Albany, NY (June 12, 2026)
New York’s newly approved state budget is now projected to total roughly $277 billion, nearly $9 billion more than the figure previously highlighted by Gov. Kathy Hochul’s administration when the spending agreement was announced.
The updated total has drawn sharp criticism from Republican lawmakers, who accused state leaders of approving a budget without fully disclosing its final cost. Assembly Minority Leader Ed Ra said the increase reflects a flawed process in which taxpayers were asked to accept a spending plan before key details were made clear.
Much of the increase is tied to health coverage costs. About $7 billion of the added spending comes from the use of a roughly $10 billion reserve connected to New York’s Essential Plan, which provides health insurance for low- and moderate-income residents. The funding will help cover approximately 1.4 million people, including certain non-citizens who are entitled under state legal requirements to receive health coverage but can no longer be supported with some federal Medicaid funds.
The issue stems from changes in federal health policy that affected how states may use Medicaid dollars for non-citizen coverage. New York received federal approval to tap the reserve, temporarily avoiding what could have been a multibillion-dollar state-only Medicaid cost.
The long-term question remains unresolved. State budget documents indicate that the plan for funding the coverage after the reserve runs out in late 2028 has not yet been determined.
Hochul’s administration has defended the overall budget as fiscally responsible and said the updated figure reflects a more complete accounting that includes additional federal funding. Critics argue the revision raises serious concerns about transparency and future budget gaps.
The dispute comes as New York faces growing pressure from healthcare costs, federal policy changes, and rising demands on state programs. While the current funding approach may prevent immediate disruptions in coverage, lawmakers are likely to face difficult decisions in the coming years over how to sustain the program once temporary reserves are exhausted.