New York Governor Proposes $252 Billion Budget with Expanded Tax Rebates and Social Programs

Governor Kathy Hochul's 2026 budget plan includes increased spending on Medicaid, education, and affordability measures, while critics warn of fiscal risks and reliance on federal support.

The $252 billion proposal represents a $9 billion increase from last year, emphasizing affordability measures such as inflation rebate checks, expanded child tax credits, and universal free school meals.
The budget relies on a $5 billion surplus from higher-than-expected tax revenues but is projected to create deficits totaling $23.4 billion through 2029.
Critics argue the plan exacerbates New York's fiscal instability, citing concerns over ballooning Medicaid and education spending and the extension of 'temporary' income tax surcharges.
Federal support is critical to the budget's success, including reliance on an MCO tax approved under the Biden administration, which could face challenges under the Trump administration.
The plan includes a $21 billion rainy-day fund and measures to address housing affordability, though experts warn these initiatives may have limited long-term impact.