2025 State of the State Summary

On Tuesday, January 14th Governor Kathy Hochul presented her State of the State address and highlighted key legislative initiatives for her administration in 2025. The speech gave a glimpse into the populous message that will be the theme of her administration in 2025 and beyond. Although short on details and silent on potential tax increases, the Governor's address had several key mentions that will be of interest to The Business Council. The Governor’s State of the State briefing book can be found here . Staff has highlighted from her briefing book a number of key initiatives that we will look at more closely once the budget is released. It is our expectation that the budget will be released on January 21st. Please see the staff highlights below:

MWBE
• Increasing discretionary purchasing thresholds from $750,000 to $1.5M when Agencies are purchasing from MWBE vendors and contractors.
• Expanding the use of pre-qualified list of vendors for State Agencies to use pre-qualified list of vendors.
• Plans mending Infrastructure Investment Act and other relevant statutes to allow flexibility for State Agencies and authorities to chose how capital projects are delivered.


Small Business
• Introducing Low Interest Capital program, which will expand the Linked Deposit Program that offers lower interest rate loans to small businesses.
• Assisting small businesses to adapt and integrate AI through partnering ESD with Entrepreneurship Assistance Centers (EACs) to provide small businesses and entrepreneurs with training in AI.
• Grant program for specific small businesses and other organizations such as food banks or grocery stores in underserved communities to replace high emission refrigerator with a lower-emissions version to help comply with climate law for lower greenhouse gas emissions.
• Expanding the Jobs Retention Tax Credit program to include small businesses with 10 or more employees for businesses impacted by a severe weather disaster event. Will also remove the industry specific limitation of the program so all businesses impacted by the event will be able to have support.


Agriculture
• Establishing the Food and Fiber Small-Scale Processing Grant Program to grow the supply of diverse products for local purchasing programs in New York
• Integration of agricultural education into public school curriculum. The Governor plans to increase the New York Agriculture in the Classroom program to ensure funding for resources for educators for this new curriculum.
• Increasing the Farmworker Housing Program to assist with the cost of maintenance of employee housing for farm workers
• The Governor plans to invest in improving tracking of lost farmland and capacity building within New York Community led land trust to better execute Environmental Bond Act dollars allocated to farmland protection

Please contact Mario Vazquez at [email protected] for more information

Housing
• Provide new state funding to support first-time homebuyers down payment assistance.
• Creation of an Affordable Homebuyer Tax Incentive
The Governor is proposing an affordable homebuyer property tax incentive that localities can opt into to bring down costs and increase the supply of houses built with assistance from governmental entities, nonprofits, landbanks, or community land trusts and sold to low- and moderate-income homebuyers.
 
• Disincentivize Bulk Purchases of Homes by Institutional Investor
Governor Hochul will propose legislation to create a 75-day waiting period in which certain Institutional investors cannot bid on single- and two-family homes, to give individuals and families a fair chance. In addition, the Governor will propose tax law changes to disincentivize these entities from amassing large portfolios of single-family and two-family homes.
 
• Create a Pro-Housing Supply Infrastructure Fund
Governor Hochul will create a $100million Pro-Housing Supply fund for certified Pro-Housing Communities to assist with critical infrastructure projects necessary to create new housing, such as sewer and water infrastructure upgrades.
 
• Launch New York State’s First Mixed-Income Revolving Loan Fund
Governor Hochul will launch the state’s first revolving loan fund to spur mixed-income rental development outside New York City. The fund will fill construction financing gaps by providing a lower-cost and more flexible form of capital than is generally available in market financing. The funding will revolve and self-sustain overtime through repayments once projects have been converted to permanent financing after construct
 
• Ban Collusion and Use of Algorithm-Enabled Rent Price Fixing- Governor Hochul is proposing legislation to address rent price fixing collusion.


Transportation
• Governor Hochul will restore the purchasing power of New York State Department of Transportation’s (DOT) capital plan to address rising construction costs, ensuring that projects under the State Fiscal Years 2022/2023 – 2026/2027 plan remain on track.
 
Economic Development
• Double Down on Shovel-Ready Sites for Modern Manufacturing
The Governor proposes a new round of FAST NY that prioritizes semiconductor manufacturing and supply chain projects as well as cleantech and green economy projects. This new round of funding will include a focus on equipping sites with utility access, including renewable and clean energy.
 
• Increasing Speed, Equity, and Efficiency in Capital Project Delivery
To improve the efficiency of project delivery and continue supporting MWBE access to public contracts, Governor Hochul will work to amend the Infrastructure Investment Act and other relevant statutes to provide agencies and authorities with more flexibility in how they deliver projects and ensure that they are able to use the best tool for the job.
 
• Improve Tracking and Transparency for State Assets and Capital Projects
Governor Hochul will create a database and dashboard for capital projects, along with a public-facing property inventory map to enhance transparency and efficiency in managing State assets.

Please contact Joseph Alston at [email protected] for more information.

 

Labor/Human Resources

  • Expand Enforcement Power Following an Unpaid Wage Theft Judgment

Governor Hochul will advance legislation to expand DOL’s enforcement power to include the authority to levy liens, seize financial assets, and issue a stop work order following an unpaid wage theft judgement.
  

  • Align Child Labor Law Penalties with Severity of Violation

Governor Hochul will advance legislation to raise the maximum civil penalties, include felony-level charges for violations that result in serious injury to children, and define knowingly employing a minor in a dangerous occupation resulting in their death as a classification of homicide. Governor Hochul will direct DOL to offer businesses reduced penalties if they participate in a child labor prevention program.
 

  • Support Workers Displaced By Artificial Intelligence

At the Governor’s direction, DOL will require businesses submitting notices of worker layoffs to its Worker Adjustment and Retraining Notification (WARN) system to convey whether a layoff is related to a businesses’ use of AI. Any impacted worker will be able to access the broad array of workforce training programs and supports offered by DOL or local partners.

 

  • Expand Access to Medical Care in the Workers’ Compensation System

Governor Hochul will advance legislation to automatically authorize all medical providers licensed in New York State and allow medical and surgical residents and fellows to treat workers’ compensation claimants.  Governor Hochul will increase the fee schedule and tie it to the Medicare fee schedule.
 
In December 2006, the Department of Financial Services (DFS) issued legal guidance directing health insurers to cover medical treatment for injured workers while the workers’ compensation claim is being contested. To ensure injured workers do not have a gap in payment of medical bills, Governor Hochul will advance legislation codifying this guidance and permitting workers’ compensation insurers to temporarily pay medical bills without admitting responsibility for the workers’ compensation claim.
  

  • Digitize Youth Working Papers

Governor Hochul will advance legislation to digitize working papers for minors and create a one-stop online portal for young people, caregivers, employers, and school administrators.
 

Create Safer Workplaces for Survivors of Gender-Based Violence

Governor Hochul will propose legislation to codify into state law the requirement that all state vendors affirm they have a gender-based violence and workplace policy before receiving state contracts.  
  

  • Strengthen the Workers with Disabilities Employment Tax Credit

The Workers with Disabilities Employment Tax Credit supports businesses who hire people with
Disabilities.  Governor Hochul will more than double the maximum tax credit from $2,100 to $5,000.
 

  • Turbocharge Hiring by Startups

Governor Hochul is advancing the Companies Attracting Talent to Advance Leading Innovations
and Scale Technologies in New York (CATALIST NY) program. CATALIST NY will allow small
businesses that have completed a New York State incubator program to be eligible for personal
income tax benefits to reduce the cost of hiring.

Please contact Frank Kerbein at [email protected] for additional information

 

Insurance
• Provide assistance to nonprofit affordable housing owners to undertake repairs and other steps needed to be eligible for private insurance captives (Captive Insurance for Affordable Housing)
 
Consumer Protection
• Propose legislation to require businesses to clearly notify consumers when the price they see was set by an algorithm using their consumer data to personalize the price; prohibit the use of protected class data, including age and sex, in the setting of prices. (Algorithmic Price Discrimination/Surveillance Pricing)

• Propose legislation to require retails sellers to offer a minimum 30-day return window for various products; outline guidelines on disclosure of any return policies and exemptions for perishable, customized, final sale or other goods ineligible for return; apply to medium and larger businesses. (Standardize Returns and Refunds)

• Propose legislation to simplify subscription cancellations and renewals (Click to Cancel)
 
Financial Services
• Direct DFS to regulate ‘predatory’ fees, cap the number of daily overdraft banking charges and ensure timely notifications (Overdraft and Non-Sufficient Funds Fees)

• Propose legislation to establish a licensing and supervision framework for Buy Now Pay Later lenders, including disclosure requirements, dispute resolution standards, late fee limits and data privacy protections. Anticipate it will be like FY25 Executive Budget Proposal. (Buy Now Pay Later Loan Oversight)

• Propose legislation to protect elderly New Yorkers from fraudulent activity by providing banks and other financial institutions with more authority to pause certain suspicious transactions and mandate reporting of suspected exploitation and fraud to law enforcement and Adult Protective Services. Anticipate it will be like FY25 Executive Budget Proposal. (Elder Financial Exploitation)
 
Health & Healthcare Insurance
• Allocate new resources to ensure insurers are providing mental health care coverage; resources will be used to strengthen compliance oversight, consumer and provider education, and investigate and mediate complaints. (Hold Health Insurance Companies Accountable)

• Evaluate access to GLP-1 drugs for Medicaid members at high risk of major cardiovascular events; seek to work with other states to pressure drug manufacturers to lower the price of GLP-1 drugs. (Increase Access to Lifesaving Obesity Drugs)

• Create minimum standards for dental plans available through the Marketplace; explore use of federal 1332 waiver to subsidize the cost of purchasing dental plans; propose legislation to allow dental hygienist to practice in more settings; direct health plans to reinvest funding in initiatives to improve availability of dental care. (Expand Access to Dental Care)

• Introduce legislation to strengthen State’s ability to collect data and perform in-depth market analysis of private practice healthcare M&A transactions. (Strengthen Reporting Requirements for Healthcare Investors)

• Propose legislation to move the process for issuing physician licenses from SED to DOH, including oversight of physician and PA scope of practice (Remove Unnecessary Restrictions of Healthcare Workers)

• Direct DOH to complete a comprehensive review of health plan network adequacy standards and increase enforcement of plan compliance through monitoring and penalties (Update and Improve Network Adequacy Standards)

• Direct DOH to complete a comprehensive review of the New York Health Plan Marketplace’s application experience to improve and streamline process (Revamp and Improve Customer Experience on New York Health Plan Marketplace)

• Explore participation in FDA;s Section 804 Drug Importation Program to obtain approval to import prescription drugs from Canada (Drug Importation under Increase Affordability of Prescription Drugs)

• Introduce legislation requiring greater transparency from PBMS to hold PBMs and drug manufacturers accountable for any hidden or unnecessary costs added to prescription drugs (Increase Affordability of Prescription Drugs)
 
Please contact Chelsea Lemon at [email protected] for additional information.

Child Care

  • Establish the Birth Allowance for Beginning Year Benefit - the New York State Birth Allowance for Beginning Year, or the BABY Benefit—to financially insecure parents during pregnancy and throughout the first year of a child’s life

$100 per month benefit during pregnancy and an additional $1,200 payment at birth for New Yorkers who receive public assistance

  • Provide Child Care Construction Grants - provide $100 million in capital grants for child care centers, counties, and municipalities. These funds will help ensure child care deserts continue to be addressed through the opening of new child care programs or through providing funds for necessary repairs and renovations at existing programs
  • Advance $10 million in funding targeted to help family child care programs cover small renovations and repairs that are necessary to provide safe, highquality child care. OCFS will administer these grants and provide technical assistance to help family child care providers undertake projects.
  • Create the New York Coalition for Child Care- New York Coalition for Child Care, which will formalize a partnership between businesses, unions, tax and revenue experts, and child care providers with the goal of expanding our child care system to one that supports all families and child care providers equitably. The Coalition will work to identify a responsible and sustainable path toward funding Universal Child Care.
  • Launch a Child Care Substitute Pool- create a substitute pool, like public school education, that will reduce logistical barriers to keeping child care programs open every day, helping families maintain their daily obligations while also creating a workforce pipeline for child care providers


Education 

  • Build a Statewide Data System to Improve Education and Workforce Outcomes – New York State has secured federal funding to begin the process of developing and establishing a SLDS. Governor Hochul will introduce legislation to establish and define the SLDS, including the creation of a governance board to ensure data collection meets the State's privacy obligations
  • Launch College in High School Opportunity Fund – Building on these successful models, Governor Hochul will work to put new funding and State support behind the early college in high school enrollment model.
  • Aims to increase funding and support to help streamline the multiple existing college in high school programs, create parameters for college or university participation, and provide ongoing, per-credit funding for early college in high school programs. These enhancements will create a consistent funding system while increasing reporting requirements to give the State additional data to track student credit completion.
  • Streamline the Part-Time Tuition Assistance Program - streamline the three existing State financial aid programs for part-time students to simplify the experience and expand TAP eligibility
  • Expand Educational Pathways to Public Service Careers - partner with SUNY and the City University of New York (CUNY) to award academic credit for public safety training programs and integrate these credits into degree pathways


Workforce Development 

  • ASCENT NY – With a focus on advanced manufacturing, technology, cybersecurity, engineering, artificial intelligence, healthcare, and teaching, this initiative, of increasing high-demand workforce industries, will be supported through the Fund Free Community College proposal. 
  • Fund Free Community College in High-Demand Occupations - New York State will make community college free for students ages 25-55 pursuing select associates degrees in high demand occupations, including nursing, teaching, technology, engineering, and more. The State will cover the costs of tuition, books, and fees for participants in this program.
  • Facilitate New Training Pathways into High-Demand Occupations - the Department of Labor (DOL) will launch a new initiative to support employer-led training. Participating businesses will be reimbursed 50 percent of the trainee wages during the program, with the requirement that these employees remain on the job for at least one year after completing the training. Additionally, DOL will collaborate with school districts and businesses to recruit high school students for a summer work experience program in high-demand fields. Businesses participating in the program will receive reimbursement for 50 percent of the students’ stipends during the summer.
  • Create New Registered Apprenticeships and Pre-Apprenticeships in High Demand Fields - will provide funding for providers of registered apprenticeships and pre-apprenticeships in the high-demand occupations, to cover partial apprentice wages, training costs, and for underrepresented groups, wraparound services.
  • Expand Cybersecurity Careers with Degree Reform and New Fellowships - will reform the way executive agencies hire cybersecurity and technology talent by removing four-year degree requirements for many entry-level and early-career positions and will create a cybersecurity fellows program with SUNY and CUNY community colleges that places graduates in two-year jobs in State government
  • Diversify the Artificial Intelligence Pipeline with Artificial Intelligence Prep - Empire State Development Corporation (ESD) will launch AI Prep: a workforce development initiative focused on the training and placement of disadvantaged college students into AI jobs.
  • Leverage Federal Support to Expand Health, Behavioral, and Social Care Workforce - As part of the State’s federal Medicaid 1115 waiver, New York is implementing two workforce programs. The Career Pathways Training program is funding educational and career support services for new and advancing health, behavioral health, and social care workers. Through three regional Workforce Investment Organizations, the program covers tuition, textbooks, and educational and career supports and place individuals in high-demand titles.
  • NYS will also launch the Student Loan Repayment Program, which will provide loan payments for psychiatrists, primary care physicians, dentists, nurse practitioners, and pediatric clinical nurse specialists who make a fouryear commitment to work at providers that serve at least 30 percent Medicaid or uninsured members.
  • Deploy State Funding to Support Healthcare Training Programs - State will provide grants for regional programs that prepare and support healthcare students through the Healthcare Training and Life-skills Program, covering costs like child care, transportation, and tutoring
  • Provide support for Area Health Education Centers, which are local training programs that recruit younger individuals from underrepresented populations into healthcare professions.
  • Launch Health Workforce Connects, a portal that will engage individuals in new and growing careers in healthcare.
  • Digitize Youth Working Papers - will advance legislation to digitize working papers for minors and create a one-stop online portal for young people, caregivers, employers, and school administrators to modernize the process and reduce burdens on businesses. 
  • Improve Tracking and Transparency for State Assets and Capital Projects - will create a database and dashboard for capital projects, along with a public-facing property inventory map to enhance transparency and efficiency in managing State assets. 
  • State Office of Innovation and Efficiency - will establish a dedicated office to support agencies by providing internal consulting, centralized project support, and performance tracking. The office will issue annual progress reports, ensuring transparent and measurable service improvements for New Yorkers.
  • Launch a Demonstration Program to Mitigate the "Benefits Cliff" - will launch the Monroe Ladder Demonstration Program. The program will bring together resources from employers and the [Monroe] County and will help address any real or perceived loss of means-tested public benefits through the provision of work incentive payments. Funding will also be provided for evaluation to understand any behavioral changes attributable to mitigation of the benefits cliff, and the associated impacts on participating workers, their families, as well as employers.

 
Please contact Crystal Griffith at [email protected]

 

Taxation
 • While the SOTS contains no specific recommendations for increased revenue, it states that to fund the MTA capital plan, the Governor will propose “a balanced mix of federal, state, city, and MTA contributions . . . alongside new revenue sources to be agreed during budget negotiations.

• Provide $1 billion in personal income tax relief by reducing rates for taxpayers in the lowest five tax brackets (e.g., income under $323,200 for joint filers) to take effect in the 2025 tax year.

• $3 billion in one-time “inflation refunds” of $300 for taxpayers making less than $150,000 and $500 for thoser under $300,000, payable in calendar 2025 using “surplus” sales tax receipts.

• Expand the state child tax credit up to $1,000 per child under four and up to $500 per child aged four to sixteen, to be phased in over 2 years.

• Create the “New York Coalition for Child Care” to businesses, unions, tax and revenue experts, and child care providers to identify a responsible and sustainable path toward funding Universal Child Care in New York.

• Create a new Excelsior Jobs program semiconductor supply chain tax credit up to 7% for new jobs, and 3% for capital investments, and an expanded credit for large-scale (over $100 million) semiconductor research investments – and propose a 10 year extension of the overall Exclesior Jobs program.

• Personal income tax credits for small businesses that have completed a NYS incubator program “to reduce the cost of hiring . . . new employees during a critical phase of their expansion.”

• Limit the “bulk purchases of homes” by adopting tax law changes to “disincentivize [institutional investors] from amassing large portfolios of single-family and two-family homes.”

• Adopt several mechanisms to support housing development including the doubling of low-income housing credits, decoupling the state historic tax credit from the federal credit, and expanded authorization for municipalities to adopt tax exemptions to incentivize redevelopment of abandoned properties into affordable homes.

• Increase the “workers with disabilities employment” credit from $2,100 to $5,000 and simplify the application process.

• Modify the “jobs retention tax credit” to include businesses with ten or more employees, and eliminate industry-specific limitations.
 
Energy & Environment
• Move forward toward adoption of a greenhouse gas “cap-and-invest” program, and adoption of a new GHG emission reporting regulation “by the end of this year.”

• Reauthorize funding for the state’s inactive hazardous waste site (i.e., “superfund”) and provide the program with “new tools to accelerate cleanups, enabling contaminated sites to be repurposed for productive use.”

• Develop a “Master Plan for Responsible Advanced Nuclear Development” and lead a multi-state “Consortium on Nuclear Energy” and support an application by Constellation Energy for federal funding to explore the possibility of bringing a small modular reactor online.

• Direct over $1 billion in new spending (from unspecified sources) on sustainability programs including retrofitting homes and incentivizing the installation of heat pumps, building thermal energy networks at SUNY campuses, expanding green transportation options across the state among other measures.

• Encourage the development of “Clean Energy Zones” (regional concentrations of clean electric generation and transmission), by providing priority and other mechanisms.

• Direct NYPA and state agencies to enter into contracts for up to 500 MW of renewable energy by 2030.

Please contact Ken Pokalsky at [email protected] for additional information

 

AI Related Issues
• Proposes outlawing artificial intelligence generated sexual abuse material.
 • Proposes requiring AI companionship companies to implement safety features to protect against self-harm and to remind users they are interacting with a machine.

The Governor has proposed additional AI initiatives in relation to labor and workforce development that are highlighted in other sections.

Please contact Paul Zuber at [email protected] for additional information.