With a $260-billion state budget for 2027 representing a small increase from 2026, New York Gov. Kathy Hochul (D) said she will continue funding for prior capital investment programs while adding dollars for housing construction, advanced manufacturing development, transportation, energy and other infrastructure.
“This is not an austerity budget,” Hochul said in announcing the proposal Jan. 20. “But it is a disciplined one. We’re continuing to invest in the core services New Yorkers rely on while keeping the growth of State Operating Funds at a responsible level.”
She attributed steady state investment levels to uncertainty surrounding federal funding.
Noting $25 million allotted to expanding the Metropolitan Transit Authority’s Second Avenue Subway west across 125th Street in Manhattan and the ongoing estimated $15.8-billion Gateway Hudson Tunnel project from New Jersey to New York City, Hochul’s executive budget book cautions that the federal government’s October 2025 funding freeze “could negatively impact project schedules” if it continues “over a prolonged period.”
The proposed budget expands state clean water infrastructure funding, 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 park projects, $50 million for modernizing the Jamaica Station transit hub in New York City, an added infusion of $100 million “to support factory-built and modular construction technologies” and $85 million “to develop a semiconductor chip design center and four new quantum technology commercialization hubs.”
The budget arrived one week after the governor proffered changes to environmental permitting to accelerate housing and other projects in her Jan. 13 State of the State address. Under a newly introduced Let Them Build agenda, Hochul proposed amending the State Environmental Quality Review Act to exempt from review certain projects meeting local zoning rules and demonstrating a low environmental impact. These include buildings under a specified height and neighborhood density for New York City residential construction, and housing projects elsewhere in the state on “previously disturbed land, connected to existing water and sewer systems and subject to additional unit caps.”
Hochul’s proposal also includes changes to the law’s classification for other projects, among them clean water and green infrastructure, public parks and “nature-based storm water management” all on previously developed or “improved” land. She also intends to speed development of clean energy projects, including nuclear, by seeking changes to New York Power Authority and New York State Energy Research and Development Authority regulations.
Her State of the State address also introduced plans to expand new advanced nuclear energy construction to 5 GW, from the 1 GW announced last year. If the target is reached—under an effort led by the Power 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,” she said. Small modular reactors are also set to be part of the statewide nuclear mix. A November agency solicitation for the first 1-GW plant has resulted in a number of developers vying to build the first plant with eight proposed upstate locations. Oswego County, which already hosts three operating nuclear plants, is considered a strong candidate for that project. In December, Hochul launched a $40-million workforce training program spread over four years to support advanced nuclear development.
Further changes including imposing a two-year limit under the State Environmental Quality Review Act for issuing an environmental impact statement, and having the state Dept. of Environmental Conservation create GEISs, or generic environmental impact statements, for project archetypes.
Building groups and unions said the reforms and added budget allocations to construction projects would boost the state industry.
Carlo A. Scissura, New York Building Congress president and CEO, praised the Let Them Build agenda, including initiatives to invest $250 million in affordable housing and to expedite permitting and review processes to speed construction of new units, and other infrastructure—“taking these goals off the drawing board and putting them into action.”
The “record funding” for transportation infrastructure under the state Transportation Dept. Capital Plan shows that Hochul “has demonstrated encouraging first steps to ensuring the safety of those traveling throughout their communities and beyond, and the overall health of New York’s economic landscape,” said Donato A. Bianco Jr., Laborers’ Union vice president and New England regional manager, and Michael E. Hellstrom, the union’s vice president and Eastern regional manager, in a joint statement.
Proposals to amend the State Environmental Quality Review Act, “if done right, can help move critical projects forward while preserving environmental safeguards,” said the New York League of Conservation Voters in a statement. The group also encouraged the governor to extend reforms to solar and battery storage through the Accelerate Solar for Affordable Power Act. An automated solar permitting bill making its way through the state Senate “would require municipalities to adopt one of the many online portals to automate plan review and code-compliant approvals, thereby cutting red tape and ensuring that more solar gets built faster,” the league said.
The budget proposal will be taken up by the state legislature, with an April 1 deadline to approve a budget, although final action may extend to a later date. The 2025 state budget was officially approved on May 7-8 last year.