New York Governor Hochul announced a $268 billion state budget framework that would limit cooperation with federal immigration authorities and include a one-time $1 billion energy rebate, but Assembly Member Carl Heastie cast doubt on whether a true deal had been reached.
announced a $268 billion state budget framework Thursday that would sharply limit cooperation with federal immigration authorities and include a one-time $1 billion energy rebate — but Assembly Member and Speaker Carl Heastie quickly cast doubt on whether a true deal that’s six weeks overdue had been reached.came over a month after the state’s April 1 budget deadline.
While Hochul outlined major policy agreements, she offered few firm answers on several issues central to New York City’s budget picture, including class-size mandate funding, whether the city would receive AIM-style municipal aid and the cost of possible Tier 6 pension changes. The governor also said details of a proposed pied-à-terre tax, a tax on luxury second homes for non-residents, were still being finalized.
But one City Hall revenue request appeared to remain off the table: Hochul had already rejected Mayor Zohran Mamdani and Council Speaker Julie Menin’s However, Heastie told reporters in Albany immediately after Hochul’s announcement that there was no budget deal, saying too many spending questions remained open..
“I’m gonna only talk about policy, and then when I think the Legislature is giving me what I want on policy, then we’ll talk about money. There’s so many open issues on money. … We’ve signed off on nothing major. … Budgets are supposed to be about money.
”, struck a more optimistic tone than Heastie but acknowledged that negotiations were still unfinished. He said the city had seen progress toward closing its budget gap and that he remained in regular contact with Hochul, Heastie, and Senate Majority Leader Andrea Stewart-Cousins.
“The reason that we focus so much on getting that deficit number down to zero is if we are to get there, then it means we do not have to raise property taxes, we do not have to make cuts. We do not have to raid our reserves,” Mamdani said.
The mayor said the city still plans to release its executive budget on Tuesday, as state negotiations continue, after originally delaying the release earlier this month due to the drawn-out talks. He also said the issue of mayoral control of schools remains unresolved, saying “we always have to wait until the final budget agreement,” but that he has made clear to Albany that continuing mayoral control is part of his agenda.
Fiscal watchdogs also warned that the announcement left major budget questions unanswered. Andrew Rein, president of the Citizens Budget Commission, said Hochul had announced “BudgetPolicyPalooza 2026” was winding down but that “we have yet to see a budget. ” “The bottom line: The State made great progress on policy but perpetuated long-run fiscal risks,” Rein said.
“What we do know is that the budget is bigger, but not likely better for fiscal stability compared to the Governor’s proposal. ” Rein said much remains unknown about the final aid package for New York City and argued the state should relieve the city from the class-size reduction mandate, while the city should pursue deeper spending efficiencies, rather than rely on a pied-à-terre tax or other tax increases. Republicans seized on the confusion of Thursday’s announcement.
Assembly Member Michael Tannousis said the vote on a 10th budget extender showed “the incompetence and dysfunction coming from Gov. Hochul,” arguing that New Yorkers have been given conflicting explanations for why the budget remains unfinished.
“Instead of transparency and leadership, New Yorkers are watching public finger-pointing, political games and chaos unfold while families continue to struggle with rising costs, high taxes and uncertainty coming out of Albany,” Tannousis said. Hochul, speaking earlier in Albany, described the announcement as a “general agreement” with legislative leaders and said final details would be worked out as lawmakers confer and vote on budget bills in the coming days.
She said the all-funds budget is expected to total about $268 billion, with $15 billion in reserves and no increase in statewide income or business taxes. The governor framed the agreement as a response to rising costs and aggressive action by the Trump administration, saying Washington had made life harder for New Yorkers. She said the budget would deliver on affordability, public safety, child care, housing and environmental policy.
The budget framework’s immigration provisions would prohibit local law enforcement from being deputized by U.S. Immigration and Customs Enforcement for civil immigration enforcement, bar state and local police from acting as civil immigration agents and restrict ICE access to sensitive locations, including schools, libraries, health care facilities, polling places and homes, without a judicial warrant. Hochul said the state needed to act as a “guardrail against ICE overreach,” accusing the Trump administration of targeting families, workers, students and children in addition to people accused of serious crimes.
Hochul was also asked whether she had spoken with Trump or border czar Tom Homan after Homan threatened to “flood” New York with ICE agents if the state restricts local cooperation with immigration authorities. She said she had not, adding that Homan had previously told her “the era of the surges is over” and that she viewed his latest remarks as an attempt to threaten her.
The agreement would also create a state right to sue federal, state and local officials, including ICE officers, for constitutional violations, and ban federal, state and local law enforcement officers from wearing masks while on duty, except in limited circumstances. Hochul described masked immigration enforcement as an intimidation tactic. She said the immigration package would not prevent state and local officials from cooperating with federal authorities in criminal cases.
“We’ll help you go after the hardened criminals, the violent, the worst of the worst,” Hochul said. “But, my God, it has gone too far. ”On affordability, Hochul said the framework includes a one-time $1 billion energy rebate to help New Yorkers with rising utility bills. Asked after the announcement who would qualify and how much households would receive, she said the money would come from the general fund but that allocations would be announced later.
The energy package also includes what Hochul called a ratepayer protection plan. According to the governor’s office, it would require utilities seeking rate increases to submit a budget-constrained option, tie executive pay to customer affordability and prevent customers from being charged for lobbying, political contributions and certain executive travel costs. Hochul also announced changes to the state’s climate law, saying New York could not meet current timelines without driving energy costs higher.
Administration officials said the agreement includes a new 2040 target for a 60% reduction in emissions and regulations to be issued in 2028. The framework includes a major child care package, with Hochul saying the state would invest $4.5 billion in child care and prekindergarten statewide.
The plan includes funding intended to make prekindergarten available to all 4-year-olds by the start of the 2028-29 school year, support for New York City’s 2-Care program, expanded child care assistance and development of a “First 3” program for children up to age 3. Hochul also announced auto insurance reforms that she said are intended to reduce premiums by cracking down on fraud and limiting certain lawsuits.
The plan would cap payouts for drivers engaged in criminal behavior at the time of an incident, limit certain claims by drivers mostly at fault for crashes and restrict insurers from setting rates based on factors such as homeownership, occupation, education level or ZIP code. The budget framework would also change the State Environmental Quality Review Act to speed some housing and infrastructure projects.
Hochul said the changes are intended to prevent environmental review from being used to block projects that local communities support. Under the proposal, certain housing projects on previously disturbed land and connected to water and sewer systems would be exempt from duplicative environmental review. In New York City, qualifying projects of up to 500 units in medium- and high-density areas would be exempt, while projects of up to 250 units would be exempt in the rest of the city.
The Citizens Budget Commission, however, questioned whether the energy rebate would provide meaningful relief. Rein said the $1 billion would likely be spread too thin and argued the money would be better used to bolster recession reserves, which he said are less than half of what the state budget office says may be needed.
Rein also warned that adding $5 billion above Hochul’s executive proposal for fiscal year 2027 would likely widen future budget gaps because the new spending is not funded long term. He also criticized continued increases in school aid to shrinking districts as “unwise and unfair” given the state’s other needs.
Still, Rein praised several of the policy changes Hochul announced, including SEQR reforms he said could reduce costs and speed housing production, auto insurance changes he said would save New Yorkers money and climate-law changes he said would better balance emissions reduction with affordability. But he said the final agreement should bring New York’s emissions accounting in line with other states and commit to a well-designed cap-and-invest program.
On public safety, Hochul said the framework includes a first-in-the-nation requirement that every 3D printer sold in New York include software to prevent it from printing firearms. The budget would also increase penalties for manufacturing ghost guns and require gun manufacturers to prevent firearms from being easily converted into illegal machine guns.
The agreement includes $352 million for gun violence prevention programs, $77 million for the NYPD to police the subway system and $25 million to expand the MTA’s SCOUT program for people with severe mental illness in the subway system. It also expands subway platform barriers and requires New York City drivers with 16 or more speed camera violations in a year to install speed-limiting devices.
Hochul said the budget would also establish buffer zones around places of worship, invest another $35 million in Securing Communities Against Hate Crimes grants and restrict drones near sensitive locations, including schools. The framework includes nearly $40 billion in school aid statewide. Budget Director Blake Washington said each school district would receive at least a 2% increase, with other school aid variables still under consideration by lawmakers. Hochul did not provide a final figure for New York City class-size funding.
On health care, Hochul and Washington said Medicaid spending would be roughly similar to the governor’s proposal and that the state would maintain funding for hospitals and nursing homes, but they did not provide a full breakdown during the announcement. The governor’s office said the budget includes $1 billion in new funding for safety-net hospitals and $500 million in additional support for distressed hospitals.
The budget framework also includes a record five-year, $3.75 billion commitment for clean water infrastructure, $1.4 billion for local roads and bridges, $75 million for transit projects related to Jamaica Station and the Second Avenue Subway, and $17.5 million to make Teen Mental Health First Aid training available to all 10th graders statewide. But despite Hochul’s lengthy list of policy announcements, the state budget remains unfinished.
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New York State Budget Immigration Authorities Energy Rebate Carl Heastie Assembly Member Speaker New York City Budget Class-Size Mandate Funding AIM-Style Municipal Aid Tier 6 Pension Changes Pied-À-Terre Tax Luxury Second Homes Mayor Zohran Mamdani Council Speaker Julie Menin Budget Deal Open Issues Money Negotiations Budget Gap Property Taxes Cuts Reserves
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