Speaker Adrienne Adams and Finance Chair Justin Brannan Offer Testimony on Fiscal Year 2026 State Budget at Joint NYS Senate & Assembly Hearing on Local Government
– Today, New York City Council Speaker Adrienne E. Adams submitted testimony on the Executive Budget for State Fiscal Year 2026 and Finance Committee Chair Justin Brannan delivered testimony before the New York State Joint Legislative Public Hearing on the Governor’s proposed budget. The testimony focuses on raising costs being shifted to the City from the State, increasing state funding for the City’s early childhood education programs, enacting additional Foundation Aid formula changes, and expanding investments in homeless services, and mental and maternal health care.
Speaker Adams’ submitted written testimony is available here.
Council Member Justin Brannan, Chair of the Council’s Committee on Finance, delivered oral testimony at the hearing on behalf of Speaker Adams and the Council. Below are Chair Brannan’s remarks as prepared for delivery:
Good afternoon, Chairs Krueger, Pretlow, Sepúlveda, and Burke, Ranking Minority Members O’Mara, Ra, Chan, and Chang, and all members of the Senate Finance, Assembly Ways and Means, and Cities Committees.
I’m New York City Council Member Justin Brannan, Chair of the Council’s Committee on Finance. Thank you for providing the opportunity for me to provide testimony on behalf of Speaker Adrienne Adams and the New York City Council related to Governor Kathy Hochul’s Executive Budget for State Fiscal Year 2026. I would also like to thank Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie.
My oral testimony will touch upon several of our priorities and the impact of proposals in the Executive Budget on New York City. The full written testimony of Speaker Adams has been submitted and includes a more complete set of priorities.
Our governments share the goal to improve the lives of New Yorkers, and there are several impending challenges that require our strong partnership to confront, including the uncertainty from Washington D.C.
One overarching and continuing area of concern is the shifting share of costs between the City and State for key programs and services. Over the past years, several state budget changes have shifted new costs on to the City.
The Governor’s Executive Budget is proposing to permanently extend the City’s increased contribution of 80 percent of the net paratransit operating expenses of the MTA. This cost shift was scheduled to sunset this year and its extension would cost the City $165 million annually. The Council urges the State to maintain the initial intent for this change to sunset, rather than making it permanent.
We also understand there is a $33.5 billion gap in the MTA’s Capital Plan, which must be addressed, despite the increased capital commitment from the City. We urge that key state of good repair and ADA accessibility upgrades be preserved as you seek to close this funding gap.
Additionally, the Governor is proposing to discontinue the State’s Indigent Care Pool (ICP) payments to New York City’s public hospitals. This action would reduce payments to our hospital system by $56.7 million annually, which would negatively impact its ability to provide healthcare services to those most in need. We urge the State to reverse course and continue the State’s ICP payments to our public hospitals.
On the issue of Medicaid, the Council requests the State to reverse its recent policy that takes localities’ savings from Federal Medicaid Assistance Percentage (FMAP), which it started in 2024. These funds had previously been left with respective local governments and New York City had the greatest portion of this funding due to its population. Each year, this costs the City $343 million lost to the State.
Finally, given the significant increase in homelessness within the city and across the state, we urge the State to lift the cap on its contribution to adult shelter costs and increase its support for sheltering homeless individuals. The State contributes approximately $172 million to the City, which is less than 5 percent of the budget for the City’s Department of Homeless Services, and we need greater support.
There are several other priorities for the City within the State budget, which can help support our success and continued strength as a contributing economic engine for the state.
It is our governments’ responsibility to provide all students with access to a high-quality education. Our students are still struggling to recover from historic levels of learning loss caused by the pandemic. The Governor’s proposed Executive Budget aligns with many of the City’s priorities, including universal free breakfast and lunch that New York City has been implementing for years and an expansion of early college credit opportunities for high school students. There are additional changes required to help meet the educational needs of the City’s children and families.
Governor Hochul’s proposed changes to the Foundation Aid formula provide an initial start to its improvement. We share the belief that the Foundation Aid formula must be updated, but the currently proposed changes are incomplete and would result in New York City schools missing out on an additional $350 million it would have received under the current formula.
We support the proposed replacement of the Free and Reduced-Price Lunch variable with a funding weight that considers a broader group of students who are economically disadvantaged. However, we urge other changes by the Governor and State Legislature to ensure the Foundation Aid formula is updated in a way that accurately captures the significant needs of New York City students. These include replacing the outdated “successful school district model” as the base of the formula, updating the Regional Cost Index to account for cost differences in different parts of the State, adding weights for students in temporary housing and foster care, students with disabilities and English Language Learners, and using differentiated weights for different concentrations of poverty in communities. Our schools cannot afford to receive less money to serve low-income students than they otherwise would.
Another priority for this Council is supporting our city’s early childhood education system, which is critical to the development of our youngest New Yorkers and to the stability of our workforce. The prohibitive cost of childcare is impacting our local economy and forcing working families to leave our state. Early childhood education is one of the best investments we can make to support working families, our economy, and the future of New York.
State education funding that flows to the City largely does not include funds for children enrolled in 3-K and Pre-K programs. While the State contributes a portion of the cost of Pre-K through a separate funding stream, this amount has not changed since Fiscal Year 2019 and the City has been paying for 3-K almost entirely on its own since the expiration of federal stimulus funding at the end of Fiscal Year 2024. The Council urges the State to increase its commitment towards early childhood education to protect our city’s 3-K program that working families depend on and to better support Pre-K.
New York City, like the nation, is in the midst of maternal and mental health crises that require investments into solutions at a greater scale. Governor Hochul and the State Legislature have made these issues a priority, and the Council wants to continue collaborating with our state partners to address the gaps in care.
The Governor’s proposals to create 100 new forensic inpatient psychiatric beds in New York City and invest in proven mental health programs, such as clubhouses, are welcomed. We simply need far greater investments, because too many of our best mental healthcare interventions have waitlists due to insufficient funding.
For example, New York City needs approximately 500 forensic psychiatric beds to serve those in need of the services who currently are not receiving them and left in the City’s jail system that is ill-equipped to serve them. The de facto use of jails for New Yorkers with mental health issues is exacerbating our city’s mental health crisis. We need the State’s support to expand access to Mental Health Courts’ programming, mobile response teams, and other important solutions.
While significant focus has been placed on responding to challenges in the subway system, which is necessary, more attention is needed on the underlying problems that lead to these issues. A concerted effort by the State and City to increase access to a more holistic set of mental health programs is critical.
The Council has also been laser-focused on confronting the maternal mortality crisis, which disproportionately harms Black women and low-income New Yorkers in communities of color. Addressing this public health emergency requires sustained actions at every level of government and across all sectors.
While the State has committed resources to improve maternal health, there are several other critical interventions that are needed. These include increased Medicaid reimbursement and other funding support for doula visits, automatic authorization of coverage of a blood pressure cuff without a prescription under Medicaid for pregnant New Yorkers, and increased midwife reimbursement rates to 100 percent.
There must be a more honest recognition that maternal health is impacted by many determinants of health before, during and after pregnancy. The Council has established a taskforce to bring together the many stakeholders required to address this crisis through action and is committed to partnering further with the State to help end maternal mortality.
Finally, the issue of affordable housing remains a top priority for the health of our city. The Council urges the State to fulfill its commitment to advance the work of a Mitchell-Lama Action Group, envisioned by the Council to focus on addressing developments’ billions of dollars in deferred maintenance and capital improvements.
We also cannot forget about the needs of NYCHA, which has nearly $80 billion in capital repair needs. The State should work collaboratively with the City and NYCHA to unlock the over $500 million remaining in state funding yet to be spent to address critical maintenance issues. The State’s continued support is needed to further reduce tenant rental arrears of over $300 million, which contributes to NYCHA’s operating deficit.
The Council also recognizes the State Legislature is aligned with our desire to reform the City’s property tax system, but progress requires the active partnership of the Governor and Mayor. We will continue to urge the Mayor to present a plan and seek your collaboration and support.
We know that changes in the federal government can have an outsized negative impact on our state and city. It will require increased state support and stronger collaboration to protect New Yorkers, whether through affordable housing, immigrant legal services, public health, or public transit.
Thank you for allowing me to testify on behalf of the New York City Council, and we look forward to continuing our work with you as partners to advance a budget that equitably supports our city and state.
February 4, 2025
Albany, NY
Siurces: Council.NYC.gov , Midtown Tribune
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