“Tax the Rich” Hike Omitted in Gov. Hochul’s $260B Proposed Budget
Although Gov. Hochul’s proposed $260 billion New York State budget is higher than last year’s $254 billion budget, it excludes an increase of personal income tax or corporate tax on the state’s wealthiest residents and corporations, despite billions in federal funding reductions. Instead, the proposed 2026-2027 budget relies on higher-than-expected Wall Street revenues. However, the 7.25% corporate franchise tax rate on companies bringing more than $5 million that was set to expire this year, has been extended three years. As is typical, funding for health care and schools account for large dollar amounts of the budget, the Governor is proposing increases of 11.4% and $4.3% on Medicaid and school aid respectively according to the article by Crain’s New York. The nearly $4 billion increase in Medicaid spending will reportedly offset a portion of the federal funding cuts from the healthcare overhaul by the White House last year. Childcare was the biggest new proposed spending area, “calling for $4.5 billion overall on childcare programs, including $1.7 billion in new funding.” As part of the January 20th speech unveiling the proposed budget, Gov. Hochul also “pointed to the $14.6 billion in rainy-day reserves as a backstop against volatility, including more potential federal cuts, and as essential insurance against recession. The current budget expires March 31, with the budget proposal “forming a basis of negotiations with the state legislature ahead of the April 1 deadline.”