May 27, 2026

Attached is a detailed review of the final budget provisions in the Health/Mental Hygiene budget bill.  

Please feel free to send me a note or call me tomorrow if you have any questions.  

Have a good night.

Lauri 

May 27, 2026

Governor & State Legislature Reach Agreement on $268.5 Billion Budget for SFY 2026-27
Nearly two months after the April 1 constitutional deadline, New York lawmakers are in the midst of finishing the SFY 2026-27 final state budget. With the final spending plan totaling about $268.5 billion, the budget includes major policy changes across climate, immigration, education, public safety, pensions, and more. Immigration measures include banning local ICE cooperation agreements and expanding protections for “sensitive locations” such as schools and hospitals. Education funding will reach a record $39 billion, expands universal pre-K, and delays the electric school bus mandate. Housing reforms renew the J-51 tax incentive and ease environmental review rules to speed up construction of affordable housing. 

Additionally, a major point of contention during negotiations, climate policy changes delay emission regulations and soften some targets under the historic Climate Leadership and Community Protection Act. The budget also creates a new tax on luxury second homes, a 75% tax on nicotine pouches, eliminates state income taxes on tips, and includes pension reforms lowering retirement contributions and the retirement age for teachers to 58 after 30 years of service, down from 63. Additional measures add new oversight for utility rate hikes, target “super speeders,” crack down on ghost guns and drones, and give NYC the ability to delay some pension payments.

The budget bills are currently being passed by lawmakers, with two major ones already approved and signed by the Governor. Legislators will begin the last days of the scheduled 2026 session next week. They will be quick to return to their districts on or shortly after June 4th as many face competitive primaries, especially in New York City.

Below please find our sector-by-sector update related to the Health/Mental Hygiene provisions of the final budget. Upon review, please let us know if you have any questions or if you would like additional information on any of the budget items. Thank you.