Hochul's $268B budget breakdown: Child care, taxes, ICE, more

NEW YORK - New York Governor Kathy Hochul said she has reached a general agreement with legislative leaders on a $268 billion state budget, though key details remain unresolved and top lawmakers dispute whether a final deal is in place.

SKIP TO: TAXES | CHILD CARE | CHILD CREDIT | ENERGY REBATE

What we know:

The budget agreement comes 37 days after the start of the fiscal year, following weeks of negotiations over taxes, public safety and spending priorities.

'Details still being worked out'

Hochul announced the framework of a deal Thursday, but acknowledged that some of the most significant elements are still being worked out. 

Why you should care:

Shortly after her announcement, Assembly Speaker Carl Heastie pushed back, saying no formal agreement has been reached, though negotiations are ongoing.

Lawmakers are expected to continue negotiations in the coming days, with Hochul expressing confidence that details could be finalized within about a week.

Pied-à-terre tax status 

One of the biggest unresolved issues is Hochul’s proposed tax on high-value second homes in New York City, known as a pied-à-terre tax.

The proposal would apply to properties worth more than $5 million and is intended to help close the city’s multibillion-dollar budget gap. Hochul’s office estimates it could generate about $500 million annually, while city officials project closer to $340 million.

Key details, including the tax rate and how property values will be assessed, have not been finalized.

Is Hochul raising taxes?

Hochul said the budget does not include new income or statewide business taxes, though discussions continue over additional funding for New York City and the details of the second-home tax.

Universal child care

A central part of the plan is a push toward universal, affordable child care.

The budget increases funding by $1.7 billion, bringing the total to $4.5 billion, with the goal of expanding access to care for up to 100,000 additional children. Lawmakers aim to make pre-K available statewide for all 4-year-olds by the 2028-29 school year and expand early childhood programs in New York City.

NY child tax credit

The plan increases the child and dependent care tax credit, providing an average benefit of $576 to about 230,000 families, and caps child care costs at $15 per week for most families.

The state will also support the child care workforce and create an Office of Child Care and Early Education to oversee implementation.

NY energy rebate

The budget includes a $1 billion one-time energy rebate and a broader plan to limit future utility cost increases.

Utility companies would be required to tie executive pay to affordability and present lower-cost options when seeking rate hikes. Certain costs, such as lobbying and executive travel, would not be passed on to customers.

Big picture view:

The budget includes several measures aimed at lowering costs for New Yorkers. It eliminates state income tax on tipped wages up to $25,000 per year and continues free breakfast and lunch for all K-12 students.

It also invests more than $65 million in higher education programs and provides $30 million in relief for farmers facing increased costs tied to federal tariffs.

Super speeders

The plan includes a proposal requiring repeat speeding offenders — those with 16 or more speed camera violations in a year — to install speed-limiting devices in their vehicles.

ICE agents in New York

The budget also outlines immigration-related policies, including proposals to ban local police from cooperating with federal civil immigration enforcement and to prohibit immigration agents from wearing masks during operations.

Those measures have drawn criticism from federal officials. Former acting ICE Director Tom Homan warned of increased enforcement in New York if they are enacted, but Hochul pushed back.

"I don’t take well to threats," Hochul said. "We’re going to pass what we think is important to protect New Yorkers."

Major investments include:

By the numbers:

• Nearly $40 billion in total school aid
• $3.75 billion over five years for clean water infrastructure
• $1 billion for safety net hospitals and $500 million for distressed hospitals
• $1.4 billion for road and bridge repairs
• $250 million to accelerate construction of affordable housing
• $500 million annually from a proposed tax on high-value second homes
• $75 million for major transit projects, including Jamaica Station and the Second Avenue Subway
• $6 million for youth soccer infrastructure tied to the 2026 World Cup