include funding for migrant support services given the actions that the new President has committed to taking. The Governor has also said that there will need to be negotiations between herself, the Legislature and the MTA on a plan due April 1st to address the estimated $33 billion hold in the MTA’s capital plan. Additionally, the Governor is proposing to split the cost with NYC of expanding police patrols on NYC subways and providing $16 million to expand a law that enables involuntary confinement of individuals with serious mental illness.

Finally, the Governor is proposing to provide $13.5 million for schools to enact a cellphone ban starting next fall, $37.4 billion in direct aid for schools (a $1.7 billion increase from the current year) and $35.6 billion in state spending for Medicaid (a 14% increase overall) including proceeds from the recently CMS-approved MCO tax. The Legislature released its joint budget hearings schedule yesterday as part of ten-week budget negotiations process to reach a final agreement by April 1, 2025, the constitutional deadline for when a new budget is to be put in place for SFY 2026.

Following our review of the Executive Budget bills, we have developed the attached sector-by-sector summary of the Governor’s Health/Mental Hygiene budget proposal for SFY 2026. Upon review, please let us know if you have any questions or if you would like additional details on any of the proposals. Thank you.