Hochul Saved by Surprise $3 Billion Tax Windfall, But New York Still Barreling Toward Massive Deficits

Niagara Action
Nov 7
2 min read

Governor Kathy Hochul continues to plead financial hardship for New York even as newly released state fiscal reports show another massive surge in tax collections — nearly $3 billion above what her own budget office projected for the first half of the fiscal year.

The unexpected boost pushes expected revenue to about $259 billion, which means NYS will take in $2.6 billion more than Hochul initially claimed she had to work with.

Despite the influx, Hochul’s administration insisted on Thursday that budget pressures remain and argued she will not step in to backfill federal program losses triggered by the shutdown in Washington. One of the most significant impacts is the disappearance of $650 million per month in SNAP benefits previously used to support struggling New Yorkers. Rather than fully offset that loss, Hochul only announced $65 million for food pantries.

Earlier this year, Hochul publicly claimed she was assembling an internal team to “manage government despite these shortfalls,” suggesting the state was facing dire fiscal constraints, including the possibility that residents could be removed from SNAP.

Fiscal conservatives say the new numbers show a different reality. If Albany truly believed the state was in crisis, they argue lawmakers and the governor wouldn’t have passed one of the largest spending increases since the Great Recession. Critics warn that once the economy slows and tax receipts drop, the damage from years of overspending will fall squarely on the state.

State analysts now project an additional $5 billion in tax receipts for 2026, but the long-term outlook remains grim. The budget office still predicts a $27 billion deficit between 2027 and 2029, which includes adjusting the earlier forecast that had the number at $34 billion.

Budget watchdogs say lawmakers must finally confront New York’s spending problems next year or risk far worse gaps than what already exists.

Yet Albany Democrats continue to push ahead with record spending despite economic uncertainty and the potential for drastic federal policy changes. Hochul herself previously described New York’s fiscal picture as bleak, but still approved draining nearly $7 billion from reserve funds to pay off unemployment insurance debt. She also refuses to walk back a widely criticized $2 billion program that mailed out $150–$400 checks to residents purely for political optics.

New York is not short on revenue, but it is short on discipline.