New York’s 2026 State Budget: A Historic Investment in Low-Income Families

In late April, Governor Kathy Hochul announced a significant milestone in New York’s legislative landscape: an agreement reached with state lawmakers on the 2026 state budget. This $254 billion spending plan, finalized after more than a month of negotiations, comes at a critical time when federal policies threaten public spending aimed at supporting low-income families and children.

A Commitment to Affordability

The 2025-26 budget marks a historic commitment to affordability for families, particularly through a substantial increase in the state’s child tax credit. Under this new plan, the tax benefit will rise from $330 to $500 for each child up to 16 years old, with even more significant changes for younger children. Families with children aged 4 and under will see their benefits triple to $1,000. This move aligns with Hochul’s ongoing promise to prioritize the needs of working poor households.

Dede Hill, director of policy at the Schuyler Center, hailed this expansion as “tremendous progress,” emphasizing that families with very young children often face the most financial strain. “There’s plenty of data that demonstrates that families with very young children are often those that are most strapped for cash,” Hill noted, highlighting the challenges faced by parents early in their careers or those who must take time off to care for young children.

Real Stories, Real Impact

For many families, this increase in the child tax credit is more than just a financial statistic; it represents a lifeline. Danielle Jones, a doula and mental health counselor from Rochester, expressed her relief at the additional income she expects to receive during the next tax season. As a single mother of a child with a medical disability, Jones faces higher grocery bills due to her daughter’s special dietary needs. “Living paycheck to paycheck is really a stressful space to be in,” she shared. “Having that extra income would be so helpful and would help really relieve some of the stress around feeding my household.”

Similarly, Danyelle Truesdale, a mother from Buffalo, shared her experience with the state’s child care vouchers. After applying for assistance during a challenging period in her life, she found that the support made all the difference. “Without the child care vouchers, I have absolutely no idea what I would have done,” she said, reflecting on the financial burden of day care costs.

Child Care Assistance: A Step Forward, but Challenges Remain

The budget also includes an additional $400 million for the state’s Child Care Assistance Program, exceeding initial proposals. This program subsidizes the cost of child care for eligible parents, allowing them to contribute only a small copayment based on family size and income. However, the need for child care assistance remains high, with many counties outside New York City recently closing enrollment for new families due to overwhelming demand.

While the budget allocates funds for child care, it does not address the pressing need for increased wages for child care workers, who are among the lowest-paid professionals in the state. City officials have expressed concern that the additional funding for child care vouchers is contingent on local matching funds, which could leave many families without the support they desperately need.

Youth Justice Initiatives: Progress and Setbacks

In addition to family support measures, the budget continues to fund the Raise the Age initiative, which aims to divert 16- and 17-year-olds from the adult criminal justice system. However, lawmakers did not approve a proposed $50 million carve-out for counties to access funds for critical programs that advance violence prevention and life-skills training. Julia Davis, youth justice director at the Children’s Defense Fund, called this a missed opportunity to support emerging adults, who represent a disproportionate number of arrests and incarceration.

Looking Ahead: The Need for Continued Advocacy

As New York’s budget is finalized, advocates for low-income families emphasize the importance of ongoing vigilance. With federal policies threatening cuts to essential programs like Medicaid and nutrition assistance, state leaders may need to step up their efforts to protect vulnerable families. Hill from the Schuyler Center warned, “Looking ahead, New York children and families may need New York State to step up and do much more to buffer families from the impacts of federal action.”

In conclusion, while the 2026 state budget represents a significant investment in low-income families, the challenges ahead remain daunting. The commitment to affordability and support for working households is a step in the right direction, but continued advocacy and action will be essential to ensure that all New Yorkers can thrive in the face of changing federal policies.