With a state budget of $260 billion for 2027 that represents a small increase from 2026, New York Gov. Kathy Hochul (D) said she will continue to fund prior capital investment programs while adding dollars for housing, advanced manufacturing development, transportation, energy and other infrastructure.
“This is not an austerity budget,” Hochul said in announcing the proposal on January 20.But he is disciplined. We continue to invest in the core services that New Yorkers rely on, keeping the growth of state operating funds at a responsible level.”
He attributed the steady state investment levels to uncertainty about federal funding.
Considering $25 million earmarked for the Metropolitan Transit Authority’s Second Avenue subway expansion west through 125th Street in Manhattan and the estimated $15.8 billion Gateway Hudson Tunnel project from New Jersey to New York, Hochul’s executive budget book warns that the federal government’s October 2025 funding freeze “could adversely affect project schedules” if it continues “for an extended period.”
The proposed budget expands state funding for clean water infrastructure, with the governor allocating an additional $3.75 billion over five years for projects that include wastewater treatment. It also adds $340 million for state parks projects, $50 million to modernize the Jamaica Station Transit Center in New York City, an additional infusion of $100 million.”to support modular and factory-built construction technologies” and $85 million “to develop a semiconductor chip design center and four new quantum technology commercialization centers.”
The budget came a week after the governor offered changes to environmental permits to speed up housing and other projects in his city. January 13 Address of the state of the state. Under a new Let Them Build agenda, Hochul proposed amending the state Environmental Quality Review Act to exempt from review certain projects that meet local zoning rules and demonstrate low environmental impact. These include buildings with a height and neighborhood density specified for residential construction in New York City and housing projects elsewhere in the state on “previously disturbed land, connected to existing water and sewer systems and subject to additional unit limits.”
Hochul’s proposal also includes changes to the law’s classification for other projects, including clean water and green infrastructure, public parks and “nature-based stormwater management,” all on previously developed or “improved” land. It also intends to speed up the development of clean energy projects, including nuclear, by seeking changes to regulations at the New York Power Authority and the New York State Energy Research and Development Authority.
His State of the State address also laid out plans to expand new advanced nuclear power construction up to 5 GW, of the 1 GW announced last year. If the goal is achieved, under an effort led by the Energy Authority and working with potential private partners, it will be as much as the state has ever built. “If there’s one thing I believe, it’s this: go big or go home,” he said. Small modular reactors will also be part of the nuclear mix across the state. A November agency request for the first 1GW plant has resulted in a number of developers competing to build the first plant with eight locations proposed in the upstate. Oswego County, which is already home to three operating nuclear plants, is considered a strong candidate for this project. In December, Hochul launched a $40 million workforce training program spread over four years to support advanced nuclear development.
Other changes include imposing a two-year limit under the state Environmental Quality Review Act to issue an environmental impact statement and requiring the Department of Environmental Conservation to create GEISs, or generic environmental impact statements, for project archetypes.
Construction groups and unions said the reforms and added budget allocations to construction projects would boost the state’s industry.
Carlo A. Scissura, president and CEO of the New York Building Congress, praised the Let them build the schedule, including initiatives to invest $250 million in affordable housing and to speed up permitting and review processes to speed up construction of new units and other infrastructure: “getting these goals off the drawing board and into action.”
The “record funding” for transport infrastructure under the The state transportation department’s capital plan shows that Hochul “has demonstrated encouraging first steps to ensure the safety of commuters in their communities and beyond, and the overall health of New York’s economic landscape,” said Donato A. Bianco Jr., Union of Workers vice president and regional manager for New England, and Michael E. Hellstrom, the of the union vice president and regional manager of the East, in a joint statement.
Proposals to amend the state Environmental Quality Review Act, “if done right, can help advance critical projects while preserving environmental safeguards.” the League of Conservation Voters of New York said in a statement. The group also encouraged the governor to extend reforms to solar and battery storage through the Solar Acceleration for Affordable Energy Act. Automated Solar Permit Bill Passes State Senate”would require municipalities to adopt one of many online portals to automate plan review and code-compliant approvals, thereby cutting red tape and ensuring more solar is built faster,” the league said.
The budget proposal will be taken up by the state legislature, with an April 1 deadline to pass a budget, although final action may be pushed to a later date. The 2025 state budget was officially approved on May 7 and 8 last year.
