Empire State Today

Governor Kathy Hochul has unveiled her fiscal year 2026 executive budget proposal, outlining a total spending plan of $252 billion. The primary expenditures include education and healthcare, with a significant focus on the state's Medicaid program. Recent state tax receipts have surpassed initial projections, driven by robust personal income tax revenue linked to Wall Street's performance. Despite this, projected budget gaps remain at $6.5 billion in 2027, $9.8 billion in 2028, and $11 billion in 2029 under the current spending framework.

The Governor plans to allocate these higher tax receipts towards a one-time inflation rebate program totaling $3 billion. This initiative will provide $300 for single filers earning up to $150,000 and $500 for joint filers with incomes up to $300,000. Additionally, the budget designates $165 million to cover interest on New York’s outstanding Unemployment Insurance (UI) debt. Without this allocation, employers would face an interest assessment surcharge (IAS) during the summer months.

The National Federation of Independent Business (NFIB) has prioritized addressing New York’s UI debt since 2021 and views this as a positive step toward offering relief to small businesses. However, NFIB stresses that fully paying off the UI debt remains essential.

Furthermore, NFIB endorses the Governor's proposal to limit liquidated damages for specific "frequency of pay violations." This amendment to Labor Law 191 would restrict plaintiffs' recovery of damages where employees were paid regularly on at least a semi-monthly basis.

Despite including some of NFIB’s priorities, the executive budget presents challenges such as funding for the Metropolitan Transportation Authority (MTA). A provision commits both New York State and City to contribute $3 billion each towards the MTA's capital plan but does not specify how these funds will be sourced. NFIB is advocating against generating these funds through new or increased taxes.

For more details on the executive budget proposal: [Governor's Executive Budget Briefing Book](https://www.governor.ny.gov/sites/default/files/2025-01/FY2026-Executive-Budget-Briefing-Book.pdf).