City Planning Celebrates One Year of Successes for City of Yes for Economic Opportunity

 

Nearly 9,000 New Storefront Businesses Have Opened Since Q2 2024, Including Newly-Allowed Spaces for Bakeries, Arts/Makers, and Amusements

Department of City Planning (DCP) Director Dan Garodnick today celebrated New York City’s economic growth in the year since the adoption of City of Yes for Economic Opportunity. Since the initiative was passed on June 6, 2024, modernizing the city’s commercial and manufacturing zoning rules, the city has seen 8,850 new storefront businesses open, including new types of businesses that would not previously have been allowed to open. These include over 500 previously vacant storefronts that, prior to these zoning changes, could have been forced to remain permanently vacant due to the zoning district they are in.  

 

The city economy more broadly has continued to recover. In the last four quarters measured, storefront vacancy has fallen from 11.34% to 11.21%, including nearly 4,000 previously vacant storefronts that have been filled. New York City has also continued its job growth, hitting a record 4.85 million jobs in May 2025 and record highs in labor force participation. 

 

"A year ago the City passed the most comprehensive zoning proposal to help businesses of all sizes and sectors thrive and compete in the 21st Century, and we're already seeing the fruits of that momentous action," said Deputy Mayor for Housing, Economic Development, and Workforce Adolfo Carrión, Jr. "These changes will continue to strengthen New York's economy, filling empty storefronts, providing a variety of quality jobs for New Yorkers, and enriching our mixed-use neighborhoods. I look forward to seeing these trends continue." 

 

“By finally bringing our zoning regulations into the 21st century, we boosted our city’s economy and helped small businesses across the five boroughs succeed. In the year since it passed, we are already seeing a wider variety of businesses closer to their customers, a stronger economy, and more vibrant neighborhoods,” said Dan Garodnick, DCP Director. “By evolving our rules for a modern economy, we have charted a path for a more prosperous future.” 

 

“City of Yes for Economic Opportunity is a landmark piece of legislation, and its common-sense modernization of zoning rules has already triggered significant economic growth,” said NYCEDC President & CEO Andrew Kimball. “As the city hits record levels of employment and labor force participation, the City of Yes will continue to boost our economic development work and enrich our neighborhoods.”   

 

"For the past year, City of Yes for Economic Opportunity has sent a clear message to entrepreneurs: build your businesses in New York City!" said New York City Department of Small Business Services (SBS) Commissioner Dynishal Gross. "By simplifying and rationalizing citywide zoning policy, CoYEO is a sterling example of this administration's commitment to make New York City the best place to open a business. To take advantage of SBS services providing the business education, regulatory guidance and financing assistance to start, operate and grow a business, New Yorkers need only visit NYC.gov/business." 

 

City of Yes for Economic Opportunity also allowed amusements like arcades, laser tag, and mini golf to open in more parts of the city, and more than 50 new such businesses have opened since June 2024. The initiative also lifted the last vestiges of the Cabaret Law by allowing dancing in bars and restaurants, or permitting them to host performances, and at least 14 comedy and dance clubs have opened in that time period. 

 

Businesses in New York have also started to take advantage of new tools created in City of Yes for Economic Opportunity. State-of-the-art life sciences facilities at SPARC Kips Bay and 455 First Avenue took advantage of new flexibility created by the proposal to continue to grow the sector in New York, and Deerfield Management Company utilized the City of Yes loading dock waiver at 345 Park Avenue Southy to support its vertical life sciences campus, Cure., in an adaptively reused commercial building. Additionally, two proposals for more than 500,000 square feet of new industrial space are already advancing through public review using a new tool to allow more flexible building sizes. 

 

DCP is also using new zoning tools to support modern industrial businesses, and is seeking to map new, more flexible manufacturing zoning districts in each of its neighborhood plans that are currently in ULURP: the Midtown South Mixed-Use Plan, the Jamaica Neighborhood Plan, and the OneLIC Neighborhood Plan. Together, these plans could create space for more than 21,000 permanent jobs. 

 

“Allowing a mix of different uses, especially in historic buildings, creates a vibrant and cosmopolitan experience for visitors and residents of the city,” said Kelly Carroll, executive director of the Atlantic Avenue BID. “Thanks to the City of Yes for Economic Opportunity, our district now counts up-close magic shows in a secret theater as one of our district's novel offerings. On this one short block home to 69 Atlantic, a whole evening with varied experiences unfolds seamlessly: attend a gallery opening at Eleventh Hour Art, see a magic show, and end the night at Montero Bar with its storied karaoke merriment.” 

 

“This city is always changing and evolving. And our retail landscape needs to do the same. We look forward to seeing more small businesses and shops open in Lower Manhattan as a result of this more flexible and dynamic zoning,” said Jessica Lappin, President of the Downtown Alliance. 

 

Department of City Planning   

The Department of City Planning (DCP) plans for the future of New York City, working to create thriving and dynamic neighborhoods with access to housing and jobs, resilient infrastructure, and a vibrant public realm. The Department engages communities to develop inclusive plans and studies, expands housing access and economic opportunity, and plans for long-term sustainability.   

 

DCP supports the City Planning Commission in its annual review of approximately 450 land use applications for a variety of discretionary approvals. The Department also assists government agencies and the public by advising on strategic and capital planning and providing policy analysis, technical assistance, and data.   

NYC PUBLIC ADVOCATE'S STATEMENT ON FEDERAL TROOPS POLICING IMMIGRATION PROTESTS

 

"The scenes of state violence and overreach in Los Angeles should alarm every American– but not for the reasons that right-wing media and leaders would have us believe. Donald Trump is again expanding his mass deportation machine, beyond 'gangs' or 'violent criminals' and into our neighborhoods.  
 
"We have a moral obligation to stand up in defense of our immigrant communities. We have a moral obligation to lead with love for our neighbors, to channel our fear and anger into love and action on behalf of the families the Trump administration is targeting. Trump’s deploying of the National Guard and Marines against protesters is a call to action for people of conscience. He wants chaos, and we do not have to give it to him – but we have to stand up.  
 
"I believe in Kingian strategies for advancing justice – primarily, for nonviolent demonstration, and yes, strategic civil disobedience. Nonviolent does not mean sedate – to be passive in this moment is to be complicit. People with power and privilege have an obligation to use it to protect the vulnerable, and Donald Trump’s assault on our immigrant communities has compounded into an assault on dissent.  
 
"We know that this is Donald Trump’s plan for our city as well – he’s already begun his crackdown on dissent, and it can only escalate. What I don’t know is whether Eric Adams will do anything at all to protect New Yorkers from detention and disappearance. The mayor has already shown that he is much more offended by the idea of protest than the harm those protests are trying to prevent. While he found his voice on immigration under President Biden, his absolute alliance to MAGA, his silence, and his capitulation to all things Trump are disgraceful. If he and his top deputies side with their golf buddy, Donald Trump, over the rights and safety of New Yorkers, it will be a dereliction of duty – but also par for the course." 

MAYOR ADAMS HELPS NEGOTIATE AGREEMENT TO ADD NEARLY 50 PERCENT MORE AFFORDABLE HOUSING UNITS TO LARGEST REAL ESTATE DEVELOPMENT IN U.S. HISTORY AT HUDSON YARDS WEST

New Agreement With Related Companies Adds Roughly 50 Percent More Affordable Housing to Hudson Yards West Project, With At Least 625 Units Now Reserved as Permanently Affordable, Another 139 Existing Units Nearby to Be Preserved as Permanently Affordable

Phase 2 of Project Will Deliver Total of Up to 4,000 Units for New Yorkers

New Phase of Plan Would Create 35,000 Temporary Jobs, 6.6 Acres of Public Space, New 750-Seat K-8 School, and Daycare Facility 

Phase 2 of Project Valued at Over $12 Billion, Will Make Entire Hudson Yards Plan Valued at $25 Billion, Largest Real Estate Development in U.S. History

Agreement Continues Adams Administration’s Record Delivering

Generational Housing and Economic Development Projects 

New York City Mayor Eric Adams today announced a tentative agreement with Related Companies he helped broker to increase the amount of affordable housing at Hudson Yards West by nearly 50 percent over the previous proposal. Phase 2 of the project — which is valued at $12 billion — will now include 4,000 new homes at the site, at least 625 of which will be permanently-affordable units. Additionally, as part of today’s agreement, another 139 units nearby will also be preserved as permanently affordable. Under this tentative agreement, the city will use future tax revenues generated from the Western Rail Yards to support the financing of infrastructure, including the development of a deck over the existing rail yards. In addition to building thousands of new units of housing, the project will also include 6.6 acres of public space, a new K-8 school, and a new daycare facility on the site. The project is expected to create 35,000 temporary jobs throughout the development and construction process. The entire Hudson Yards project is now valued at $25 billion, making it the largest real estate development in U.S. history.

After proposals to redevelop the rail yards stalled for nearly two decades, the agreement announced today continues the Adams administration’s track record delivering generational projects for New Yorkers — including the largest 100 percent affordable housing project in 40 years at Willets Point, an $850 million climate research facility on Governors Island, the country’s largest offshore wind port at the South Brooklyn Marine Terminal, and more.

“When we came into office, we set an ambitious goal of building 500,000 new homes over the coming decade. We said our city could not afford to kick the can down the road any longer and promised to put forward real solutions to solve our generational housing crisis and keep families in the five boroughs. Three years later, we shattered affordable housing records year after year, passed generational zoning changes to create tens of thousands of new homes, and won a long-overdue housing deal from Albany. We’ve done exactly what we promised, and we are continuing that track record of leadership today thanks to this new agreement with Related to add nearly 50 percent more affordable housing to this project,” said Mayor Adams. “With the historic agreement, we will finally bring this decades-long project to life and build thousands of new homes for New Yorkers in the heart of Manhattan. Crucially, we fought to make even more of these units affordable so that working-class New Yorkers can live in the city they help run every day.”

“Today marks a game-changing agreement to move forward with the long-stalled Western Rail Yards project, with the opportunity to deliver thousands of homes, good jobs, a new school, and public space,” said Deputy Mayor for Housing, Economic Development, and Workforce Adolfo Carrión, Jr. “As we’ve done time-and-again on complicated projects, the Adams administration is unlocking underutilized land, building new homes, and creating whole new neighborhoods.”

The agreement reached today with Related adds significantly more permanently affordable housing to the proposed project than previous iterations, increasing the number of units from 420 to at least 625, and builds on the Adams administration’s record as the most pro-housing administration in New York City history. As part of the agreement, Related is expected to take on the construction of the new 750-seat school. Additionally, the city will utilize future tax revenues from the project to support the construction of a new deck over the rail yards, a proven tool to finance infrastructure improvements without requiring direct public subsidies. Following today’s announcement of a framework for the project, the proposal will move forward for approvals by the New York City Council, the New York City Industrial Development Agency, and Hudson Yards Infrastructure Corporation.

Since entering office, Mayor Adams has made historic investments to create more affordable housing and ensure more New Yorkers have a place to call home. The Adams administration is advancing several robust neighborhood plans that, if adopted, would deliver more than 50,000 units over the next 15 years to New York neighborhoods. In addition to the Bronx-Metro North Station Area Plan and the Atlantic Avenue Mixed-Use Plan, both of which have been passed by the New York City Council, the Adams administration is advancing plans in Midtown South in Manhattan, as well as Jamaica and Long Island City in Queens.

Moreover, last December, Mayor Adams celebrated the passage of “City of Yes for Housing Opportunity,” the most pro-housing proposal in city history that will build 80,000 new homes over 15 years and invest $5 billion towards critical infrastructure updates and housing. Last June, City Hall and the City Council agreed to an on-time, balanced, and fiscally-responsible $112.4 billion Fiscal Year (FY) 2025 Adopted Budget that invested $2 billion in capital funds across FY25 and FY26 to the New York City Department of Housing Preservation and Development and the New York City Housing Authority’s capital budgets. In total, the Adams administration has committed $24.7 billion in housing capital in the current 10-year plan as the city faces a generational housing crisis. Mayor Adams celebrated back-to-back record breaking fiscal years, as well as back-to-back calendar years, in both creating and connecting New Yorkers to affordable housing. Last spring, the city celebrated the largest 100 percent affordable housing project in 40 years with the Willets Point transformation. 

Further, the Adams administration is using every tool available to address the city’s housing crisis. Mayor Adams announced multiple new tools, including a $4 million state grant, to help New York City homeowners create accessory dwelling units that will not only help older adults afford to remain in the communities they call home but also help build generational wealth. In addition to creating more housing opportunities, the Adams administration is actively working to strengthen tenant protections and support homeowners. The Partners in Preservation program was expanded citywide in 2024 through an $24 million investment in local organizations to support tenant organizing and combat harassment in rent-regulated housing. The Homeowner Help Desk, a trusted one-stop shop for low-income homeowners to receive financial and legal counseling from local organizations, was also expanded citywide in 2024 with a $13 million funding commitment.

Finally, Mayor Adams and members of his administration successfully advocated for new tools in the 2024 New York state budget that will spur the creation of urgently needed housing. These tools include a new tax incentive for multifamily rental construction, a tax incentive program to encourage office conversions to create more affordable units, lifting the arbitrary “floor-to-area ratio” cap that held back affordable housing production in certain high-demand areas of the city, and the ability to create a pilot program to legalize and make safe basement apartments.

ICE Continues to Arrest Vicious Illegal Alien Criminals as Rioters Continue to Disrupt Law Enforcement

 

California sanctuary politicians and rioters are defending heinous illegal alien criminals including child pedophiles and other violent criminal illegal aliens at the expense of Americans' safety

Yesterdayday, the Department of Homeland Security (DHS) released more information about some of the worst of the worst criminal illegal aliens arrested during the ongoing Immigration and Customs Enforcement (ICE) operation in Los Angeles. These arrests occurred on June 8 despite violent riots and assaults on ICE law enforcement. 

“These heinous criminals, including child abusers and pedophiles, are some of the illegal aliens arrested yesterday in Los Angeles. Why do Governor Newsom and Los Angeles Mayor Karen Bass care more about violent criminal illegal aliens than they do about protecting their own citizens?” said Assistant Secretary Tricia McLaughlin. “These rioters in Los Angeles are fighting to keep rapists, murderers, and other violent criminals loose on Los Angeles streets. Instead of rioting, they should be thanking ICE officers who every single day wake up and make our communities safer.”

Below is a list of some of the violent criminal illegal aliens arrested in ICE’s Los Angeles Operation on Sunday:

Eswin Uriel Castro

ICE arrested Eswin Uriel Castro, a previously deported illegal alien. Castro has criminal convictions for child molestation and being armed with a dangerous weapon. He has also been arrested for robbery and domestic violence. 

Anastacio Enrique Solis-Salinas

ICE arrested Anastacio Enrique Solis-Salinas, a convicted criminal from Nicaragua. His criminal history includes convictions for domestic violence and hit and run. Additionally, he’s been arrested for willful cruelty to a child.

Rafael Gamez-Sanchez

ICE arrested Rafael Gamez-Sanchez, an illegal alien, with a criminal conviction for vehicular manslaughter. 

Miguel Angel Palafox-Montes

ICE arrested Miguel Angel Palafox-Montes, an illegal alien, with criminal convictions for grand theft, narcotics violations, and identity theft. He has also been arrested for battery and burglary. Palafox-Montes has previously been voluntarily returned to Mexico twice. 

Dzhakhar Aslambekov

ICE arrested Dzhakhar Aslambekov, an illegal alien from Russia. Aslambekov was recently detained for fraud related to Electronic Benefit Transfer (EBT) cards used to access government assistance programs.

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Chinese National Pleads Guilty to Acting at the Direction of North Korea to Export Firearms, Ammo, and Technology to North Korea

 

An illegal alien from China pleaded guilty today to federal criminal charges for illegally exporting firearms, ammunition and other military items to North Korea by concealing them inside shipping containers that departed from the Port of Long Beach, California, and for committing this crime at the direction of North Korean government officials, who wired him approximately $2 million for his efforts.

Shenghua Wen, 42, of Ontario, California, pleaded guilty to one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and one count of acting as an illegal agent of a foreign government. Wen has been in federal custody since his arrest in December 2024.

According to his plea agreement, Wen is a citizen of the People’s Republic of China who entered the United States in 2012 on a student visa and remained in the U.S. illegally after his student visa expired in December 2013.

Prior to entering the United States, Wen met with officials from North Korea’s government at a North Korean embassy in China. These government officials directed Wen to procure goods on behalf of North Korea.

In 2022, two North Korean government officials contacted Wen through an online messaging platform and instructed him to buy and smuggle firearms and other goods – including sensitive technology – from the United States to North Korea via China.

In 2023, at the direction of North Korean government officials, Wen shipped at least three containers of firearms out of the Port of Long Beach to China en route to their ultimate destination in North Korea. Wen took steps to conceal that he was illegally shipping firearms to North Korea by, among other things, filing false export information regarding the contents of the containers.

In May 2023, Wen purchased a firearms business in Houston, paid for with money sent through intermediaries by one of Wen’s North Korean contacts. Wen purchased many of the firearms he sent to North Korea in Texas and drove the firearms from Texas to California, where he arranged for them to be shipped.

In December 2023, one of Wen’s weapons shipments – which falsely reported to U.S. officials that it contained a refrigerator – left the Port of Long Beach and arrived in Hong Kong in January 2024. This weapons shipment was later transported from Hong Kong to Nampo, North Korea.

In September 2024, Wen – once again acting at the direction of North Korean officials – bought approximately 60,000 rounds of 9mm ammunition that he intended to ship to North Korea.

In furtherance of the conspiracy and at the direction of North Korean officials, Wen also obtained sensitive technology that he intended to send to North Korea. This technology included a chemical threat identification device and a handheld broadband receiver that detects known, unknown, illegal, disruptive or interfering transmissions.

Wen also acquired or offered to acquire a civilian airplane engine and a thermal imaging system that could be mounted on a drone, helicopter, or other aircraft, and could be used for reconnaissance and target identification.

During the scheme, North Korean officials wired approximately $2 million to Wen to procure firearms and other goods for their government.

Wen admitted that at all relevant times he knew that it was illegal to ship firearms, ammunition, and sensitive technology to North Korea. He also admitted to never having the required licenses to export ammunition, firearms, and the above-described devices to North Korea. He further admitted to acting at the direction of North Korean government officials and that he had not provided notification to the Attorney General of the United States that he was acting in the United States at the direction and control of North Korea as required by law.

Wen faces a maximum penalty of 20 years in prison on the count of violating the IEEPA and a maximum penalty of 10 years in prison on the count of acting as an illegal agent of a foreign government. Sentencing is scheduled for Aug. 18. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General for National Security John Eisenberg, U.S. Attorney Bilal A. Essayli for the Central District of California, Assistant Director Roman Rozhavsky of the FBI Counterintelligence Division, and Kelly P. Mayo, Deputy Inspector General for Investigations and Director of the Defense Criminal Investigative Service (DCIS) made the announcement.

The FBI, Homeland Security Investigations, DCIS, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Department of Commerce Bureau of Industry and Security (BIS) are investigating the case. 

Governor Hochul Announces Work Underway on a $36.9 Million Bridge Rehabilitation Along Fort Hamilton Parkway in Brooklyn

New Bridge Deck and Structural Improvements Will Enhance Safety and Resiliency on Key Bridge Spanning the Gowanus Expressway

Protected Bike Lane to Improve Access for Cyclists

Governor Kathy Hochul today announced that work is underway on a $36.9 million project to rehabilitate the bridge carrying the Fort Hamilton Parkway over the Gowanus Expressway (Interstate 278) in Brooklyn. The project will replace the bridge deck and make other structural improvements to enhance safety and resiliency along this vital connector that links the neighborhoods of Bay Ridge, Dyker Heights, and Windsor Terrace. A new, protected lane for bicyclists will also be added to the bridge and will connect to existing bike lanes on Fort Hamilton Parkway and 7th Avenue.

“New York State continues to make historic investments that will create safer, more resilient roads and bridges that will help keep our communities connected and our economy growing,” Governor Hochul said. “The rehabilitation of this important bridge along the Fort Hamilton Parkway will help preserve a vital link in Brooklyn’s transportation network while also making it easier for people to get out of their cars and travel by bike across the borough.”

The Fort Hamilton Parkway is a one-way, northbound arterial that stretches from 101 Street in Bay Ridge and continues to Machate Circle just southwest of Prospect Park, in Windsor Terrace. In addition to replacing the bridge deck and approach slabs, the project will also replace and upgrade the steel superstructure, bridge bearings, piers and abutments. Travel lanes will be reconfigured to accommodate the new, protected bicycle lane while also maintaining the existing parking lane and sidewalks. Curb ramps will also be upgraded to comply with the Americans with Disabilities Act, and street and underdeck lighting will be upgraded.

The project is expected to extend the service life of the bridge, which was built in 1964, by at least 40 years. To accommodate construction, motorists should expect the long-term closure of the left lane during the first phase of construction. During the second phase of construction, the right lane will be closed as traffic will shift to the new left lane on the bridge. During construction, the parking lane will also be closed and drivers should expect lane shifts on the Gowanus Expressway. The project is expected to be completed by Summer 2027. 

Attorney General James Takes Action to Support Harvard University in Challenge Against Illegal Funding Freeze

Multistate Coalition Warns that Retaliatory Federal Funding Freeze Threatens Jobs, Innovation, and Public Health 

New York Attorney General Letitia James today joined a coalition of 20 other attorneys general in supporting Harvard University’s legal challenge to the federal government’s unlawful cancellation of more than $2 billion in federal funding to the university. In an amicus brief filed in the U.S. District Court for the District of Massachusetts, Attorney General James and the coalition argue that, in addition to endangering Harvard’s research work, the unprecedented funding freeze threatens the economic health, scientific leadership, and innovation of states like New York that rely on strong research institutions.

“In New York and nationwide, our research universities are fundamental to innovation, economic strength, and public health advances,” said Attorney General James. “We all benefit when our research institutions are strong, and the federal government’s decision to abruptly pull funding from Harvard should worry us all. This move threatens thousands of jobs, halts critical research on diseases like ALS and breast cancer, and undercuts the local economies and communities that these universities support. We are standing with Harvard to oppose this attack on science and innovation.”

On April 11, the federal government sent Harvard a letter outlining a series of demands that the university must satisfy in order to receive federal research funding that had already been committed to the school. Attorney General James and the coalition note that in response to those demands, Harvard rightly refused to relinquish its academic independence, and the federal government subsequently announced that it was freezing over $2 billion in federal funding to the university. Harvard has since filed a lawsuit against the administration, and the university is requesting that a judge move quickly to declare the administration’s actions unlawful.

Attorney General James and the coalition are supporting this request for expedited judgment. In their brief, the attorneys general argue that the administration’s punitive and unlawful funding freeze, which poses an unprecedented threat to Harvard, would have devastating spillover effects on other states’ economies if their research institutions were targeted in the same way. The attorneys general detail the enormous role that research universities like Harvard play in the economy, education, and health of their home states. The attorneys general emphasize that federal research funding is essential for medical breakthroughs, the development of new technologies, and the training of future scientists and healthcare professionals.

In New York alone, independent research institutions support tens of thousands of jobs, generate millions in economic activity, and collaborate with state and local partners to improve public health, education, housing, and more. The attorneys general warn that a freeze in research funding will have cascading effects: halting projects midstream, forcing layoffs, shuttering community programs, and driving scientific talent abroad.

Attorney General James and the coalition are urging the court to grant Harvard’s motion for summary judgment and immediately end the unlawful funding freeze.

Joining Attorney General James in submitting this brief, which was led by Massachusetts Attorney General Andrea Joy Campbell, are the attorneys general from California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. 

 

NYS Office of the Comptroller - DiNapoli Releases Analysis of Enacted State Budget

 

The Enacted Budget for State Fiscal Year (SFY) 2025-26 is projected to total $254 billion, a 5.2% increase in spending at a time when new federal actions on funding and policy may change the relationship between the federal government and states. Actions that have already occurred at the federal level, paired with potential Congressional action, may mean that in the upcoming months New York will see challenges to the recently Enacted State Budget, according to a report by State Comptroller Thomas P. DiNapoli.

“The stakes are high for New York if the cuts being discussed in Washington occur,” DiNapoli said. “The state needs to do what it can to stabilize finances, build reserve funds, focus on efficient service delivery and develop a strategy for how to contend with federal changes. The final budget had some measures built into help navigate this uncertainty, but the state needs to do what it can to prepare in a transparent manner before our options are even more limited.”

Major Spending and Policy Actions

While detailed spending projections are not yet available from the Division of the Budget (DOB), preliminary projections indicate spending will increase. All Funds spending in SFY 2025-26 is projected to total $254 billion, an increase of $12.5 billion from $241.5 billion in SFY 2024-25. State Operating Fund spending is expected to grow 9.3%, continuing a recent trend of significant growth. Between SFY 2019-20 and SFY 2024-2025, State Operating Funds spending grew 4.6% annually on average – more than double the preceding 5-year period.

The big two items in state spending – School Aid and Medicaid – are the primary drivers of these increases. The Enacted Budget provides $37.4 billion in School Aid on a School Year (SY) basis, an increase of $209 million (0.6%) over the Executive Budget and $1.7 billion (4.9%) over SY 2025.

The Enacted Budget appropriates $109.6 billion for Medicaid in the Department of Health’s (DOH) budget for SFY 2025-26, which is an increase of $7.7 billion (7.6%) from the prior year and $1.7 billion (1.6%) over the Executive Budget proposal.

Authorization was also included to transfer up to $8 billion from the General Fund to repay the state’s outstanding advance with the federal Unemployment Trust Fund. If New York eliminates the entire advance, the effective federal unemployment insurance tax rate for New York employers will decrease from 1.5% for 2024 to an effective federal tax rate of 0.6% for 2025. This should provide relief to small businesses across the state and will allow the state to increase benefits for workers which have remained stagnant since 2019.

Lower Revenue Projected

Based on available information, All Funds revenues for SFY 2025-26 are projected to total $248.9 billion, nearly the same as in SFY 2024-25. All Funds tax collections for the current fiscal year are projected to decrease by $474 million (less than 1%) to $117 billion.

Economic uncertainty may affect revenue collections. A projected acceleration in inflation, triggered in part by the impact of tariffs on prices, may affect state sales tax collections. In addition, a continued decline in tourism above what is currently being seen would also negatively impact New York’s revenues, not only through lower sales taxes received from hotel stays, restaurant meals, and souvenir purchases but also from income taxes paid from workers in the leisure and hospitality industry. Since the beginning of the year, there are 11,200 fewer jobs in the industry.

Initial Changes to Federal Revenues

Federal funding is a significant part of the state budget: In SFY 2024-25, federal receipts totaled $96.7 billion or 38.8% of the state’s budget. A range of state services and programs rely on federal funding, although the greatest share – an estimated 87% in SFY 2025-26 – supports health and human services programs. DiNapoli launched an online resource that provides greater detail on federal funding in the budget and for the public safety net in New York state.

On April 29, prior to the adoption of the budget, the Executive reported that $1.3 billion in federal cuts had already been made to state programs—not including separate actions affecting New York’s local governments, universities, and nonprofits. Reductions included $325 million in resiliency funding, $79 million in SUNY research grants, and $24 million for assistance to food banks and farmers. Other actions include elimination of federal staff for the Low Income Home Energy Assistance Program; termination of more than 1,200 federal workers who live in New York; and attempted termination of federal approval of congestion pricing in New York City’s business district which continues to be litigated.

Navigating the Uncertainty

The state has not taken any significant cost containment measures or implemented a strategy for addressing federal cuts, so how these risks will be reflected in DOB’s Enacted Budget Financial Plan for the next four years remains to be seen. Executive and Legislative leaders have acknowledged the actions in Washington may require them to convene a special session. The Enacted Budget does contain language that authorizes the Director of DOB to withhold appropriated funding if any quarterly financial plan update shows an imbalance of $2 billion or more. The state also has nearly $8.8 billion in its statutory rainy day reserve funds, an important safeguard against economic disruptions and tax revenue shortfalls.

According to the Executive, the impact of the House megabill on New York would be far-reaching. An analysis from DOH indicates that the proposed federal changes could result in estimated lost federal funding of $10.1 billion and new state-funded Medicaid costs of $3.3 billion. The Executive estimates the proposal would increase the number of people without health insurance in the state. New York has one of the lowest uninsured rates in the nation (4.8% in 2023, according to the U.S. Census Bureau); if these projections are accurate, the number of uninsured would grow by more than 150%, rising from approximately 938,000 to 2.4 million. Other changes would increase state costs and reduce eligibility for the Supplemental Nutritional Assistance Program, and eliminate funding for the clean energy transition and climate and resiliency programs.

DiNapoli stressed the importance of focusing budget management on the current year and on the potential for drastic changes in the outyears. He recommended continuing to build reserves, both statutory rainy day funds and informal reserves; focusing on efficiency in service delivery, particularly by implementing prior audit recommendations; and developing a strategy for articulating criteria for how the State will respond to federal cuts.

Report

Enacted Budget Report: State Fiscal Year 2025-26