2026 State of the State Summary | The Business Council

On Tuesday, January 13, 2026, Governor Hochul delivered her State of the State address focusing on identified initiatives for the 2026 legislative session. Since the Governor is entering an election year, the address emphasized issues with strong electoral resonance, particularly affordability, which remains a top concern for New Yorkers. A recent Politico poll found that 53% of the respondents identified cost of living as the top issue facing the United States. The Governor’s State of the State strategically seeks to address issues concerning affordability, recent federal cuts and the growing sentiment by New York voters concerning policies being pursued by the Trump Administration.

The Governor’s State of the State Address also includes several proposals advocated by The Business Council. In 2025, The Public Institute, in collaboration with the New York State Economic Development Council and The Business Council, released the Blueprint for New York. That study focused on those issues that have impacted the ability for businesses to succeed, grow, and expand their economic footprint in New York. The study’s recommendations included changes to SEQRA regulation, as well as a review of overly burdensome regulations that have been identified as directly impacting economic development in New York State. Governor Hochul’s inclusion of these proposals in her State of the State address serves as a notable example of her commitment to addressing affordability as a central issue in 2026.

Below are some highlights of the Governor’s State of the State Address that have been identified by the Government Affairs staff. Staff will continue to monitor these proposals, many of which will be included in the Governor’s 2026-2027 Executive Budget proposal which is expected to be released on January 20th.

Alcohol and Beverage Control Law (ABC Law)

The Governor proposes legislation designed to modernize the ABC Law.

Although it is not clear as to the extent of modernization, one example cited will be to increase opportunities for alcoholic beverage manufacturers by allowing all producers to own up to three restaurant or tavern licenses and open restaurants or bars at their manufacturing facilities which will encourage out-of-state manufacturers to invest in New York.

An additional proposal would permit the SLA to allow dancing in taverns and bars and create a new hybrid restaurant-tavern license.

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

Technology

Creation of new office (DIGIT) to serve as a central, authoritative body for digital safety and technological governance, tasked with devising new approaches and ensuring consistent enforcement to keep New Yorkers safe online. (Creation of New Office of Digital Innovation, Governance, Integrity, and Trust (DIGIT), pg.85)

Require all data brokers operating in New York State to register as data brokers and allow New Yorkers to submit a single, centralized request to have personal data obtained by data brokers deleted. (Protecting Our Private Data, pg.86)

Require AI-generated content to include labeling about its origins and creation. (Requiring Labeling for AI-Generated Content, pg.86)

Ban non-consensual deepfakes in specified periods leading up to elections, including depictions of opposition candidates and ban sharing false information about elections, including where and when they are held, qualifications or restrictions on voter eligibility, and an individual’s voter registration status or eligibility. (Protecting Elections from Misleading or Deceptive AI Content, pg. 87)

Expand age verification requirements beyond social media platforms to online game platforms, restrict the use of integrated AI chatbot features on social media by children, limit direct messages from non-connections to minor accounts, default children to the highest privacy settings on covered platforms (including restrictions on real-time location sharing data), and implement parental controls over a child’s ability to make or receive payments on online platforms. (Safe by Design: Creating Safe Digital Environments for Kids, pg. 118)

Please contact Chelsea Lemon at [email protected] for additional information.

Consumer Affairs

Codify existing federal rules that require discounts to be “bona fide” or genuine and represent an actual discount on a regularly offered reference price. (Prohibiting Misleading “Discounts” in Online Sales, pg. 87)

Please contact Chelsea Lemon at [email protected] for additional information.

Environmental Regulation, Permitting and Funding

Adopt the “Let Them Build” agenda to allow the building of housing and other critical projects faster and more affordable while continuing to protect the environment. Includes:

Exempting from SEQRA certain housing projects that are compliant with local zoning and have no significant impacts on the environment. Projects will be subject to size caps, and outside of New York City must be “on previously disturbed land [and] connected to existing water and sewer systems.

Expand the SEQRA Type II (exempt) project list to include clean water infrastructure projects, green infrastructure projects, public parks and new or renovated childcare centers (all if on previously disturbed land.)

Direct the New York Power Authority and NYSERDA to update their regulations to facilitate and speed up the deployment of clean energy projects.

Establish a two-year timetable for the completion of SEQRA reviews, from the date of a “positive declaration” to the issuance of the final agency decision.

Direct DEC to develop Generic Environmental Impact Statements for common project types which allow developers to quickly progress through the environmental review process and guide their upfront decision making and site selection.

Direct state agencies involved in permitting and environmental reviews their processes and identify opportunities to accelerate reviews and alleviate bottlenecks, with recommendations due by September 1, 2026.

DEC will launch “Smart Access,” a consolidated platform for applicants and government agencies to follow the progress of permits and environmental reviews in real time and access the latest documents.

State agencies, in partnership with the newly established Office of Performance Management and Innovation (OPMI), will develop internal performance tracking systems to monitor the status of permits and environmental reviews.

Establish a new program to streamline and speed up permitting processes for key economic development and infrastructure projects (e.g., nuclear generation, subway extensions) which will be responsible for setting and overseeing permitting schedules; assist with interagency, federal, and local coordination; accelerate permitting processes; and address other issues.

Create a five-year, $3.75 billion program to support water infrastructure investments; create a new “Smart Growth Water Grant Program” to focus on sewer and water projects that directly enable the construction of new housing units and the creation of permanent jobs.

Provide $425 million in funding for the environmental protection fund (EPF.)

Provide “additional resources” for the DEC to accelerate and further support the plugging of abandoned oil and gas wells.

DEC to adopt regulations to require solid waste landfills to treat leachate for harmful contaminants (e.g., heavy metals and PFAS) before discharge; and to provide funding for local governments to comply.

Energy & Utilities

Create the Energize NY Development program at PSC, to modernize how large energy users connect to the grid, with strict conditions to protect ratepayers. This effort will streamline interconnection rules while “explicitly requiring that projects driving exceptional demand without exceptional job creation or other benefits cover the costs they create —through charges or supplying their own power.”

Require utilities to create and report on an affordability index showing the energy burden on their customers throughout their service territory; require the PSC to annually report on utility affordability by utility; and empower the PSC to install an independent Affordability Monitor inside the utility to address affordability issues.

Advance legislation to modernize how the review and resolution of utility rate proposals, to “ensure they are as protective of consumers as possible, encourage good-faith negotiations, and reduce the frequency of disruptive rate increases.”

Advance the “Nuclear Reliability Backbone” initiative directing state agencies to establish a “clear pathway for additional advanced nuclear generation,” with an expanded goal of four gigawatts of new nuclear energy.

Require all utilities to publicly compare CEO salaries to average employee pay, and benchmark executive compensation against customer affordability benchmarks.

When submitting rate increases, utilities will be required to also submit a proposal that keeps [increases in] their operating and capital costs below the rate of inflation.

Strengthen protections for the electric grid, including “enforceable cybersecurity standards beyond traditional information technology to include the operational technology that controls power generation, transmission, and distribution.”

Require the PSC to ensure that customers are not paying for “inappropriate utility spending, including corporate advertising, fines, and certain legal fees.”

Invest an additional $50 million into the EmPower+ program to make energy improvements in an estimated 10,000 additional households.

Create the Empire Power program to provide residential ratepayers who utilize smart thermostats and other similar technologies for $25 off their utility bill per month in the first year.

Regulatory Reform

The Governor will launch a 30-day call for ideas from all stakeholders and constituents, including business, on opportunities to cut red tape and reform regulations.

Deploy new technology to review New York State’s regulations, reports, and policies to identify targets for further staff review that add unnecessary processes, undue burden, or are simply out-of-date.

Taxation

No proposals for new or expanded revenues.

Personal income tax exemption for up to $25,000 of tip income per taxpayer “consistent with federal tax guidance.”

Support legislation to establish a sales tax exemption on the retail sale of electricity used to recharge an electric vehicle by a commercial EV charging station.

Support legislation to ensure that donations made to entities that lose their federal tax-exempt status, but continue to meet New York’s tax exemption standards, will continue to qualify as a charitable deduction for New York income tax purposes.

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

Insurance

Auto

Reforms targeting combating fraud and bad actors to prevent further rise in premiums.

Reinvigorate the State’s Motor Vehicle Theft and Insurance Fraud Prevention Board, focused efforts toward investigating and prosecuting insurance fraud. Including dedicated resources and staff at Department of Financial Services and New York State Police.

Ensure prosecutors can seek criminal penalties against individuals responsible for organizing a staged accident, not just the person behind the wheel.

Increase medical licensure enforcement for fraud, going after medical providers who participate in fraud by signing off on phony medical diagnoses resulting in large payouts.

Agencies will take on action on New York drivers illegally registering their vehicles in other states - operating artificially decreased coverage.

Increase timeframe insurers have to report fraud and reduce barriers to alleging fraud in court. Insurers will have more time to investigate claims and avoid paying fraudulent ones. – Legislation would allow policyholders to collect two percent interest on any payment insurers hold back.

Capping payouts on drivers engaging in unlawful behavior at the time of an accident, specific crimes included would be:

Uninsured motorists, who have violated state financial responsibility laws

Individuals convicted of driving while impaired at the time of the incident

Individuals committing a felony (or fleeing one) at the time of an accident

Amend New York’s laws to limit the non-economic damages a driver can obtain in they are mostly at fault for an accident.

Reform the serious injury threshold by proposing objective and fair medical standards for what qualifies to meet this definition.

Direct the Department of Financial Services to re-examine the Excess Profit Law and current threshold trigger.

Require insurers to notify policyholders about rate changes, explaining why the changes are happening.

Department of Financial Services would set benchmark for level of increase triggering notice and insurers would have to send 20 days prior to renewal.

Require insurance companies offer discounts on insurance rates when drivers opt in to programs that have been shown to reduce the incidents of unsafe and expensive accidents.

Home

Create a check on home insurer profitability- Carriers with more than two consecutive years of outsized profit margins will be required to either lower rates or submit justification of why those high rates should continue.

Require commercial property insurers to report core data metrics annually regarding their multi-family housing businesses, including claims, premiums and rates. Reports would be made public.

Require insurers to offer reductions for upgrades such as smoke detectors, security systems/alarms, auto shutoff devices, and roof improvements. Carriers would be required to offer at least one discount in each category to be determined by Department of Financial Services.

Expand automatic discounts for risk reduction measures to commercial policyholders operating multifamily homes.

Require insurers notify policyholders about rate changes, explain why the changes are occurring - similar to Auto.

Convene stakeholders from affordable housing, real estate, insurance industries to evaluate and propose short and long term solutions to reduce costs and increase affordability.

Procurement

Raise the discretionary thresholds for purchases by the state agencies to $300,000 as they have not been updated since 2006.

Remove provision requiring approval from the Office of State Comptroller for centralized contracts before any purchase order or transaction for over $200,000 -expected to accelerate purchases up to 60 days.

Launch pilot program with state agencies to utilize AI in permitting process and ask agencies to review and identify new tools to streamline procurement processes.

Health

Expand the New York Material Transactions law to require ongoing reporting on the actual impact of closed material transactions along with external reviews for high costs, high impact transactions.

In addition to the return of the Essential Plan to a Basic Health Program, The Department of Health will be directed to negotiate with the federal government to develop affordable coverage options.

Direct Department of Health to identify and target specific classes of high costs drugs for negotiations with manufactures to achieve better discounts for the State.

Prior Authorization Reform:

Require formularies (list of mediations covered by health insurance plans) to be posted publicly and in a standard format.

Ensure prior authorizations for designated chronic conditions remain valid longer.

Expand “continuity of care” for the period insurers must cover out of network treatment for new patients from 60 days for life threatening conditions/late stage pregnancy to 90 days for all health conditions and postpartum period.

Expand the data health insurers must report on their claims process, to include how often claims are subject to prior authorization and how often the requests are denied.

Launch a public education campaign highlighting resources that help consumers and providers navigate insurance.

Direct Department of Health to support providers in effective pain relief with patient safety and evolving standards of care Development of a Pain Management and Drug Control Strategy focused on preventing opioid misuse and treatment, prescription oversight, promoting best practices.

Agriculture

Increase commitment to Agri-Business Child Development Centers.

Proposing Agricultural Resiliency Against Tariffs Program, providing $30 million in direct payments to New York specialty crop growers.

Establish a statewide network of programs and assets focused on developing the industrial hemp pipeline.

Bolster cannabis supply chain by creating certified cannabis business incubator hub network, offering funding for loans to existing businesses, startup capital, business development grant fund and workforce development partnership with SUNY and CUNY.

Introduce the Sun and Soil program to increase options for farmers to benefit from integration of solar energy development on their land while maintaining valuable land assets.

Please contact Kyle Wallach [email protected] for more information

Workforce Development

Develop a nuclear energy workforce program

Governor Hochul will direct Empire State Development (ESD) to launch the Governor's Manufacturing Modernization Program to support the state’s small and mid-size manufacturers. The program will establish a network of Centers across the state, focused on assisting small and mid-size manufacturers in adopting new technologies.

Develop a partnership with SUNY, CUNY, as a CUNY Law Foundation pro bono initiative to provide state support services such as technical assistance in areas such as legal and accounting. This network will serve as a one-stop shop for cannabis businesses with a focus on groups prioritized by the Social and Economic Equity program (SEE) and communities disproportionately impacted (CDI).

New York will provide current teachers the opportunity to complete a Science of Reading SUNY or CUNY microcredential at no cost.

Governor Hochul will direct SED to establish a new program to create an accelerated teacher preparation pathway for career changers and individuals who want to become educators and already hold a bachelor’s degree.

New York will launch new P-TEACH programs, which will allow high school students to get a head start in learning about and preparing for careers in education by taking college courses in relevant subjects for credit.

Governor Hochul will establish a Task Force consisting of higher education, government, and nonprofit stakeholders, coordinated by the Rockefeller Institute of Government, to examine the scope and root causes of teacher shortages across the state, barriers to entry for incoming prospective teachers, and propose policy and regulatory solutions.

Governor Hochul will propose legislation to expand scope of practice for several critical workers to expand access for patients, including allowing certified nursing assistants to administer medication in nursing homes, physician assistants with sufficient training to practice independently, and medical assistants to administer vaccinations.

Economic Development

Building a new Downstate Semiconductor Chip Design Center.

Developing up to four quantum computer hubs statewide.

Governor Hochul will propose a constitutional amendment to return underutilized sites, such as several former correctional facilities, to productive and critically needed uses, such as housing development, while also securing a win for conservation.

New York will launch a downstate-based Semiconductor Chip Design Center. This initiative will focus on leveraging downstate's deep knowledge economy ecosystem to complement the already-robust chip manufacturing infrastructure upstate.

New York will establish up to four quantum hubs across New York that will serve as incubators and foster the development and commercialization of quantum technologies.

Launching Empire AI Beta and Creating the First Independent AI Research Center at SUNY Binghamton.

Governor Hochul will announce a new round of investments for the Downtown Revitalization Initiative and New York Forward fund. These programs will continue to help communities develop downtown neighborhoods into vibrant centers that offer a high quality of life and are magnets for business, job creation, and economic and housing diversity.

Implement an IDAs Enhancing Local Economic Development Project Tracking Proposal by the Governor will overhaul the current system and replacing it with a well-developed, better-equipped analysis tool will enhance transparency, integrity, and efficiency, while also providing oversight data and allowing local authorities to better communicate project outcomes. This includes implanting a plan for the Authorities Budget Office’s (ABO Revenue Integrity Group to recoup an estimated $11M in excess sales tax exemptions not currently policied.

Child Care

Expand universal childcare to 2-year-olds - Governor Hochul will increase funding by $1.7 billion to make a critical downpayment towards ensuring statewide universal access to prekindergarten for four-year-olds (“Pre-K”), supporting the State’s early childhood workforce, and partnering with New York City to launch a nation-first 2-Care program.

Launch an Office of Child Care and Early Education to steer the implementation of high-quality, universal childcare for New York families.

An investment to guarantee increased universal Pre-K seats by increasing the State’s contribution for Pre-K seats—both for the 115,000 existing seats and for new seats that increase access going forward. By creating a uniform statewide Pre-K grant funded at the higher of either $10,000 or the district’s current selected Foundation Aid per pupil.

Continue to invest in the CCAP with a $1.2 billion increased investment.

New York will seek to classify early childhood education as an in-demand occupation for purposes of program eligibility for new federal Workforce Pell grants when available and expand part-time Tuition Assistance Program (TAP) aid for students in approved non-degree teaching and childcare programs.

Higher Education

Tuition Freeze for SUNY/CUNY for a second year.

Expanding the allowed industries for the SUNY/CUNY Reconnect program at community colleges for ages 25-55, including logistics, air traffic control, transportation, and emergency management.

expanding the Masters in Education Teacher Incentive Scholarship, increasing the number of teachers benefiting, and making the program work for early childhood educators.

Governor Hochul will take bold action to support SUNY and CUNY in providing thousands more career-aligned, relevant internship and experiential learning experiences to their students next year through the New York Career Connect initiative. Each system will build on its robust internship and experiential program by integrating career counseling with academic advising, providing clear career maps for every major, and expanding opportunities with local businesses and public service placements.

Please contact Paul Zuber at [email protected] for more information

Housing

Proposing aggravated criminal penalties for landlords who engage in systematic harassment of rent-regulated tenants across multiple buildings, as well as repeat serious offenders under existing anti-harassment laws.
Overhauling J-51(Tax Incentive for major repairs and upgrades in exchange for becoming or staying rent-regulated) incentive that can better support capital repairs for New York City’s rent-stabilized housing stock, including streamlining the process. The idea is to ensure program modernization and facilitate necessary upgrades.
Increase (SCRIE-Senior Citizen Rent Increase Exemption & DRIE- Disability Rent Increase Exemption) the income eligibility limits for the programs from $50,000 to $75,000 in New York City, with the same options being available at local-opt in outside the NYC.
Allow property liens to be utilized to hold landlords accountable who don’t pay utility bills for buildings they own.
Investing an additional $250 Billion in new capital funding accelerate and expand the development of affordable Housing this fiscal year.
Provide additional funding to support the expansion of the MOVE-IN NY program and continued exploration of innovative emerging factory-built and modular construction technologies.
Increase the cap on the number of land banks that can be established to 45.
Create a new revolving loan fund to support manufactured home parks.
Support the next phase of second avenue subway with funding for design and preliminary engineering to advance tunneling across 125th Street.

Transportation

New York City to pilot a program to require the installation of Intelligent Speed Assistance systems for drivers with a documented pattern of flouting speeding laws and putting New Yorkers at risk. Under this initiative, New York City can require that vehicles driven by persistent speeders be equipped with technology that prevents travel more than a few miles per hour above the posted speed limit.
Expand automated speed enforcement to additional roadways and modernize driver education to reinforce safe behavior in active work zones. The state will also deploy new technologies that immediately warn workers when vehicles enter closed areas. Hochul will advance stronger legal protection for frontline highway workers to deter assaults and hold offenders accountable.
Requiring all new or first-time motorcycle license applicants to complete an approved rider training course before becoming licensed.
Advancing the next phase of New York State’s autonomous vehicle (AV) pilot program by allowing for the limited deployment of commercial for-hire autonomous passenger vehicles outside New York City. AV companies interested in piloting services that expand and improve mobility options for communities will be required to submit applications that demonstrate local support for AV deployment and adherence to the highest possible safety standards.

Construction

Launching the “Let Them Build” agenda, a set of common-sense and balanced reforms to SEQRA and executive actions intended to build housing and other critical infrastructure projects faster and cheaper.

Please contact Joseph Alston at [email protected] for further information

Workers’ Compensation

Workers’ Compensation fraud - advance legislation that allows the Workers’ Compensation Board to offer resources that will allow district attorneys to establish dedicated workers’ compensation fraud units.

Access to health care for injured workers - New York requires special authorization for healthcare providers treating workers’ compensation claimants. About 10 percent of eligible providers have gone through this authorization process. Proposal is to eliminate this authorization process, allowing any eligible licensed medical provider in good standing to treat workers’ compensation claimants.

Labor

Wage Theft – NYS labor and criminal law consider wage theft (failure to pay the minimum wage, not paying mandated overtime, stealing tips, misclassifying workers, etc.) as larceny.
To support criminal prosecution of wage theft, the Governor will direct new funding for a grant program administered by the Department of Labor to support district attorneys, particularly in smaller, rural jurisdictions, to take on new criminal wage theft investigations.

Please contact Frank Kerbein [email protected] for more information

Small Business/MWBE

Tackling Outdated and Burdensome Regulations – The Governor is launching a 30-day period to accept suggestions from stakeholders, including businesses of all sizes, and constituents across New York on how to address burdensome and redundant regulations. Additionally, the Governor will be utilizing new technology to analyze reports, policies and regulations to identify burdensome and duplicative policy and regulations or how some processes may be simplified.

Civic and Community Engagement

Establishing the Governor’s Medal to Recognize New Yorkers Who Make Exceptional Civic Contributions – The Governors Medal will be awarded to those who have contributed to their communities, and achievements are in public service, the arts, and innovation.

Please contact Mario Vazquez [email protected] for more information