Gov. Kathy Hochul: NYS can handle Trump cuts for now — but 2026 could be different

ALBANY — With the federal government dealing New York a big financial hit, Lt. Gov. Antonio Delgado and some activist groups are calling for a special session of the State Legislature to deal with the situation.

Don’t hold your breath.

Gov. Kathy Hochul, as well as leading State Senate and Assembly leaders, said current law gives her administration enough fiscal flexibility to deal with federal cuts in the current fiscal year.

Next year could be a different story, no doubt. But for now, even while decrying the federal hit on New York, leaders said there is no need to rush back to Albany.

Sen. Liz Krueger (D-Manhattan), chairwoman of the powerful Senate Finance Committee, noted the state budget approved last spring specifically gave the Hochul administration authority to make up to $2 billion in spending adjustments, by tapping into reserve funds, once a federal budget was approved. President Donald Trump’s federal budget, approved in July by a Republican-led Congress, cut disbursements to New York by a projected $750 million in the current fiscal year.

"Obviously, if the governor calls us back to Albany, we’ll go back. But my gut tells me her budget people will be able to deal with the $750 million adjustment this year," Krueger said. After all, $750 million is a very small percentage of what is a roughly $254 billion state budget.

She added: "It’s really the out years where we’re in trouble."

Delayed impact

Krueger referred to projections that show federal cuts to New York would reach $3 billion in 2026 and likely even higher in succeeding years. Many lawmakers, media reports and analysts have noted that the bulk of spending cuts in Trump’s budget fall after the 2026 midterm elections, when control of Congress is up for grabs.

Some of the most impacted state programs include Medicaid, which provides health insurance for the poor and partially disabled, and the Supplemental Nutritional Assistance Program, the program once known as food stamps, for the needy.

That’s prodded Delgado, some of the State Legislature’s most liberal members and advocacy groups to hold rallies calling for a special session this fall. They say the state needs to "backfill" for federal cuts — essentially increase state spending to cover federal shortfalls.

"The GOP budget attacks New Yorkers — cutting health care, fueling immigration raids and rewarding billionaires. We must act now to protect our communities and lead," Delgado wrote in a social media post last week. "We can’t wait until January."

But Delgado’s push comes with another political context — he’s announced he wants to challenge Hochul in a Democratic primary in 2026. He says the governor hasn’t been "bold" enough in challenging Trump and Republicans. But he’s facing an uphill battle, given Hochul’s huge fundraising advantage, analysts say, among other factors.

Broader agenda

Other progressive Democrats have said a special session should not just address financial cuts but also be used to pass legislation to raise taxes on the wealthy and end New York’s cooperation with federal deportation efforts.

"We are in the midst of an economic crisis — one that is devastatingly worsened by the Trump administration’s reckless leadership," said Assemb. Jessica Gonzalez-Rojas (D-Jackson Heights). "But this is not inevitable — we need a special session now. New Yorkers are counting on us to fight for them, and we must rise to the moment."

Asked Tuesday about Delgado’s push, Hochul gave a dismissive backhand wave and didn’t say a peep about the guy she picked as a running mate in 2022. Instead, she shifted back to federal cuts.

"This is an ongoing situation. We were not expecting to deal with a $750 million shortfall this year and additional $3 billion next year," Hochul said. "This year, I believe we’ll be able to find a path forward to deal with the numbers. But next year’s going to be tough."

The State Legislature isn’t slated to return to Albany until January to begin its 2026 session. The chief order of business will be to craft a state budget by April 1, the beginning of New York’s 2026-27 fiscal year. Unless something else big happens, most are expecting to stick to that schedule.

"That seems to be the case," said Assemb. Charles Lavine (D-Glen Cove), a 21-year veteran in the Assembly. "We gave the governor the leeway to deal with our current fiscal year. But we are all aware that next year's budget is going to be the most unique challenge, for me anyway, of any of the budgets we’ve been involved in."

By Yancey Roy

yancey.roy@newsday.com@yanceyroy