Governor Kathy Hochul and Assembly Speaker Carl Heastie reached a tentative agreement on a $245 billion FY27 budget Sunday night, ending a 23-day delay past the April 1 statutory deadline. The deal still requires a vote by both chambers, expected Thursday and Friday.

The framework, confirmed by three sources in the governor’s office and one in the Senate Majority Leader’s office, contains four headline items the administration plans to spend the next ten days promoting.

$1.4 billion housing voucher expansion

The largest single new program in the deal is a $1.4 billion expansion of the City Family Homelessness and Eviction Prevention Supplement (CityFHEPS), structured as a three-year ramp. Year one expands eligibility to households earning up to 80 percent of Area Median Income — up from the current 50 percent threshold — and increases the maximum subsidy by 18 percent.

“This is the largest single-year housing-voucher expansion the state has done since 2008,” Senate Housing Committee chair Brian Kavanagh said Sunday. The program will move 6,800 households into permanent housing in year one, per administration projections.

MTA payroll mobility tax up 0.25%

The deal raises the MTA payroll mobility tax in the 12-county MTA region by 0.25 percentage points, generating an estimated $678 million annually for the agency’s capital plan. The tax, currently 0.6 percent on most employers in the city, will rise to 0.85 percent effective January 1, 2027. The structure preserves the small-business exemption at $1.75 million in payroll.

The MTA had requested a 0.5 percentage point increase. The half-step compromise leaves the agency’s capital program approximately $4 billion short of its requested $58 billion five-year ask. “It buys us 18 months, not the full plan,” MTA Chair Janno Lieber said in a statement.

Medicaid managed-care reform

The deal restructures the state’s Medicaid managed long-term care program, consolidating the existing 17 plans into eight statewide vehicles by July 2027. Long-term-care provider groups are calling the change a defeat. “This is going to mean closures across upstate,” LeadingAge New York president James Clyne said Monday.

What’s not in the deal

Three items the WFP and progressive caucus pushed for did not survive: the $24 minimum-wage indexing proposal, the millionaire’s tax extension to capital gains, and the prison closure moratorium reversal. Discovery reform changes that prosecutors and Mayor Adams pushed for are also out.

Both chambers begin debate Thursday. Heastie expects passage Friday afternoon.