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What Was in Gov. Hochul’s 2025 Budget Address?

Stay informed on how the Governor’s budget address could impact the construction industry and your business. This page highlights key proposals, funding initiatives, and policy changes that were included in the budget, with a focus on issues that matter most to our members. Whether it’s infrastructure investments, workforce development, or regulatory updates, find the details you need to stay ahead.

Background: $252 Billion Budget

On January 21, 2025, Governor Kathy Hochul gave her budget speech for the 2026 fiscal year at the State Capitol in Albany. She shared plans for how New York will spend $252 billion—a $8.6 billion increase from last year. Thanks to higher taxes and other state revenue, the state has a $3.5 billion surplus this year and $21 billion saved up for emergencies.

The Governor’s plan includes goals like cutting income taxes, making life more affordable, providing more childcare and free school meals, improving subway safety, building more housing, switching to clean energy, and banning cell phones in schools. She also mentioned ideas from her earlier speech on January 14.

This budget also works on reducing future budget gaps, aiming to save more money for years to come.

Whats In the Governor's Budget Proposal?

Transportation

Construction Permit Reform 
The Executive Budget proposes to amend the Vehicle and Traffic Law to authorize a new surcharge in New York City on the issuance of permits relating to the obstruction or closure of streets, sidewalks, or pedestrian plazas for the purpose of construction. This proposal would take effect immediately, except for the amendment to the Administrative Code of New York City, which would take effect on January 1, 2028.

Make Permanent and Expand the Workzone Speed Camera Program
The Executive Budget proposes make permanent the NYS Thruway Authority and NYS Department of Transportation (DOT) programs for speed violation photo monitoring systems in work zones (Automated Work Zone Speed Enforcement – AWZSE), increase penalties, modify the adjudication process, expand the authorization for speed violation photo monitoring to the Triborough Bridge and Tunnel Authority and NYS Bridge Authority, and establish a Work Zone Speed Camera Administration Fund. This proposal would take effect 30 days after enactment

Overweight Vehicle Enforcement Using Weigh-In-Motion Technology 
The Executive Budget proposes to amend the Vehicle and Traffic Law to authorize the use of WIM technology by the New York State Department of Transportation, Triborough Bridge and Tunnel Authority, New York State Bridge Authority, Port Authority of New York and New Jersey, New York City Department of Transportation, and New York State Thruway Authority, on agency or authority facilities including roadways, bridges, and highways. This proposal would take effect immediately

Metropolitan Transportation Authority (MTA) 2025-29 Capital Plan
The Executive Budget assumes $32.7 billion of base funding that would be directly contributed by funding partners. These assumed contributions consist of $3 billion from the State, $3 billion from the City of New York, $12.3 billion from the MTA ($3 billion of which would be selffunded by Bridges and Tunnels) and $14.4 billion requested from the Federal government. This funding proposal acknowledges the need for partner commitments to support the MTA’s 2025-29 Capital Plan, while allowing additional time to work closely with the Legislature to advance additional funding as part of the budget negotiation process.

Economic Development

Authorize DASNY to Provide Planning, Design, Procurement, and Construction Management Services to Local Governments, and Grant Administration Services to DEC
The Executive Budget proposes to authorize DASNY to provide planning, design, procurement, and construction management services to counties, cities, towns and villages, as well as grant administration services to the Department of Environmental Conservation. The bill would amend the definition of the term’s “dormitory,” and “educational institution” contained in Public Authorities Law (“PAL”) §§ 1676(2)(b) and 1680(1), respectively, to include any county, city, town and village regarding planning, design, procurement, and construction management services. The bill also amends Public Authorities Law §1678 (26) to include grant administration in the list of services DASNY is authorized to provide to DEC.

Regional Economic Development Councils
The Executive Budget includes core REDC funding through $150 million in new capital grants and $75 million in new Excelsior tax credits through ESDC to fund high value regional priority projects, which is anticipated to be made available throughout the year to ensure that projects that are shovel-ready can be advanced in a timely fashion.

Downtown Revitalization 
The Executive Budget provides $100 million for another round of the Downtown Revitalization Initiative (DRI), which has been transforming downtown neighborhoods into vibrant communities where the next generation of New Yorkers will want to live, work, and raise families. Participating communities are nominated by the State’s 10 REDCs based on the downtown’s potential for transformation. Each winning community is awarded funding to develop a downtown strategic investment plan and implement key projects that advance the community’s vision for revitalization.

New York Forward 
The Executive Budget includes another round of $100 million in funding for rural and smaller communities. Like the DRI program, NY Forward communities are selected in partnership with the REDCs, and the Department of State (DOS) will lead the community through an abbreviated planning process to develop a slate of readily implementable projects. The State’s investment in projects that demonstrate their ability to accelerate revitalization will strengthen the competitiveness and improve the future trajectory of New York State’s small communities and larger urban centers.

FAST NY Shovel-Ready Grant Program 
The Executive Budget proposes $100 million for another round of grants to prepare and develop sites statewide to increase its attractiveness to large employers, including high-tech manufacturing, particularly semiconductor manufacturing, interstate distribution, and logistics.

Redevelopment of Underutilized Sites for Housing 
The Executive Budget proposes $250 million in capital funding for the Redevelopment of Underutilized Sites for Housing Initiative (NY RUSH). In its second year of implementation, the NY RUSH program will continue to assist State agencies in the repurposing of existing State sites and properties for use as housing.

State and City Funding for the Metropolitan Transportation Authority 2025-2029 Capital Plan
The Executive Budget proposes to commit the State of New York and City of New York to each contribute $3 billion to pay capital costs related to projects in the Metropolitan Transportation Authority’s (MTA) 2025-2029 Capital Program. This bill would commit $6 billion in total funding from the State and City for the MTA’s 2025-2029 Capital Program, to be provided concurrently in accordance with the funding needs of the capital program.

Housing

Comprehensive Statewide Multi-Year Housing Program
The Executive Budget proposes $427 million to continue the State’s $25 billion, 5-year housing plan to create and preserve 100,000 affordable homes. These funds, combined with funds appropriated in 2022-23, would support the following:

  • Up to $1.5 billion for capital and operating subsidies for the development or preservation of supportive housing units.
  • Up to $1 billion to provide capital subsidies for the new construction or adaptive reuse of rental housing.
  • Up to $300 million to develop or rehabilitate senior rental affordable housing targeted to low-income seniors aged 60 and above.
  • Up to $80 million to support the rural and urban community investment fund.
  • Up to $90 million for capital subsidies for the new construction, adaptive reuse, or reconstruction of rental housing affordable to households earning between 60% and 130% of AMI and advancing one or more of the State's specific housing priorities.
  • Up to $450 million to support substantial or moderate rehabilitation of site-specific multi-family rental housing.
  • Up to $120 million to support capital subsidies to preserve and improve Mitchell-Lama properties.
  • Up to $150 million for substantial or moderate rehabilitation and/or the demolition and replacement through new construction of site-specific multi-family rental housing owned by federally or state-supervised public housing authorities outside NYC.
  • Up to $60 million for substantial or moderate rehabilitation and new construction of buildings with 5-50 units.
  • Up to $400 million to promote homeownership among low- and moderate-income families or in areas with few affordable homeownership alternatives in the private market.
  • Up to $20 million for the mobile and manufactured home replacement program.
  • Up to $85 million to create and upgrade accessory dwelling units.
  • Up to $250 million for capital projects, including all-electric, high-performance equipment for heating, high-performance building envelope design, and alternative energy sources.

City of Yes for Housing Opportunity
The Executive Budget proposes $1.025 billion to support New York City’s “City of Yeas for Housing Opportunity” program. The
program would make available $1 billion to support services and expenses to stimulate the development, stabilization, and preservation of affordable housing in NYC. The additional $25 million would support services and expenses of capital projects and other improvement as housing developments owned or operated by the New York City Housing Authority.

Lead Abatement Program
The Executive Budget proposes $20 million to support theservices and expenses of a lead abatement programs. Funds would be available to support expenses outside NYC.

Community Controlled Affordable Housing Program
The Executive Budget proposes $1 million for services and expenses of a community controlled affordable housing program.

 

Labor, Workforce & Public Protection

Enhanced Transportation Worker Protections
The Executive Budget proposes to expand the categories of transportation workers that qualify for enhanced assault protections in New York State, to include motor vehicle license examiners, motor vehicle representatives, highway workers, motor carrier investigators, and motor vehicle inspectors.

Reduced Penalties for Failing to Comply with Frequency of Payments
The Executive Budget proposes to amend the penalties imposed under Article 6, Labor Law Section 198 for employers that fail to timely pay wages as required by Labor Law Section 191 (frequency of payments for workers). Presently, a failure to pay wages pursuant to the requirements of Section 191 results in an employee being entitled to 100% liquidated damages for the untimely portion of the wages paid.

Expanded Enforcement Powers to Collect Lost Wages
The Executive Budget proposes to amend Labor Law Sections 218(3) and 219 (3) to provide the Commissioner of DOL additional powers to enforce final non-appealable orders/decisions that impose penalties and wage payments upon employers for violations of Articles 6 (Payment of Wages), 19 (Minimum Wage) or 19-a (Minimum Wage for Farm Workers) of the Labor Law. While this amendment is contained within Article 7 of the Labor Law, which applies to all employers, Articles 6, 19 or 19-a of the Labor Law do not apply to public sector employers. Thus, this proposed amendment would not impact public employers.

Environment, Energy & Telecommunications

Climate Mitigation and Adaptation Projects *PLAs are expected on ALL this work
The Executive Budget proposes a $1 billion appropriation to support capital spending associated with the recently approved Climate Action Fund, pursuant to the state’s Climate Leadership and Community Protection Act (Climate Act). Eligible projects would include those intended to reduce greenhouse gas emissions and pollution, decarbonize and retrofit buildings, utilize
renewable energy, advance clean transportation initiatives, implement thermal energy networks, and use green infrastructure.

Clean Water Infrastructure
The Executive Budget proposes an additional $500 million in clean water infrastructure funding over two years, for drinking water and wastewater infrastructure, and water quality protection.

New York Works
$90 million would be appropriated for the New York Works statewide capital infrastructure program. New York Works funding is used to improve access to State lands, rehabilitate campgrounds, a repair and rehabilitate dams, and upgrade DEC recreational facilities. Funding is also used for air monitoring infrastructure, remediating environmental contamination information technology, and repairs and maintenance of state infrastructure, state lands, and fish hatcheries.

Hazardous Waste Superfund Reauthorization
The Executive Budget includes legislation to reauthorize the Inactive Hazardous Waste Disposal Program (NYS Superfund) until March 31, 2036, and include changes to accelerate site remediation and enable site redevelopment. The bill would also increase the amount of bonds that may be issued to finance the program, from $2.2 billion to $3.45 billion.

Promote Opportunity With Electric Readiness for Underdeveloped Properties (“POWER UP”) Program 
The Executive Budget appropriates $100,000,000 for services and expenses, loans and grants related to the POWER UP Program. Funds appropriated include, but are not limited to, the acquisition of real property, preparation of plans, design, construction, renovation, administration, and other costs incidental thereto.

Sustainable Future Program
The Executive Budget appropriates $1 billion for the Sustainable Future Program. For services and expenses of climate mitigation and adaptation projects including but not limited to: reducing greenhouse gas emissions and pollution; decarbonizing and retrofitting buildings; creating and utilizing renewable energy; advancing clean transportation initiatives; building, repairing, and maintaining thermal energy networks; for the design, construction, repair, or improvement of green infrastructure; and for purposes consistent with the general findings of the scoping plan prepared pursuant to section 75-0103 (“CLCPA”) of the environmental conservation law, subject to a plan approved by the director of the budget. Qualifying projects funded by this appropriation shall be subject to the same standards and provisions stated in section 224-f of the labor law and section 66-v of the public service law and treated in the same manner as if funded from section 99-qq of the state finance law (Cap-and-Invest Climate Action Fund).

Incentivize Compliance with the “Call Before You Dig” Program 
The Executive Budget proposes to amend General Business Law to increase civil penalties for failure to comply with what is colloquially known as the “Call Before You Dig” program. Civil penalties for a first violation would be increased from $2,500 to $5,000 and potential penalties for each succeeding violation that occurs within a 12-month period would be increased from $10,000 to $20,000. The proposal would also amend the law to direct these penalties to the Environmental Protection Fund (“EPF”), beginning October 1, 2025.

Extend and Expand Broadband and Cell Service
Despite the State of the State book mentioning the launch of the Excelsior Broadband Network and the Mobile Service Connectivity Initiative, no Article VII nor appropriation language alluded to any such programs.

Technology, Banking & Business

Extend the Authorization of the MWBE Business Program
The Executive Budget proposes to extend New York State’s Minority and Women-owned Business Enterprises (MWBE) program for two years (July 1, 2027). According to the Governor, the Division of Minority and Women’s Business Development (DMWBD) oversees the statewide MWBE program in New York State and is charged with three primary functions:
• to encourage and assist state agencies that are engaged in contracting activities to award
a fair share of state contracts to MWBEs
• to review applications by businesses seeking certification as a MWBE and to maintain a
directory of certified MWBEs
• to promote the business development of MWBEs through education and outreach to
agencies and MWBEs

Increase Discretionary Procurement Thresholds for MWBEs and Service-Disabled Veteran Owned Businesses
The Executive Budget proposes to increase the state agency discretionary procurement threshold for MWBEs and SDVOBs from $750,000 to $1.5 million and increases the public authority discretionary procurement threshold in Public Authorities Law for MWBEs from $500,000 to $1.5 million and includes SDVOBs. According to the Governor, increasing the number and value of non-competitive contracts by raising the discretionary procurement threshold will increase access to contracts and help more MWBEs and SDVOBs work directly as prime contractors for state agencies and authorities.

Captive Insurance for Public Benefit Corporations 
The Executive Budget proposes to authorize certain New York State and local authorities to create a pure or group captive insurance company (The Battery Park City Authority, the New York Convention Center Operating Corporation, the New York State Energy Research and Development Authority/NYSERDA, the New York State Olympic Regional Development Authority and the Roosevelt Island Operating Corporation). The legislation also expands the definition of an industrial insured group to include certain state and local authorities and establishing guidelines on formation and administration of any captive insurance companies.

Revenue:

Inflation Refund Credit
The Executive Budget proposes to create a one-time inflation refund tax credit. To qualify, taxpayers would need to be full-year residents in 2023 and be below certain income thresholds. Specifically, taxpayers who filed 2023 resident tax returns as “married filing jointly” or “qualifying surviving spouse,” and whose income was $300,000 or less, would receive a $500 tax credit in 2025. Taxpayers who filed 2023 resident tax returns as “single,” “married filing separately,” or “head of household,” and whose 2023 adjusted gross income was $150,000 or less, would receive a $300 credit in 2025.

Middle-Class Tax Cut and Extend the Temporary Personal Income Tax (PIT) High Income Surcharge for Five Years 
The Executive Budget proposes to reduce New York State income tax rates for certain income brackets, while extending the temporary PIT high-income surcharge for five years, until 2032. The proposal would reduce the tax rates paid by married couples with incomes up to $323,200 who file jointly, for heads of households with incomes up to $269,300, and for single taxpayers and married taxpayers who file separately with incomes up to $215,400. The tax rates would be reduced in two phases: an initial rate cut of 0.10% applicable for tax year 2025 and a second rate cut of an additional 0.10% beginning in tax year 2026. Chapter 59 of the Laws of 2022 phased out the PIT temporary high-income surcharge for tax years beginning after 2027, this proposal would extend the surcharge through tax year 2032.

Enhance the Empire State Child Credit for Three Years
The Executive Budget proposes to increase the Empire State Child Credits allowed for tax years 2025, 2026, and 2027. Specifically, a taxpayer would be allowed a refundable credit of $1,000 for each qualifying child under the age of four in tax years 2025, 2026 and 2027. Additionally, a taxpayer would be allowed a refundable credit of $330 for each qualifying child between four and seventeen in 2025, and $500 for each child between four and seventeen in 2026 and 2027.

Eliminate Duplicative IDA Sales Tax Exemption Reporting Requirement 
The Executive Budget proposes to eliminate the requirement for agents and project operators
appointed by Industrial Development Agencies and Authorities (“IDAs”) to file form ST-340,  Annual Report of Sales and Use Tax Exemptions Claimed by Agent/Project Operator of Industrial Development Agency/Authority (IDA) with the Tax Department.

Enact Pass-Through Entity Tax Flexibility 
The Executive Budget proposes to change the deadline for qualifying entities to elect to pay the Pass-Through Entity Tax (“PTET”) and the New York City Pass-Through Entity Tax (“NYC PTET”) from March 15th to September 15th of a given tax year. The proposal would also make corresponding changes to the estimated payment deadlines.

Increase the Article 9-A Estimated Tax Threshold
The Executive Budget proposes to increase the threshold at which corporation tax filers are required to make estimated tax payments, from $1,000 to $5,000, beginning on January 1, 2026.

 

What Did ABC Have to Say?

ABC Empire State Chapter: Hochul’s Budget Offers Quick Fixes, Not Long-Term Solutions

The Associated Builders and Contractors, Empire State Chapter, acknowledges Governor Hochul’s emphasis on infrastructure investment in her 2025 Budget Address, including funding for the Department of Transportation Capital Plan, affordable housing, and green energy initiatives. We wholeheartedly agree with her call to “Build, build, and build some more.” These priorities are critical for New York’s future, but they are promises we’ve heard before. What was notably absent from her plan were concrete actions to address the state’s worsening affordability crisis.

“It is deeply disappointing that the Governor failed to adopt a single policy recommendation from our organization aimed at reducing the skyrocketing cost of construction that burdens taxpayers across the state,” said Brian Sampson, President of the Empire State Chapter of the Associated Builders and Contractors.

“So-called inflation rebate checks and expanded child tax credits may provide short-term relief, but they do nothing to address the larger issue: New York is unaffordable, and the situation continues to deteriorate. Albany has spent decades catering to special interest groups, enacting policies that weaken our economy and drive up costs for everyone. This budget offers quick fixes while sidestepping the structural reforms New York desperately needs.”

At the heart of New York’s affordability crisis are its staggering construction costs, which drive up taxes and make critical projects—schools, hospitals, housing, and renewable energy systems—prohibitively expensive. Policies like project labor agreements (PLAs), expanded prevailing wage mandates, and the antiquated Scaffold Law are direct results of special-interest influence. These policies have left New York ranked second to last on the 2024 Merit Shop Scorecard, which evaluates states on the health of their construction industries. Additionally, the failure to address rampant workers’ compensation fraud further exacerbates these issues. Collectively, these policies represent more than poor governance—they are economic malpractice.

New Yorkers are tired of paying the price for Albany’s unwillingness to stand up to entrenched interests. Without bold reforms to tackle the root causes of the affordability crisis, this budget sends a clear message to everyday New Yorkers: leaders in Albany remain beholden to their largest campaign contributors. It’s time to rebuild our state in a way that benefits all New Yorkers—not just a select few able to write campaign checks.