Gov. Hochul announces $254B budget to ban phone use in school, send out rebate checks

New York state officials announced a tentative agreement Monday on a $254 billion budget that will prohibit most kids from using cellphones during the school day, send rebate checks to middle-class families, loosen evidence-sharing expectations for prosecutors in criminal cases and create a new charge for wearing a mask while committing a crime.

Gov. Kathy Hochul announced what she called a “general agreement” on the new spending plan nearly a month after its April 1 due date, though she acknowledged there are some specifics left to be worked out before lawmakers begin putting it to a vote later this week.

“We worked through some really challenging issues,” Hochul said. “We refused to be drawn into the toxic, divisive politics of the moment. And we never lost sight of the people that we were sent here to serve, and we never strayed away from the issues they cared the most about.”

Hochul said the budget would increase public safety and improve affordability in New York, which she’s called her biggest priorities ahead of her 2026 reelection campaign.

Lawmakers said the budget was late because the Democratic governor insisted on including several policy proposals — including the new masking crime.

But the governor’s proposals weren’t adopted wholesale.

Democrats in the Legislature pared back Hochul’s initiatives to change laws around discovery — which is the process of sharing evidence before a criminal trial — and broadening the standard by which people can be involuntarily committed to mental health treatment.

Other policy items largely mimicked Hochul’s initial plan. That includes the rules restricting students from using their smartphones during the school day, which will apply from opening bell to closing bell — as Hochul insisted — but will include exceptions for students who act as caregivers to others.

The spending plan grew an estimated $2 billion from Hochul’s initial $252 billion proposal.

Republicans and outside fiscal watchdogs said the budget doesn’t do enough to constrain spending – especially in light of possible federal funding cuts and economic uncertainty stemming from President Donald Trump’s tariffs.

"The month-late State general budget agreement fails to address the imminent threat facing New York: looming federal budget cuts,” said Andrew Rein, president of the watchdog Citizens Budget Commission. “Instead of shoring up the State’s fiscal foundation, lawmakers are dramatically increasing spending the State cannot afford in the long run.”

Hochul said her aides would finalize legislation in the coming days.

Here are the major items in the agreed-upon budget, based on descriptions by officials, legislators and other people briefed on the deal:

Schoolchildren will be prohibited from using their smartphones and similar mobile devices “from bell to bell” during the school day under an agreement reached in March. Individual public school districts will be directed to formulate policies on how devices are stored during the day beginning in September, and the state will offer some funding to develop their plans.

The governor said the cell phone policy would help improve teenage mental health.

“We protected our kids before from cigarettes, alcohol and drunk driving, and now we’re protecting them from addictive technology designed to hijack their attention,” Hochul said. 

The governor’s proposal to spend $3 billion on $500 rebate checks to middle-class families was pared back amid resistance from lawmakers who said refunds should be more precisely targeted.

Instead, Hochul said Monday that eligible families will receive $400 checks, while eligible individuals will receive $200. 

State Sen. Pat Fahy, a Democrat from Albany, said she was glad Hochul’s plan was reduced.

“We should not be writing out checks to the tune of $3 billion when we are … our state programs eroded because of what's going on with Donald Trump,” she said.

The budget plan, once approved, will raise billions to improve the Metropolitan Transportation Authority’s infrastructure by increasing payroll taxes on large employers, while halving the same tax for smaller employers. 

Taxes will be levied on major employers across the MTA’s 12-county service area, Hochul said. In the early stages of negotiations, Hochul and lawmakers had discussed only changing the tax in New York City — similar to a previous MTA bailout two years ago. 

The money will be used to help fill a gap in the authority’s proposed $65.4 billion capital plan. Hochul described it as the lifeblood of the city and its surrounding region.

The state will divert $1.2 billion it had flagged for the redevelopment of Penn Station after the Trump administration announced it was taking control of the project earlier this month. Instead, Hochul said the money will go toward the MTA capital plan.

The state and New York City will also contribute $3 billion each toward the plan, while the MTA will be required to find $3 billion worth of savings, Hochul said.

One of the last sticking points in budget talks was Hochul’s late push to restrict wearing masks in public, which came after images of mask-wearing protesters demonstrating against Israel’s war in Gaza on a subway train went viral last year.

Hochul initially wanted to penalize people who wear masks while harassing others, but legislators raised concern that enforcing such a law would be inherently subjective. 

After weeks of back-and-forth, the governor and lawmakers struck a compromise. 

The governor and legislative leaders agreed to create a new criminal charge that would apply if someone intentionally conceals their identity with a mask or face covering while committing a separate felony or high-level misdemeanor.

“There needs to have been a determination that the mask was being worn for the exclusive purpose of concealing one's identity,” said Sen. James Skoufis, an Orange County Democrat who pushed for mask restrictions. 

The final budget deal includes a compromise on discovery largely brokered by lawmakers and district attorneys. The budget includes language that would set a “prejudicial” standard for a judge to dismiss a case if evidence was missing and not shared with defense attorneys.

Lawmakers amended the 2019 discovery statute to specify that only material “related to the charges of a particular case” must be disclosed to defense lawyers.

Hochul, who backed top New York City prosecutors, said that the state desperately needed to “streamline” how and when evidence is shared between prosecutors and defense attorneys before a criminal trial begins. Public defenders and progressive lawmakers warned that the governor’s original proposal would have rolled back reforms that they say ensured fairer trials for defendants.

Lawmakers agreed to broaden the standard by which people can be involuntarily committed to mental health treatment and insisted that hospitals take more steps before discharging those patients.

Clinicians would be able to involuntarily commit someone if they demonstrate an inability to provide for their basic needs. Civil rights lawyers warned that the new standard could be used to unfairly target homeless people. State mental health officials said the new language was taken from a court decision.

“This will allow us to connect people in the throes of mental illness with the life-saving care they need and deserve,” Hochul said.