State and Federal Update: May 5, 2025

State Update

• On Monday, April 28, Governor Kathy Hochul announced that she had reached an agreement with leaders in the state legislature regarding New York’s state budget for Fiscal Year 2026. While final details have yet to be released, the budget is expected to include approximately $252 billion in spending, an increase of 3.6 percent over revised Fiscal Year 2025 expenditures. 
  
  
• NYATEP will have detailed analysis when numbers are available, but notable highlights from a workforce perspective—also considering supportive services that enable people to seek training and work, and economic development investments with employment ramifications—include the following: 
• An increase to the Child Tax Credit for children up to age 16 that the Governor’s Office claims will effectively double the credit for the average eligible family
• An investment of $47 million to make community college free for adult students pursuing two-year degrees in selected high-demand industries
• $1 billion for climate priorities including assistance to electrify homes, thermal energy networks, and infrastructure to charge electric vehicles
• Fully funding the Metropolitan Transit Authority’s proposed five-year capital plan for $68.4 billion 
  
  
• The budget will be completed more than a month after the state’s self-imposed April 1 deadline. It was held up as the governor and legislative leaders battled over a number of policy issues not directly related to spending. Ultimately they resolved these issues, with a number of new measures enacted as part of the agreement: 
• An adjustment to criminal discovery laws to reduce the number of cases thrown out on technicalities
• Creating a new misdemeanor for individuals who wear masks to conceal their identities while committing a more serious crime
• A “bell to bell” ban of cell phones in schools
• Strengthening involuntary commitment of individuals with severe mental illness who are unable to meet their own basic needs
  
  
• Finally, the governor and legislators are poised to revisit the budget to make additional changes if necessary, as a result of future severe federal cuts. The state usually receives approximately $93 billion from the federal government each year, more than half of which comes through the Medicaid program. The governor noted that the state already has absorbed more than $1.3 billion in cuts. 

Federal Update

• As Congress begins to translate the budget resolution it passed last month into the 12 distinct bills that will set spending for the next fiscal year, the Trump administration released its own “skinny budget” for Fiscal Year 2026. It calls for a 23 percent cut to overall non-defense discretionary spending, with particularly large reductions to education, housing, scientific research, and public health. These cuts would help pay for significant increases to homeland security as well as an extension of tax cuts passed in 2017 that largely benefitted well-off families. 
  
  
• On April 23, the Trump White House released an Executive Order (EO) on workforce development, “Preparing Americans For High-Paying Skilled Trade Jobs of the Future.”  As with any executive order, this should be understood as setting a broad direction for policy, with further detail to follow as the administration refines its thinking and Congress weighs in. Key provisions to the EO include the following: 
• The stated purpose of the measure is to “fully equip the American worker to produce world-class products and implement world-leading technologies.” To this end, the administration pledges to “consolidate and streamline fragmented workforce development programs.” 
• The EO charges the Secretaries of Education, Labor and Commerce to review all federal workforce programs and report within 90 days on strategies to:
• Integrate systems and realign resources to meet labor market needs 
• Reform or eliminate ineffective programs
• Promote innovation and upskilling 
• Explore alternatives to four-year college degrees
• Improve performance measurement and data reliability across all sectors 
• It also calls for expansion of registered apprenticeships, including a plan within 120 days “to reach and surpass 1 million new active apprentices,” focused on new industries and occupations with emphasis on high-growth and emerging sectors. For context, as of 2024, about 680,000 apprentices were active in the U.S., more than double the 318,000 from ten years earlier.
  
  
• Also on April 23, the administration released an Executive Order on “Advancing Artificial Intelligence Education for American Youth.” While primarily focused on education, this EO called for the following actions related to workforce development: 
• The U.S. Department of Labor will support development of Registered Apprenticeship programs in AI-related occupations
• The agency will issue guidance to encourage states and grantees to use funding under the Workforce Innovation and Opportunity Act to develop AI skills and support related work-based learning (WBL) opportunities
• AI skills training and WBL will be established as a grant priority in all youth-focused discretionary grant programs
  
  

NYATEP will continue to monitor events as they unfold and share details to our members as soon as possible. If you have an immediate questions or concerns, please contact David Fischer, Interim Executive Director, at [email protected].