Highlights from the Governor’s State Fiscal Year 2025 Budget

Governor Hochul released her proposed $233 billion State Fiscal Year 2025 Budget on January 16, 2024.  This represents a $6 billion/4.5% increase over last year’s budget.  Overall highlights include:

  • $845 million increase for Education
  • $20 billion in reserves, which is five times the level of five years ago.
  • $2.4 billion to assist with the migrant crisis – this is considered on time spending.
  • $6 billion (over three years) for the new 1115 Medicaid waiver
  • $650 million for economic development for communities that are “Pro-Housing.”

We will provide further information as we read through the budget bills.  Preliminary highlights of interest to CP State Affiliates include:


  • 5% COLA ($128.9 million) for voluntary operated OPWDD, OMH, OASAS, Office of Children and Family Services (OCFS), Office of Temporary and Disability Assistance (OTDA), and the State Office for the Aging (SOFA) providers effective April 1, 2024.
  • Housing – an additional $15 million to “expand independent living opportunities for individuals with intellectual and developmental disabilities.”
  • New Opportunities – an additional $30 million in FY 2025, ($60 million annualized/$120 million with federal share) to fund OPWDD priority program reforms and new service opportunities that enable individuals to receive the support they need.
  • Minimum wage – an additional $57 million in State funds to support minimum wage increases, including indexing minimum wage to inflation, for staff at programs licensed, certified, or otherwise authorized by OPWDD, OMH, and OASAS.
  • Olmstead Plan – $250,000 for New York’s Most Integrated Setting Coordinating Council (MISCC) to issue an Olmstead Plan
  • “Employment First” state – $6.7 million to become an Employment First” state.
  • Representative payee –makes permanent the authority of mental hygiene facility directors, acting as federally appointed representative payees, to use funds for the cost of care and treatment of persons receiving services. Continues the current statutes and it will avoid a potential revenue loss of $64 million from the Office for People with Developmental Disabilities and $7 million from the Office of Mental Health on an annual basis.
  • DSP Nursing Tasks in Non-Certified Settings – allows Direct Support Professionals (DSPs) in certain OPWDD community based settings, such as a person’s private home or apartment, to perform certain nursing tasks which would increase the availability of nursing task services outside of certified residential settings, allowing more people with developmental disabilities to remain in or transition to more independent settings, which could decrease the reliance on certified residential settings. This is projected to generate annual savings of $700,000 starting in FY 2025 and would take effect April 1, 2024.
  • Special Olympics NY – includes a $1 million annual funding increase.



  • IDD Healthcare – $10.4 million to increase reimbursement rates for healthcare providers serving individuals with physical, intellectual, or developmental disabilities.
  • Early Intervention (EI)– $13.9 million for a 5% EI rate increase for in-person services, as well as a 4 percent rate modifier for rural areas and underserved communities. Modify Early Intervention Billing. The Budget makes various administrative changes to align billing requirements with federal regulations resulting in savings.
  • School Psychologists in Early Intervention Services – would remove the current temporary exemption for School Psychologists to practice as Early Intervention (EI) providers but would extend their authorization to provide non-EI services for certain preschool programs.
  • Discontinue Wage Parity for CDPAP producing State share savings of $200 million in FY 2025. In addition, the State will maximize the use of available resources while working with long term care stakeholders to identify at least $200 million in recurring State share savings across New York’s many long-term care programs, while ensuring services are available for the most vulnerable populations.
  • Implementation of the Medicaid 1115 Waiver Amendment which bundles a comprehensive series of actions to advance health equity, reduce health disparities, and strengthen access to primary and behavioral health care across the state, and will be supported through $7.5 billion in funding over the next three years.
  • Expand Access to Quality Dental Care by:
    • expanding their scope of practice and launching a new loan repayment program, supported by a federal waiver, for dentists who make a four-year commitment to serve the Medicaid population in New York.
    • Expanding access to dental care in school-based health centers, increasing quality oversight of dental care within Medicaid
    • Implementing a provider education campaign.
  • Improve Access to Primary Care, including:
    • Increases funding for adult and pediatric enhancements for Patient-Centered Medical Homes (PCMH). •
    • Expands coverage for Adverse Childhood Experiences (ACES) screening to all adults in Medicaid.
    • Increases rates for providers serving Medicaid members with intellectual, developmental, or physical disabilities.
    • Increases reimbursement rates for adult and children’s mental health services provided in a hospital setting or private physician practice.
  • Licensure Compact -includes legislation to allow New York to join the Interstate Licensure Compact and the Nurse Licensure Compact.
  • Mandatory Dual Special Needs Plan (DSNPs) Dental Coverage – would shift coverage of Medicaid dental benefits for dual eligibles within DNSPs to the Medicare program. Saving $3 million in FY 2025.
  • Pharmacy –
    • reduces coverage for clinically identified over-the-counter drugs,
    • discontinue prescriber prevails,
    • streamline the Medicaid Drug Cap


  • School Districts – provides $35.3 billion in total School Aid for the 2024-25 school year (SY 2025), the highest level of School Aid in history. This investment represents a year-to-year increase of $825 million (2.4 percent), including a $507 million (2.1%) Foundation Aid increase and a $318 million increase in all other School Aid programs, including expense-based aids, categorical aids, and competitive grants.
  • Special Education Rate Reform – As requested by SED, the FY 2025 Executive Budget provides an additional $1.4 million for SED to study and design a new special education tuition rate-setting methodology to streamline and improve the timeliness of tuition rates for providers, bringing total available project funding to $3.9 million. The Executive Budget also extends the deadline for SED to present its recommendations from July 1, 2025, to July 1, 2027. Budget Implications: Enactment of this bill is necessary to implement the FY 2025 Executive
  • Financing Structure for Residential Placements of Children with Special Needs Outside of New York – extends and makes permanent the current structure of financing Committee on Special Education (CSE) residential placements outside of New York City.


  • Commercial Insurance Minimum Reimbursement Rates – legislation to require commercial insurance companies to pay for State-licensed outpatient mental health and substance use services at least at the Medicaid rate.
  • Existing Residential Programs –$43 million for 17,000 housing supports.
  • 988 Hotline- $100,000 to provide specialized maternal mental health training programs for providers that work on 988.
  • Project Teach Expansion – $1.5 Million to create specialized support for individuals during pregnancy and postpartum.
  • Loan Forgiveness Program for Mental Health Clinicians Serving Children—$4 million to establish this program.
  • Youth ACT Team – $9.6 million to create 12 new Youth Act Teams
  • Workforce Incentives – OMH is proposing five new initiatives that address incentives for careers in mental health including a job bank, Behavioral Health Fellowship Program, Credentialing Paraprofessionals and a focus on rural communities.
  • Improve Mental Health Admissions and Discharge – $7 million to expand regulatory compliance activities with OMH licensed and unlicensed programs including inpatient hospitals and CPEPS.
  • Mental Health Courts – $6.2 million including establishing n OMH team that will work with mental health courts and providers to ensure individuals are connected to services that they need.
  • Crisis Intervention Teams (CIT) – $187,000 to increase CIT teams.
  • Mental Health Capital Investments – The Executive Budget continues to build on the Governor’s investments in expanding capacity to care for people with mental illness by funding an additional 200 new psychiatric inpatient beds. The funding covers 125 State-operated inpatient beds, including 15 for children and adolescents, 85 for adults, and 25 forensic; and 75 Transition to Home beds.


  • Sunset the State’s COVID-19 Sick Leave Law – which required employers to provide sick leave benefits, paid family leave, and benefits due to disability for employees subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19. This proposal would sunset the State’s COVID-19 Sick Leave Law as of July 31, 2024.
  • Justice Center
    • Notification to OMIG – clarifies that substantiated reports of abuse or neglect submitted to the Justice Center should be reported to the Office of Medicaid Inspector General (OMIG).
    • Investigations Unit Expansion – $1.3 million for the Investigations Unit to support an additional 18 FTEs across six different titles. This expansion will address the anticipated need for investigative services driven by mental health investments, improve cycle time for investigations, and shorten the time staff accused of unsubstantiated charges are out of work.
  • Interagency Coordinating Council for Services to Persons who are Deaf, Deafblind, or Hard of Hearing – provides for an additional FTE to better support the Interagency Council for the Deaf, Deafblind, or Hard of Hearing within the Office of the Chief Disability Officer (CDO) and the deafblind community.
  • State Workforce –provide staffing investments to reinforce careers and public services in the following:
    • Office for People with Developmental Disabilities: To support the Intensive Treatment Opportunity (ITO) Expansion.
    • Department of Health: To support creating and establishing the regional Emergency Medical Services districts.
    • Office of Mental Health: To support the recruitment and retention of the mental health workforce and additional inpatient beds.