The fiscal year 2025 enacted budget totals $237 billion, an inflation-adjusted decline of 0.4 percent from fiscal year’s 2024 total budget. In non-inflation-adjusted terms (nominal dollars) this represents an increase from fiscal year 2024’s total budget of $231.6 billion.
The housing deal currently under consideration in budget negotiations (as publicly reported) would create new tax incentives for affordable housing developers, weaken certain tenant protections passed in 2019, and impose a watered-down version of “Good Cause Eviction” with significant exemptions and loopholes.
Under the fiscal year 2025 executive budget, inflation-adjusted state funding would fall for a third consecutive year. While State spending rose in response to Covid, it will return to its pre-Covid trend by fiscal year 2025.
FPI's analysis of the legislative and executive budget proposals for fiscal year 2025.
Support for local school districts is New York’s largest single spending program, accounting for more than one-quarter of State spending. After fast spending growth over the last three years, the fiscal year 2025 executive budget aims to curb school aid spending growth. The legislative budget proposals would roll back the executive budget’s proposed cuts to school aid and provide additional support for public higher education. This funding would preserve the current scope of New York’s education system, rather than representing transformative new investments.
The Senate’s fiscal year 2025 budget proposal makes substantial progress toward a comprehensive, ambitious housing package. The policies included address the overall supply of housing using a combination of tax incentives for housing, changes to zoning regulations that will allow for more housing construction, and direct spending on new housing development. The Senate also allocates funds for legal services to support tenants and low-income homeowners. Finally, the Senate proposes the creation of the New York Housing Opportunity Corporation (NYHOC) to purchase and develop new affordable housing in the state.
The one-house budgets reflect a sharp disagreement between the Governor and the legislature on Medicaid spending. The executive budget proposes sharp cuts to several areas of Medicaid spending — most notably home care worker wages — and provides only limited support for financially distressed hospitals.
Housing has again become a key area of negotiations in the current budget cycle. This year’s executive budget laid out a far narrower plan to address New York’s housing affordability crisis than last year’s budget proposal. Meanwhile, the Senate brought forward a new set of housing policy recommendations in its one-house budget proposal, attempting to comprehensively address the housing supply and affordability issues that currently plague the state. But what are these proposals — and are they enough to address New York’s housing crisis?
The legislative one-house budgets come out firmly for higher Medicaid spending, restoring most of the governor’s cuts and offering significant rate increases. But how will they pay for it? The Senate and Assembly budget memos propose to raise $4 billion a year through an obscure mechanism: A tax on Medicaid managed care plans, the private insurance companies which administer most of the state’s Medicaid program.
The DOB’s assumed growth rates for State revenue are very low by historical standards and are out of sync with most forecasts of U.S. economic growth over coming years. FPI expects State revenue growth in FY25 will likely exceed current forecasts by at least $4 billion.
In light of New York’s affordability crisis and the need for deeper State investments to lower the cost of living, the one-house budgets wisely invest in affordable housing, healthcare, and higher education. Additionally, the legislature sensibly rejects the Governor’s proposed cuts to public schools and home care worker wages.
The New York State Senate and Assembly will soon release their proposals for the fiscal year 2025 budget. Following last week’s revenue consensus, the legislature will be able to propose $1.3 billion more in spending than the executive budget. This additional revenue will allow the legislature to restore many of the budget cuts proposed by the executive budget, especially to school aid and home care. The legislature can, however, go beyond restoring the proposed cuts and put forward deeper investments in public services that address New York’s affordability crisis. These investments will require raising additional revenue.
ALBANY, NY | February 13, 2024 The Fiscal Policy Institute released its annual briefing on the Governor's executive budget. The briefing analyzes state fiscal and economic trends as well as major policy initiatives in the executive budget. Download the Book
FOR IMMEDIATE RELEASE: January 16, 2024 Media Contact: press@fiscalpolicy.org June Cash Receipts Continue to Stabilize Following April Volatility "Improving tax receipts and new State aid, combined with lower asylum seeker costs and the customary use of annual reserves, are more than sufficient to balance next year’s budget" ALBANY, NY | January 16, 2024 — In response to the New York City Preliminary Budget for Fiscal Year 2025, Fiscal Policy Institute Director Nathan Gusdorf released [...]
By Andrew Perry, Senior Policy Analyst January 2024 Approximately $2.4 Billion of FY28 budget gap will be due to the Personal Income Tax and Corporate Franchise Tax surcharge expirations. In the fiscal year 2022 budget, New York enacted temporary increases to the personal income tax (PIT) and corporate franchise tax (CFT) rates. PIT rates were raised for tax filers with more than $1 million in annual income, and new brackets were created for filers with incomes over $5 million [...]