Proposed budget deal in New York could prolong state’s reliance on expensive and polluting fossil fuels

ALBANY, N.Y. — The Governor and New York State Legislature appear to have reached a tentative agreement on the state’s 2026 budget. 

“Governor Hochul and the New York State Legislature appear to be on the precipice of passing a state budget with sweeping rollbacks to New York’s landmark climate law which will result in more pollution in our communities and delayed investments in clean, affordable energy.” said Kate Courtin, Senior Manager, State Climate Policy & Strategy at Environmental Defense Fund. “As New Yorkers are reeling from soaring utility bills and gas prices – pushed higher by the volatile fossil fuel market – these delays are the opposite of what New Yorkers need. The final budget must commit New York to real, near-term progress to cut pollution and costs. Other states are leaning into clean energy to deliver on both, and New Yorkers deserve the same.”  

Governor Hochul’s announcement of a budget deal and recent reporting indicates consequential rollbacks to the state’s climate law. While the reported budget agreement includes important near-term clean energy investments, a cap-and-invest program is designed to deliver these kinds of investments year after year and should already be delivering $3 billion annually in cost-saving clean energy investments and utility bill rebates. These investments should not be one-time budget measures: New Yorkers need and deserve a sustained, durable approach to affordability and clean energy.  

To ensure near-term progress on reducing pollution and scaling clean, affordable energy, a final agreement must: 

• Require cap-and-invest regulations in 2027;
• Maintain enforceable near-term pollution reduction requirements;
• Invest $3 billion a year in the Sustainable Future Fund until a cap-and-invest program is generating revenue. 

Background 

• Underpinning the Administration’s push for changes to the law was a February memo that presented an unrealistic picture of a policy scenario that had never been on the table and ignored design options that protect families from cost impacts.
• Modeling from Greenline Insights of New York’s previously proposed program found that it would generate $6.9 billion in cumulative net savings for low- to moderate-income households, roughly $1,060 per household, all while supporting the creation of 300,000 good-paying jobs and $47.5 billion in statewide economic growth.
• Leaders in other states and around the world are doubling down on strategies to scale clean energy and cut climate pollution to help lower energy costs. California is extending its cap-and-invest program through 2045, Virginia just rejoined RGGI, and Washington voters recently defended their state’s program by a 24-point margin.