New York’s Fiscal Watchdog Expresses Concern with Gov. Hochul’s Proposed $252B NYS Budget

On January 21, Gov. Hochul revealed highlights of the proposed New York State Fiscal Year 2026 (FY26) Executive Budget, leveraging strong revenues and continued economic growth to support the $252 billion price tag. However, the Citizen’s Budget Commission (CBC), a nonpartisan, nonprofit civic organization that serves as the state’s independent fiscal watchdog, points to the growing $11.0 billion gap by FY29 that the Executive Budget projects, and even more concerning, the state’s much larger $18.5 billion structural imbalance. Based on the currently proposed budget, state spending will increase roughly 10% next year; and despite a multi-billion-dollar surplus, there is no new deposit to ‘Rainy Day’ reserves, currently at $21 billion, or needed capital investment at the MTA. The CBC further points out that there is no “initiative to restrain Medicaid spending, which is the biggest budget buster” and as proposed, will increase by $14.3 billion from the current year; or attempt to restrain State school aid spending growth, by “eliminating hold harmless or redirecting some of the state’s $2 billion in aid sent to wealthy districts that don’t need it to fund a sound basic education” — savings that could be redirected to cover the $5 billion cost of the proposed expansion of the child tax credit, inflation refund, and middle-class tax cuts that could improve New Yorkers’ lives.