By Hinman Straub
On Thursday, May 28, lawmakers in Albany completed voting on the 10 bills that make up the State Fiscal Year 2027 Enacted Budget. At more than $268.5 billion, the budget is the largest in state history and marks the latest budget passage in 16 years. Negotiations were significantly delayed following the Governor’s Executive Budget proposal in January, as Lawmakers and the Executive worked through major disagreements over tax policy, immigration enforcement, greenhouse gas reduction timelines, and proposals intended to ease rising automobile insurance costs.
For NEAFA members and stakeholders, the final agreement includes several provisions worth watching closely. The most relevant items fall into six major areas: insurance reform, litigation, energy affordability and utility regulation, tax policy, environmental policy, immigration-related protections, drone restrictions, and procurement.
Key Funding Additions and Restorations
The final budget included critical new investments in Cornell CALS. In the coming state fiscal year they will receive $2.5 million in capital as well as $3.4 million in operational funding. Cornell University Pro-Dairy Program was funded at $1.551million, and increase of $213,000 over the Executive, a full restoration of the Executive cut and an increase of $88,000 over last year’s Executive budget. The proposed $30 million in tariff relief funds for famers impacted by federal tariff’s was adopted. Farmnet funding was restored to $1.5 million, $100,000 over the executive and flat funded to last year. The Occupational Health Clinics Network (OHCN) was funded at $14.56 million an increase of $5 million.
Insurance Reforms Aim to Increase Transparency and Address Auto Premiums
A central focus of the SFY 2027 budget is automobile insurance affordability and transparency. Under the final agreement, insurers must notify policyholders before renewal when a premium increase will exceed 10 percent of the previous policy. The notice must appear on the accompanying premium bill and explain the primary rating factors behind the increase, such as claims history, policy changes, changes in address, anticipated losses in a rating territory, repair costs, claims processing costs, or medical costs. If a policyholder receives a premium reduction because of SFY 2027 reforms, insurers must also disclose that the reduction is tied to those reforms.
The budget also extends the Excess Profit Law for motor vehicle insurance rates for three years and incorporates language similar to Florida’s auto insurance excess profits framework. The updated provisions define excess profit as an underwriting gain over the three most recent calendar years that exceeds anticipated underwriting profit plus five percent of earned premiums. When excess profits occur, insurers must provide credits to policyholders and report those credits to the Department of Financial Services.
Budget Updates No-Fault and Comparative Negligence Rules
The enacted budget makes several changes intended to reduce unnecessary litigation involving automobile accidents. It amends New York’s No-Fault Insurance Law and the Civil Practice Law and Rules, including changes to the definition of “serious injury.” Specifically, the final budget removes the 90/180-day provision for injuries or impairments of a non-permanent nature, which allowed injury victims to sue for "pain and suffering" if a non-permanent impairment prevented them from doing their usual activities for at least 90 of the first 180 days post-accident.
The final budget also caps non-economic loss payments at $100,000 in certain circumstances. The cap applies to the injured person rather than the covered person at fault and is limited by new comparative negligence rules. It also applies in cases involving uninsured vehicles, impaired driving convictions, or operation of a vehicle during the commission of a felony or immediate flight from one.
In addition, New York will move from a pure comparative negligence standard to a modified comparative negligence standard. Under the new rule, an injured driver may seek additional compensation only if that driver is found to be less than 50 percent at fault. Non-economic damages, including pain and suffering, are no longer available to individuals found to be more than 50 percent at fault. The budget does not repeal the Motor Vehicle Accident exception from the Joint and Several Liability Law.
Tax Changes Extend Farm Credits and Temporary Business Tax Rates
The final budget extends the refundability of the Investment Tax Credit for farmers from January 1, 2028, to January 1, 2033. Eligible farmers may continue to elect to receive unused investment tax credits as a refund rather than carrying them forward. The extension applies under both the corporate franchise tax and the personal income tax.
The final budget also creates a uniform definition of “eligible farmer” across several farm-related tax credits. The standardized definition applies to the Agricultural Property Tax Credit and is cross-referenced for the Farm Workforce Retention Credit, Farm Employer Overtime Credit, and Credit for Farm Donations to Food Pantries.
For businesses, the final agreement extends the temporary Article 9-A tax rates for three years. The 7.25 percent business income tax rate for taxpayers with a business income base over $5 million will continue through tax year 2029, as will the 0.1875 percent capital base tax rate. The Farm Donation Tax Credit is also enhanced. The credit for food donations made by farmers increases from 25 percent to 50 percent of the market value of the donated food, and the maximum allowable credit increases from $5,000 to $20,000.
Environmental Updates Revise Climate Law Timelines and SEQRA Review
The final budget includes amendments to the Climate Leadership and Community Protection Act of 2019. The measure extends the timeline for greenhouse gas reduction regulations until 2028, establishes a soft target of reducing emissions 40 percent below 1990 levels by 2040, and maintains the hard deadline of an 85 percent reduction by 2050. The 2040 target must be achieved to the maximum extent feasible and cost-effective.
The amendments also direct the Department of Environmental Conservation to consider several factors when developing regulations, including the feasibility and affordability of cap-and-invest, the impact on energy costs, cost-containment measures, economic growth and competitiveness, job creation, public health, environmental benefits, equitable use of revenue, available funding, and the development of low- and zero-emission technologies.
One of the most significant changes is the shift in greenhouse gas emissions accounting from a 20-year standard to a 100-year standard. Under the 100-year accounting method, the State would be considered to have reduced emissions by 24 percent from 1990 levels, compared with 15 percent under the prior 20-year standard.
Additional climate-related changes include excluding emissions from biogenic sources from certain calculations, removing extraction and transmission emissions from fossil fuels imported into the state, requiring the Climate Action Council to update the Scoping Plan in 2028 and every six years thereafter, requiring separate reporting of carbon dioxide emissions from biogenic sources, and increasing programmatic benefits for disadvantaged communities by five percent.
The budget also includes State Environmental Quality Review Act language intended to help certain sustainable housing projects move more quickly through review when they are located on previously disturbed sites. A site may qualify if it is not currently used for agriculture and has not been used for agricultural purposes either in the immediately preceding two years or during three of the last five years.
Additional Measures Address Immigration Enforcement and Procurement
The final budget creates the Sensitive Location Protection Act, which allows certain privately owned or operated entities to adopt policies denying civil immigration enforcement access to non-public areas of sensitive locations unless a valid judicial warrant or court order is presented. Sensitive locations include childcare programs, health care facilities, houses of worship, residences, non-public schools, 853 and 4201 schools, institutions of higher education, nursery schools, summer camps, senior centers, parks, playgrounds, athletic fields, recreation centers, and polling places.
The Act authorizes the Attorney General to enforce its provisions through the courts. The Attorney General, the Office of Immigrant Trust, an individual, or the owner or operator of a sensitive location may seek relief for violations, including injunctions to stop unauthorized civil immigration enforcement actions or court declarations regarding the legality of access requests or policies.
The final budget establishes the Immigrant Trust Office within the Department of Law, led by an appointee of the Attorney General. The office is charged with creating a process to receive public complaints and investigate intentional violations of state law by state and local entities and their officers, employees, or contractors, including violations involving the denial of a free public education.
On procurement, the final budget extends the existing procurement lobbying framework and its advisory council for two additional years, through June 30, 2028.
The Procurement Stewardship Act is extended for five years, through June 30, 2031. The law governs how state contracts are competitively bid and made available for use by local governments and school districts. It provides that commodity contracts are awarded based on lowest price, service contracts are awarded based on best value, and all contract awards must be made to responsible and responsive bidders.
Overall, the FY 2027 Enacted Budget makes substantial changes across several policy areas that will affect insurers, utilities, agricultural producers, public institutions, and local governments. NEAFA members should continue to monitor agency implementation, forthcoming PSC and DFS actions, and any guidance issued as these provisions take effect.