Assembly passes one-house budget resolution, advancing 8-calendar; debate centers on taxes, reserves and program funding

The New York State Assembly on March 13 adopted its one‑house budget resolution in response to Governor Kathy Hochul’s 2025–26 executive proposal, approving the plan by a recorded vote of 100 in favor and 47 opposed after extended floor debate.

The resolution sets an all‑funds spending plan of $256.5 billion for state fiscal year 2025–26, the sponsor said, and increases several state funding lines above the executive recommendation while proposing a $7 billion payment to the state unemployment insurance (UI) trust fund. The Assembly majority framed the package as tax relief targeted at working and middle‑class households alongside investments in schools, health care, housing and clean energy.

Why it matters: the one‑house resolution is the Assembly majority’s negotiating position in the budget process; its changes to taxes, program funding and use of reserves shape the coming three‑way talks between the Assembly, the Senate and the governor. Lawmakers on both sides said they expect further changes during negotiations but warned the fiscal path beyond 2026 contains significant gaps.

Major provisions and figures

- Topline and comparisons: The Assembly presented an all‑funds budget of $256.5 billion, which the sponsor said is about $4.5 billion above the executive proposal and roughly 5.4% above fiscal 2024–25 in all funds. State‑fund totals cited in debate included $165.3 billion in state funds and $147.9 billion in state operating funds; the general fund was listed at $127.4 billion. The sponsor said the package increases school aid, health care and local assistance across multiple lines.

- Unemployment insurance: The resolution includes a $7 billion payment to the state UI trust fund to retire the outstanding UI debt. Majority members said that measure is intended to relieve businesses of rising UI costs. Several members on both sides questioned whether moving reserve funds into the UI trust fund is prudent given federal and economic uncertainties.

- Taxes and rebates: The Assembly majority endorses the governor’s one‑time inflation rebate program and proposes a package of tax changes it says will expand relief for working and middle‑income families, including consolidating and enhancing child‑related credits into a proposed New York Works tax credit and a new LIFT credit for lower‑income filers. The plan also proposes revenue actions affecting high‑income filers and large corporations (described on the floor as increases targeted to top earners and to corporations with very large tax bases) to fund the Assembly’s priorities.

- Education and children’s services: The one‑house text increases funding for K–12 foundation aid and early childhood programs, expands eligibility for student financial‑aid programs, and proposes increased support for community‑based summer learning and college access programs. The package also funds additional aid for special‑education and 4201 schools though members noted appropriation and percentage differences between program lines.

- Housing, health and environment: The Assembly included substantial increases for affordable housing capital (including NYCHA and Mitchell‑Lama investments), new vouchers, and rental supplements; investments in hospital and nursing‑home capital; and expanded clean‑water and environmental protection funding. The sponsor also preserved and expanded several clean‑energy and sustainability programs.

Points of debate and dissent

Lawmakers of both parties used the floor debate to press the majority on specific tradeoffs and risks in the one‑house plan.

- Out‑year gaps and reserves: Multiple members, particularly in the Republican Conference, said the package increases structural out‑year gaps (figures cited on the floor placed multi‑year gaps in the tens of billions) and criticized the use of non‑statutory reserves to pay one‑time costs. Dissenters argued drawing down reserves now leaves the state exposed to potential federal funding changes and future downturns.

- MCO tax and Medicaid financing: Several members raised questions about the Assembly’s reliance on the managed care organization (MCO) tax and federal matching dollars. Critics asked what contingency plan exists if federal approval for the tax changes is denied; the sponsor responded that the plan assumes federal approval and that contingency mechanisms would be addressed in later negotiations.

- Transportation and local infrastructure: Upstate members criticized flat CHIPS (Consolidated Local Street and Highway Improvement Program) funding and argued local roads and bridges face acute inflationary construction cost pressures. The Assembly package adds or preserves other targeted road programs (including PAVE and Touring Routes funding), but some members said the composition does not adequately address local maintenance needs.

- Health‑care implementation issues: Members raised implementation concerns about consumer‑directed personal assistance program (CDPAP) changes with an April 1 transition date and about how proposed health‑care capital would be distributed. The sponsor noted policy items for health‑care reform are better handled in committee legislation rather than in a one‑house resolution, but did confirm targeted capital allocations are included.

- Criminal justice and other policy items: Several members noted the one‑house resolution omits or declines to adopt certain policy proposals included in the governor’s executive budget (for example, some public‑safety and regulatory items). The majority said it tried to strip most policy from the one‑house fiscal resolution so substantive policy changes can be considered in stand‑alone legislation and committee hearings.

Votes at a glance

- Assembly one‑house budget resolution (Assembly No. 183, “Budget in response to the 2025–26 executive budget submission”): Passed, Ayes 100, Nos 47. The Assembly recorded two floor explanations of vote during the tally; additional members spoke for and against during debate.

- Assembly Resolution declaring March 13, 2025, Canine Veterans Day (Assembly No. 196): Adopted by voice vote earlier in the session.

- Assembly Resolution declaring March 15, 2025, Essential Workers Day (Assembly No. 197): Adopted by voice vote earlier in the session.

What happens next

The one‑house resolution sets the Assembly majority’s negotiating position as the chamber enters three‑way negotiations with the governor and the Senate. Lawmakers on the floor repeatedly said the document is a starting point; several members emphasized that specific program details, implementation language, and contingency plans for federal funding uncertainty remain to be negotiated.

The Assembly advanced an 8‑calendar for consideration and will reconvene to continue negotiations on the final enacted budget and accompanying legislation.

Ending note

Members on both sides said the next two weeks of negotiations will determine which tax and spending changes survive into the final enacted budget. Lawmakers emphasized they expect further revisions on tax policy, UI financing, Medicaid funding mechanisms and various programmatic allocations.