29 May NEW YORK STATE FISCAL YEAR 2027 FINAL BUDGET HIGHLIGHTS

The New York State Senate and Assembly finished passing the $268.5 billion SFY 2026-27 final state budget bills just before midnight on May 27, 2026 – the latest state budget in sixteen years and almost two months past the April 1 constitutional deadline for the state budget passage. This long delay required the passage of 15 Emergency Appropriations to allow New York to pay its bills and public employees while negotiating the final budget. However, New York State Senators and Assemblymembers did not receive their paychecks until the budget passed both Houses. The SFY 2027 Enacted Budget provides $268.5 billion in all funds spending, a 5.7% year-over-year increase and the final SFY 2027 budget bills were signed into law by the Governor on May 28, 2026.

This year’s budget process – and the achievement of the 2.7% Targeted Inflationary Increase (TII)—is a testament to your continued advocacy and to the effectiveness of NYDA in reshaping the political landscape. Your efforts ensured that our field was included, recognized, and actively considered throughout the extended budget negotiations. Every call, meeting, tweet, post, and one-click letter you sent – and continued to send during the additional two months of negotiations – kept the TII and the needs of our field at the forefront of the minds of the Governor and Legislature. Your ongoing support and participation in this process are making a meaningful difference and is helping secure the critical investments our field needs.

During the budget debates in both the Senate and Assembly on the Health and Mental Hygiene budget bill – which included funding for Medicaid, Health, OPWDD, OMH, and OASAS – legislator after legislator spoke about the importance of the 2.7% TII for people with developmental disabilities and expressed support for the full 4% increase that had been included in both One-House Budgets. We also understand that the Governor increased the investment to 2.7% without restrictions.

Clearly, the Governor and Legislature heard our collective voice, and that happened because of your advocacy, persistence, and engagement. We deeply appreciate your continued commitment to this effort and to the people our field supports.

Highlights of the final budget deal include:

• 2.7% Target Inflationary Increase (TII) – 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).
• Public School Aid – $39 billion in total education funding, including a guaranteed 2% Foundation Aid increase for every school district and a universal pre-K mandate requiring full-day programs for all eligible 4-year-olds by the 2028-29 school year.
• NY Power Energy Rebate Checks – The final state budget includes $1 billion for energy rebate checks. Married couples will receive a $200 check if their income was $150,000 or less in 2024 and a $150 check if income was between $150,000 and $300,000. People who filed single or head of household returns in 2024 will get a $100 check if their income was $150,000 or less.
• Immigrant protections package, including designating sensitive locations where ICE cannot enter without a judicial warrant and creating a mechanism for New Yorkers to sue ICE agents over constitutional rights violations, retroactive to January 2025.
• Auto Insurance changes – Prohibits insurers from using zip code, education level, and homeownership to set individual premiums.
• Tier 6 Public Retirement changes including teachers’ retirement age reduced to 58 (from 63) with 30 years of experience and restructures employee contribution rates for Tier 6 members across several retirement systems.
• NYC Pied-à-terre tax – authorizes New York City to impose a surcharge on luxury second-homes with an assessed market value equal to $5 million or more, or a residential condominium with a market value of $1 million or more.
• Child Care Funding Increases including child care subsidy increases, fully fund the first two years of free child care for 2-year-olds, and shore up funding for 3-K in New York City; pilot affordable day care for children under 3 in other parts of the state; and require school districts to offer universal pre-K by the 2028–29 school year.

Post Budget:

With the budget bills passed, legislators will turn to passing “non-budget” bills (usually 800-1,000 bills) in the few days that are left in the 2026 Session, which is scheduled to run through, Thursday,  June 4, so that they can return to their districts where they may face June primaries and are all up for election/re-election in November. We will continue to urge both Houses of the Legislature to pass CP State priority bills including:

• The “Traveling with Dignity Act” – S.4042-A (Harckham)/A.6219-A (Burdick) – Memo of Support – would require the installation of height-adjustable adult changing accommodations in very large commercial and public spaces throughout New York State.  Please share and use the one-click to advocate with all New York State legislators and the Governor.
• Employer Assisted Housing Match Grant Act – S.8672-A.10457 – Memo of Support
• Durable Medical Equipment Parity Bill – S.8838 (Rivera)/A.10576 (Lucas) – Memo of Support
• AMAP for Non-Certified Settings – S.6334 (Fahy)/A.7284 (McMahon) – Memo of Support
• The CareForce First Time Home Buyers Act 8675 (Fahy)/A.10449 (Santabarbara) – Memo of Support
• Communication Bill of Rights – S.7792C (Fahy) – Memo of Support
  (However, we oppose S.7792B (Fahy)/A.7363C (Santabarbara) – Memo of Opposition)

We continue to analyze the budget bills and other legislation and will provide updated information.  Below are budget highlights of interest to CP State Affiliates:

OPWDD

• 2.7% Targeted Inflationary Increase – The Governor increased her original 1.7% TII to 2.7% effective April 1, 2026. This year’s 2.7% TII does not include the restrictions that the Legislature had sought and had imposed in 2024. Unfortunately, once again, the TII does not include CCOs. This 2.7% TII, which is the full amount that we had requested, is a significant victory especially when considering the significant federal Medicaid cuts, that are effective in late 2026 and early 2027.
• 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 2027 ($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.
• Enhance Family Care Rates – a 5% Family Care rate enhancement to help increase utilization in one of OPWDD’s “most integrated residential services.”
• Minimum Wage – an additional $39.3 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.
• Create Regional Disability Clinics – continues the $25 million in capital funding that was in the 2026 budget to support one-time costs for building modifications and/or equipment designed to increase accessibility and improve quality of healthcare for people with developmental disabilities who access services in clinics licensed by Article 28 of the Public Health Law and Article 16 of the Mental Hygiene Law. These grants were awarded on April 13, 2026. Congratulations to the CP State Affiliates that received awards.
• Renovate the Institute for Basic Research (IBR) – continues the $75 million five-year capital investment, that began in FY 2026, to renovate the IBR campus, including the development of a Genomics Core facility to allow for the customized identification of genetic imperfections underlying an individual’s developmental disability and creation of space for a Willowbrook learning center.
• OPWDD Care Demonstration Program – extends the legal authority for the OPWDD Care Demonstration Program through March 31, 2028.
• Closure of State Operated IRAs – The Legislature added language to the final budget extending the legal authority for the OPWDD to provide notification of closures or transfer of state-operated individualized residential alternatives to the Legislature and labor organizations through 2028.

DOH

• NHTD/TBI Managed Care Carve-Out – Rather than a permanent carve-out as requested by advocates, the final budget includes a one-year extension of the carve-out to 1/1/2028.
• Early Intervention (EI) – no new rate increases or funding for EI providers.
• Applied Behavioral Analysis (ABA) Reforms – The Legislature accepted the Governor’s proposal which “adjusts reimbursement methodologies so that ABA providers are compensated equitably with their experience.” When fully implemented, this will provide a $30 million state share Medicaid savings to NYS.
• Update Medicaid’s Coinsurance Payment Rules – For dually enrolled members in both Medicaid and either Medicare Part B or Part C, Medicaid pays a beneficiary’s remaining coinsurance amount. However, the coinsurance payment rules are inconsistent depending on the Medicare product and service billed. The final budget “aligns Medicare Part B and Part C payment practices” to pay up to the Medicaid rate (rather than the Medicare rate) for dually eligible individuals. This will provide a state Medicaid savings of $39.5 million when fully implemented in SFY 2028.
• Identify Health Care Barriers – DOH’s Disability and Health Program, in collaboration with the office of the Chief Disability Officer (CDO), will collect and analyze data about health care experiences to identify barriers to care and inform an action plan. CP State has several representatives working with DOH and the CDO on this project.
• Reducing Drug Costs – expands State-led negotiations with pharmaceutical manufacturers to enhance the potential for securing additional supplemental rebates on certain high-cost drugs in the Medicaid program for a state share Medicaid savings of $25 million annually.
• Limit Personal Care Administrative Reimbursement – limits the personal care fee-for-service administrative reimbursement rate at 15 percent of total costs and normalizes the direct care component of rates.
• Capping Traveling Nurse Companies’ Profits – Authorizes the Department of Health to create regulations to monitor and limit the amount of revenue those agencies are allowed to retain as profit.
• MCO Tax – New York’s tax on Managed Care Organizations (MCOs) is set to expire at the end of this year due to changes made at the federal level. Upon approval from CMS, MCOs would be required to pay a tax of 0.35% of the health plan’s total premium revenue each year. This new tax would take effect no earlier than Jan. 1, 2027.
• Rate Increase for Hospitals, Nursing Homes and FQHCs:
  • Hospitals: $706 million
  • Nursing homes: $480 million
  • Federally qualified health centers: $80 million
  • Assisted living: $20 million

INTENTIONALLY OMITTED FROM THE FINAL BUDGET

• Health care scope of practice – rejected the Governor’s proposal to expand certain health care professionals (medical assistants and certified nurse aides) scope of practice and transfer of health care professionals’ oversight from SED to DOH.
• 450,000+ to lose Health Care Coverage July 1, 2026 – As the result of HR 1, more than 450,000 New Yorkers will lose their Essential Health Plan coverage on July 1. Advocates had urged the Governor and the Legislature to use some of the increased revenues and funding to provide continued healthcare coverage for these individuals. The Governor has said that no state can afford to backfill the federal cuts and NYS DOH has been sending texts warning that: Your Essential Plan coverage ends July 1st, 2026 due to federal law signed by President Trump. Learn more: nystateofhealth.ny.gov. Need help? Call 1-855-355-5777 or chat online. Don’t forget to use your current benefits before July 1st!

SED

• School Districts –
  • $39 billion in total School Aid for the 2026-27 school year (SY 2026), which is a $200 million increase over last year’s budget with $143 million of the increase going to New York City.
  • Guaranteed minimum 2% Foundation Aid increase – for a total of $27 billion and includes changes to the Foundation Aid formula to provide additional aid for English language learners, students in foster care and homeless children.
• Masters-in-Education Teacher Incentive Scholarship – Expands eligibility for the Masters-in-Education Teacher Incentive Scholarship to individuals seeking a master’s degree in early childhood education and authorizes the service obligation condition of retaining such scholarship to be satisfied by serving as an employee of an eligible childcare agency.
• Financing Structure for Residential Placements of Children with Special Needs Outside of New York – extends the current structure of financing Committee on Special Education (CSE) residential placements outside of New York City (and provides parity with New York City) to 4/1/2027. The Legislature rejected the Governor’s proposal to make this permanent.
• 4410 & 853 Budgets – The budget requests for 4410 and 853 schools are not included in the state budget but are in NYSED’s methodology request to the Division of Budget that was sent on April 15, 2026.
• NYC Special Education Class Size Increase – Extends the New York City Public Schools’ authority to increase class sizes in special classes containing students in middle and secondary schools to June 30, 2027.
• Universal Pre-K – updated funding formula for statewide universal pre-K based on enrollment, full-day or half-day programs and other factors. All districts must provide full-day pre-K access to eligible 4-year-olds by the 2028–29 school year.
• Electric bus mandate delayed – The state mandate for schools to only buy or lease electric school buses was pushed back five years to 2032 and the deadline for districts to solely operate and maintain zero-emissions buses and vehicles was extended to 2040.
• Universal Free School Meals – incudes the Governor’s $395 million to reimburse the cost of school meals served in SY 2027, a $55 million (16.2 percent) year-to-year increase to continue implementation of the Universal Free School Meals (UFSM) program that was enacted in the FY 2026 Budget.

BEHAVIORAL HEALTH

• 2.7% Targeted Inflationary Increase (TII) 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) to “provide fiscal relief to providers to address rising operating costs and enable them to offer more competitive wages to their staff.”
• Requires Broader Coverage for Addiction Treatment – requires health insurance plans to cover treatment for “substance-related and addictive disorder services” instead of just “substance use disorder” and is intended to cover treatment of problem gambling in the same way that’s mandated for other addiction services

INTENTIONALLY OMITTED FROM THE FINAL BUDGET

• Integrated Behavioral Health Services License/Joint License for Article 31 and 32s – The Governor had provided further language to authorize the Commissioners of OMH and OASAS to jointly license “integrated behavioral health services programs.” These joint licenses would be a single license per provider. The Senate One-House budget includes the language but the Assembly “intentionally omitted” it and has said it will be done as a standalone bill outside the budget and the Assembly has passed the bill.

OTHER

• CREST Grants – $385 million for the Community Resiliency, Economic Sustainability and Technology (CREST) program, which provides capital grants of no less than $50,000 for a variety of eligible projects including investment in facilities which support arts, cultural, athletic, housing, child care, educational, parks and recreational, transportation, port development, economic development, workforce training, employment development, tourism, community redevelopment, climate change mitigation, resiliency, environmental sustainability, and other civic activities. Any projects in support of port development, economic development, workforce training, or employment development shall create or retain jobs or catalyze economic activity in New York State as certified by the commissioner of the department of economic development. All Affiliates are encouraged to apply for this CREST funding.
• Workers’ Compensation Providers – clarifies eligible service providers under the Workers’ Compensation system beyond physicians to any licensed health care provider; restricts performance of “independent medical examinations” to physicians, podiatrists, chiropractors or psychologists only; directs the Chair of the Workers’ Compensation Board to create an “exclusion list” of providers who have been disqualified from providing services under the Workers’ Compensation system; requires reports.
• Accelerate Solar for Affordable Power Act – a measure meant to help rapidly deploy distributed solar and increase grid interconnectedness. That includes solar panels on homes that reduce grid strain while feeding power back into the grid as well, rather than utility-scale solar farms.
• Expanding the State Child & Dependent Care Tax Credits – will provide a larger tax credit to help cover the cost of childcare for children below the age of 13 and caregiver expenses for disabled dependents. Currently, the credit is capped to cover 55% of up to $6,000 regardless of how many children or dependents. The budget raises the cap for people with two or more children or dependents and the new cap on eligible expenses will be 55% of up to $9,000 for people with five or more children or dependents and, as someone’s income rises, that credit will decrease.
• Rent Increase Exemptions for Seniors and People with Disabilities – As proposed by the Governor, the budget raises the household income limit from $50,000 to $75,000 for the SCRIE and DRIE programs which allow seniors and people with disabilities to have the amount of rent they pay legally frozen. If the landlord is able to raise the rent, the tenant’s local government pays the difference to keep that cost flat for the tenant.
• Energy Rebate Checks – The state will be sending out checks to eligible tax filers to help “offset their energy costs.” Filers who are single, married filing separately or filing as head of household will be eligible to receive a check of up to $100. Only people with incomes of $150,000 or less will be eligible. Married filers who report up to $150,000 in income will receive a $200 check. Married filers who report earning between $150,000 and $300,000 will receive a $150 check.
• Limiting NYS Tax on Tips – Tipped workers will now be able to exempt their first $25,000 in tipped income from state income tax, starting in 2027.
• Immigration Protections
  • Sensitive Location Protection – The Legislature also added provisions allowing “sensitive locations” (defined to include non-public schools, nursery schools, OCFS regulated agencies, healthcare facilities including a doctor’s office, hospital or any location providing health or behavioral health services) to adopt policies to any portion of the sensitive location that is not accessible to the general public to any individual seeking access for the purposes of immigration enforcement.
  • Deprivation of Constitutional Rights – The Legislature added provisions entitled the “New York State Bivens’ Act” which provides a civil action remedy for damages against any government official who, acting under the law, statute, ordinance, regulation, custom, or usage, deprives a person of rights secured by the federal Constitution
  • Law Enforcement Face Coverup – The Legislature added provisions prohibiting law enforcement officers from wearing face coverings that conceal, disguise, or obscure their facial identity while interacting with the public in the performance of other duties.
  • Restrictions on Immigration Enforcement by State Employees – The Legislature added provisions which prohibit any state employee from using state resources for immigration enforcement purposes; from disclosing to any immigration authority any individuals’ personally identifiable information; from questioning any individual solely on the basis of an immigration detainer; from inquiring about a person’s citizenship; from collecting information about same; from granting access to non-public areas of property or facilities to an immigration authority; among other protections.
  • Duties of Municipal Governments and Employees Related to Immigration Enforcement – The Legislature added provisions prohibiting municipal government employees from using resources for immigration enforcement purposes.
• Public Safety
  • Printing of 3D Guns and Glock Switches – A priority of the Governor establishes the manufacture of component parts or firearms without a license as a Class D felony and created safety standards for firearm prevention technology for 3D printers.
  • Drones – establishes a crime for the unlawful use of a drone.
• Buffer Zones – establishes 50-foot demonstration buffer zones around religious places of worship and it is now a class B misdemeanor to intentionally interfere with a person attempting to access, or enter or exit, a place of worship.
• Auto Insurance – A major priority of the Governor, the final bill includes some, though not all, of the car insurance reforms she wanted including prohibiting insurers from using consumer data like zip code, education level and homeownership to set individual premiums and the Legislature added a provision to prevent insurance “red-lining” and eliminates a provision that has allowed insurers to unilaterally raise rates by up to 5%.
• State Environmental Quality Review Act Reforms (SEQRA) – There was general agreement to modernize the state’s burdensome environmental review process enacted in 1976 and the final budget completely exempts certain types of projects from the process in efforts to hasten construction of affordable housing, including housing projects with up to 250 units in New York City, and up to 500 units in medium- and high-density areas in the city, up to 300 units in urban areas outside the five boroughs and up to 100 units in nonurban areas from the review process, public parks and trails projects, green infrastructure, clean water infrastructure that avoids negative impacts to natural resources and public school buildings in New York City built by the School Construction Authority. However, there were changes from the agreement that the Governor announced and unfortunately, childcare centers are no longer exempt from the lengthy review process, largely because childcare facilities do not have their own zoning category.

INTENTIONALLY OMITTED FROM THE FINAL BUDGET

• Office of the Medicaid Inspector General (OMIG) Reform Legislation – We are extremely disappointed, but not surprised, that the pared down OMIG Reform legislation (S.4955-B), which amends the Public Health Law concerning audits conducted by the OMIG which would provide transparency, balance and fairness to the audit process and was included in the Senate One House budget proposal, was not in the final budget.

For further information, contact Barbara Crosier at: Bcrosier@cpstate.org.