Assembly's $256.5 Billion Proposed Budget Puts Money Back in the Pockets of Hardworking New Yorkers

Speaker Carl Heastie and Assembly Ways and Means Committee Chair J. Gary Pretlow today announced the Assembly will pass a $256.5 billion State Fiscal Year (SFY) 2025-26 Budget proposal that will put money back in the pockets of New Yorkers, and invest in critical programs that support the needs of our most vulnerable populations.

“This proposed budget is an investment in New York’s families and in its future,” Speaker Heastie said. “It will put money back into the pockets of hardworking New Yorkers, while making critical investments in education, higher education, housing, health and mental healthcare, and ease the burden on our small businesses.”

“The Assembly Majority is committed to making our state a better, more affordable place to live, work and raise a family,” Assemblymember Pretlow said. “Our proposed budget will cut taxes for millions, while funding programs vital to New Yorkers, from education to housing to transportation. We will continue fighting to invest in our families and our communities.”

Putting Money Back in the Pockets of Hardworking New Yorkers

The Assembly’s proposed budget includes a low- and middle-income tax cut, which would provide a one percent tax cut for certain taxpayers with incomes below $323,000. Approximately 8.3 million New Yorkers would benefit from this, with an average tax cut of $446 in SFY 2025-26 and $528 in SFY 2026-27.

It would also create the new New York Works Tax Credit, which would consolidate the existing Empire State Child Tax Credit, the state Earned Income Tax Credit (EITC) and the dependent exemption into one combined credit for most taxpayers. The maximum credit amount would be $550 per qualifying child in the first year, rising to $1,600 per qualifying child when fully implemented in year five.

Also included in the Assembly’s budget is the LIFT Tax Credit, which would apply to New Yorkers making up to 150 percent of the federal poverty level with at least one dependent, which would eliminate Personal Income Tax (PIT) completely for certain filers. The credit would apply to around 363,000 New Yorkers with an average benefit for eligible families would be $694.

The budget would create the New York City Renters Tax Credit, establishing a new $275 million PIT credit program for certain New York City renters with incomes under $200,000. The credit would be on a sliding scale, with the maximum amount being $750.

The spending plan also includes the proposal put forward by the governor to issue inflation refund checks. Single earners with income below $150,000 would receive $300 and those filing jointly with income below $300,000 would receive $500, based on their 2023 tax filing status.

Revenue

The Assembly’s budget proposal would include an increase of the PIT rate for high income earners. Those making $5 million to $10 million would go from 10.3 percent to 10.5 percent. Those making $10 million to $25 million would go from 10.3 percent to 10.75 percent. Those making $25 million to $100 million would go from 10. percent to 11.75 percent. Those making above $100 million would go from 10.9 percent to 12 percent.

The proposed budget would also increase rates on certain businesses from 7.25 percent to 9.25 percent on income over $10 million.

Helping Small Businesses

When New York went “on pause” during the COVID-19 pandemic, more than a million people lost their jobs through no fault of their own. Paying unemployment insurance (UI) to these New Yorkers caused the unemployment trust fund to go into more than $10 billion of debt to the federal government. This debt has been, and normally would be, paid by the employers. The $7 billion in the Assembly’s budget would pay back the debt owed to the federal government. Eliminating the debt will lower the rates that New York businesses currently pay into UI system and ensure New Yorkers that lose their jobs are able to receive UI benefits that keep up with the cost of living. UI benefits are currently set at 2019 levels.

The proposed spending plan would further ease the burden on small businesses and farms by increasing their tax deduction from 15 percent to 25 percent of net income, gain, loss and deduction.

Also included in the proposed budget is the Work Opportunity Tax Credit, which would be available to employers that hire individuals from targeted groups including veterans, formerly incarcerated individuals, those that qualify for certain social services program and others.

Education

The Assembly proposes $38.5 billion in funding to the General Support for Public Schools (GSPS), a $2.7 billion increase from the 2024-25 school year (SY). 

This proposal also includes $27 billon in Foundation Aid and includes changes to the Foundation Aid formula by:

• Updating the Regional Cost Index (RCI) to either be the greater of the 2006 index or the 2024 updated values for each of the nine regions;
• Increasing the English Language Learner Factor of the Pupil Needs Index from 0.5 to 0.65;
• Lowering the Income Wealth Index floor from 0.65 to 0 over three years; and
• Providing a minimum year over year increase in Foundation Aid of 2.9 percent.

The Assembly’s proposal also provides critical funding to prekindergarten programs to ensure all children are provided the resources needed to thrive with an additional $327 million for prekindergarten, $302 million to increase the minimum per pupil funding and $25 million for the Statewide Universal Full Day Prekindergarten (SUFDPK) grant.

Higher Education

The Assembly’s budget proposes a $25 billion investment in higher education, including $212 million in opportunity programs and critical funding to the State University of New York (SUNY) and City University of New York (CUNY).

The Assembly also makes changes to the executive’s New York Opportunity Promise Scholarship by modifying the proposal to establish the New York College Access Program (NYCAP), which provides free tuition for community college and certain associate degree programs at SUNY and CUNY. Eligibility for the NYCAP does not have restrictions based on age, area of study and having obtained another post-secondary degree to ensure all communities can participate in this program.

Childcare

The Assembly is committed to ensuring that every family has access to safe, affordable childcare, and has included in the proposed spending plan $2 billion for childcare subsidies, $212.5 million over executive’s budget. 

Investing in Our Youth

The Assembly is committed to giving all young people in New York State the tools and resources to have a successful future, including investing in programs to help keep them out of trouble, and to get youths that have committed crimes necessary services to lower their risk of re-offense.

The proposal allows New York City to participate in Raise the Age programming by removing the requirement that localities adhere to 2 percent tax gap or be fiscally distressed. The Assembly also proposes a total of $350 million for Raise the Age programming, $100 million over the executive.

The proposal would also require immediate assessment by probation services upon arrest of a youth and require intensive supervision and support services be offered during the first several weeks following a youth’s arrest.

Additionally, the budget includes:

• $100 million for Afterschool programs serving youths up to age 18, providing funding for an additional 40,000 spots;
• $5 million for afterschool programs serving populations that are at least 50 percent high-needs;
• $2 million in additional funding for Runaway and Homeless Youth for a total of $12 million; and
• $1.5 million in additional funding for a total $23.1 million for the Youth Development Program.

Also included is $100 million to create the Learning Empowering and Developing (LEAD) Summer Youth Program.

Health

The Assembly budget includes critical investments in New York’s hospitals and accessibility of healthcare for New Yorkers, including providing $1 billion for healthcare facility capital needs, as well as restoring $575 to restore the Vital Access Provider Assurance Program (VAPAP) for financially distressed hospital and nursing homes.

The proposal would also reinvest funds from the Managed Care Organization (MCO) tax, which includes adding $100 million in hospital outpatient rate increases for a total of $405 million in hospital investments and $50 million in nursing home, assisted living and hospice rates for a total of $250 million.

Nursing homes are the cornerstone of the healthcare system. The Assembly Majority is committed to ensuring the financial sustainability of nursing homes across the state, and believes that rates need to better reflect the costs incurred by institutions to ensure capacity meets the demand for care.

The Assembly’s spending plan also makes critical investments in programs to combat hunger across the state, including providing an addition $17.2 million for a total of $75 million for the Hunger Prevention Nutrition Assistance Program (HPNAP), as well as an additional $20 million for Nourish New York for a total of $75 million.

Protecting Vulnerable New Yorkers

The Assembly’s spending plan includes $20 million to implement Daniel’s Law pilot programs and $2 million to establish the Behavioral Health Technical Advisory Center (BH-TAC). This center would develop standardized protocols and provide a locality technical assistance for implementing a non-police behavioral health crisis response system, identify methods for improving interoperability between 911 and 988, maintain a database of strategies, collect and analyze data for quality monitoring, and provide information to local communities.

The Assembly’s proposed budget includes $200 million to create the Increasing Nutrition Support for Prenatal and Infant Resiliency (INSPIRE) pilot program. This program would provide a $400 monthly allowance to mothers and infants eligible or receiving public assistance through the last three months of pregnancy and through the first 12 months of the child’s life.

The proposal also includes:

• $100 million for the Rent Supplement Program for a total of $200 million; and
• $100 million for the Homeless Housing and Assistance Program for a total of $253 million.

It would also restore $8.6 million in funding for Temporary Assistance for Needy Families (TANF) programs. 

Housing

The Assembly is committed to investing in programs to improve access to safe, affordable housing for all New Yorkers. The proposed budget would provide $250 million to create the Housing Access Voucher Program (HAVP), which would help those facing homelessness or at risk of homelessness, and $100 million for Mitchell-Lama units and the New York City Housing Authority (NYCHA) to assist with operating needs.

Additionally, the budget includes:

• $750 million for NYCHA, which may be used to use for lead, mold and asbestos remediation;
• $750 million for Mitchell-Lama preservation; and
• $225 million in capital funding for housing authorities outside of New York City.

The Assembly also recommends that no less than $125 million of the $1.5 billion appropriated for supportive housing in the five year housing plan be used to assist individuals who have been incarcerated and are at risk of or are facing homelessness.

In order to put homeownership within reach for New York families, the proposed budget would prohibit certain institutional real estate investors from purchasing one- and two- family homes in the first 90 days the house is on the market.

Transportation

The state’s roads, bridges and transit systems keep New Yorkers and the economy moving. The Assembly spending plan would provide $7.2 billion for the fourth year of the five year Department of Transportation (DOT) Capital Plan, an increase of $298 million over the executive. This includes $1.48 billion in Local Capital Aid, an increase of $150 million over the executive which would support an additional:

• $50 million for Local Pave NY for a total of 200 million;
• $50 million for the State Touring Route program for a total of $190 million; and
• $50 million for a new competitive grant program for costs associated with ADA compliance.

Also included is $319.5 million for non-MTA Transit Capital, an increase of $100 million over the executive, including $26 million for the Niagara Frontier Transportation Authority (NFTA), $20 million for Upstate Transit Capital for a total of $40 million, and $54 million for non-MTA transit capital statewide for a total of $253.5 million.

The Assembly Majority remains committed to discussing new revenue to fund the MTA capital program. The MTA requires long-term, stable sources of revenue to support the capital program to maintain repairs and improve reliability. Revenue sources could include an increase to the payroll mobility tax, a fee on for-hire vehicles and a delivery surcharge. The Assembly also remains committed to exploring ways to improve discount programs to make MTA services more affordable.

Additional Funding

The Assembly’s budget includes an additional $16 million for “traditional” Centers of Excellence, as well as an additional $16.4 million for the Centers for Advanced Technology, which results in a total funding of $2 million for each center.

The proposed spending plan includes $200 million for the Energy Affordability Program to ensure that enrollment can continue to grow and to expand eligibility to those below the state median income.

The Assembly budget proposal also includes $330 million for the EmPower+ program, which helps low- and moderate-income New Yorkers make energy saving improvements to their homes.

Included in the budget is $600 million for clean water infrastructure and $500 million for the Environmental Protection Fund, both of which are funded at $100 million over the executive’s budget.

The proposed spending plan also includes $64.2 million, an increase of $10.8 million over the executive, in aid to localities programs.