New York's $268.5B budget bans local ICE detention deals

Governor Kathy Hochul signed New York's FY2027 state budget on May 28, 2026 — 57 days past the April 1 constitutional deadline, making it the latest enacted budget since 2010. The final price tag landed at $268.5 billion, up roughly $14 billion from the prior year's spending plan.

Three sticking points drove the delay. First, legislative Democrats pushed Hochul to ban all ICE cooperation — including informal officer-to-officer contact — while her January proposal only covered formal 287(g) contracts. Second, the legislature agreed to pension reforms that will cost roughly $557 million annually, covering more than 830,000 state and local public employees and lowering their retirement contribution rates. Third, Mayor Zohran Mamdani pressed Albany to help close a $5.4 billion New York City budget deficit, ultimately winning more than $1.5 billion in state aid and a pension-payment deferral.

Congress created section 287(g) of the Immigration and Nationality Act in 1996 — part of the Illegal Immigration Reform and Immigrant Responsibility Act signed by President Clinton. The provision authorizes ICE to delegate authority to state and local police through formal written agreements. But the first 287(g) agreement wasn't signed until 2002, after the September 11 attacks gave the program new urgency and federal funding. By early 2026, ICE had active 287(g) agreements in dozens of jurisdictions nationwide.

The budget's Public Protection and General Government bill prohibits all 287(g) agreements and Intergovernmental Support Agreements — the paid contracts that reimburse county jails for each night they house an ICE detainee. Nassau County Executive Bruce Blakeman had signed a 287(g) agreement that resulted in the county detaining more than 3,200 people for ICE between February 2025 and March 2026. The state budget law now requires Nassau — and every other county — to end those contracts.

The budget also enacts the Sensitive Location Protection Act, which bars ICE agents from entering schools, hospitals, childcare centers, churches, and polling places without a judicial warrant. ICE agents can't wear masks during enforcement operations in New York. And the budget creates a civil lawsuit mechanism that lets New Yorkers sue federal immigration agents over constitutional violations, with claims retroactive to January 2025. The state attorney general receives and investigates those complaints.

Immigrant advocacy groups welcomed the package but said it stopped short of what they sought. The New York Immigration Coalition noted that the final language doesn't ban all informal cooperation between local officers and ICE — a cop could still call ICE off the record, a gap that the full New York for All Act would have closed. Executive Director Murad Awawdeh called the protections a floor, not a ceiling.

The has two Supreme Court anchors. The first came in New York v. United States (1992), when the Court struck down a federal law requiring state legislatures to take ownership of nuclear waste — establishing that Congress can't command state lawmakers to enact or administer federal programs. The second came five years later in Printz v. United States (1997), when Justice Antonin Scalia, writing for a 5-4 majority, struck down the Brady Handgun Violence Prevention Act's requirement that county sheriffs run background checks on gun buyers. Scalia wrote: 'The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States' officers, or those of their political subdivisions, to administer or enforce a federal regulatory program.'

Applied to immigration, courts have consistently held that states and localities can refuse to honor ICE detainer requests, decline to share information with federal agents, and prohibit their officers from entering 287(g) agreements — all without violating federal law. New York's budget package relies on exactly this framework: the state isn't obstructing federal enforcement, it's withdrawing its own jails, officers, and cooperation from a federal program.

New York's 2026 budget provisions sit at the end of a 37-year history of state and local resistance to federal immigration enforcement. Mayor Ed Koch issued Executive Order 124 on August 7, 1989, barring city employees from sharing immigration status information with federal agents — the first formal in New York City. Mayors David Dinkins and Rudy Giuliani each reissued the order. New York City's first sanctuary law — as opposed to an executive order — passed in 2011. Mayor Bill de Blasio expanded the protections in 2014, restricting when the NYPD and city jails could cooperate with ICE. In January 2017, New York Attorney General Eric Schneiderman issued statewide guidance telling all police departments they had no legal obligation to honor ICE civil detainer requests without a judicial warrant.

New York wasn't alone in this trajectory. California Governor Jerry Brown signed the TRUST Act in 2013, prohibiting local jails from holding people solely on ICE detainers unless they'd been convicted of serious crimes — a direct response to the federal Secure Communities program that had swept up thousands of people with no criminal records. The 2026 New York budget is the most comprehensive codification of these policies yet, giving them statutory force that executive orders and attorney general guidance lack.

The prior test case for state-federal immigration conflict came in 2010, when Arizona Governor Jan Brewer signed SB 1070, which made it a state crime to be in Arizona without immigration documentation and required police to check immigration status during stops. The U.S. Justice Department sued Arizona, and in Arizona v. United States (2012), the Supreme Court struck down three of four provisions on preemption grounds — ruling that states can't create immigration crimes that go beyond what federal law authorizes, because immigration is a federal domain.

The Arizona ruling cut both ways. It confirmed federal preemption when states try to do more immigration enforcement than federal law allows. But it reinforced the anti-commandeering argument when states try to do less — courts have consistently applied Printz to hold that states can't be forced to help enforce federal immigration law even if they want to. New York's budget relies on the anti-commandeering half of that precedent.

Tom Homan, Trump's border czar, rejected the constitutional framing and responded with direct threats. He said if New York locked ICE out of local jails, the agency would 'simply fly' detainees out of state for detention. He also warned that jurisdictions refusing to cooperate with ICE would face more federal agents on the ground conducting collateral arrests — arrests of immigrants who weren't the original enforcement targets but happen to be present during an operation.

Hochul replied directly: 'This is just a threat to intimidate states like New York into bowing into submission. And that is something we'll never do.' She told Homan that any attempt to cut state funding would be challenged in court, and courts had already sided against the Trump administration in nearly every funding-coercion case through mid-2026.

The budget's income tax provisions extend to about 600,000 tipped workers across New York. Starting in tax year 2026, workers can deduct up to $25,000 in tip income from their state taxable income — a measure Hochul proposed in January as part of her affordability agenda. For a worker earning $25,000 in tips at an effective state rate of 6%, the deduction saves roughly $1,500. New York City stands to lose an estimated $239 million in municipal tax revenue annually as a result.

The pied-a-terre tax targets luxury second homes in New York City owned by people whose primary residence is outside the five boroughs. Single-family homes with a city-assessed market value above $5 million face an annual surcharge ranging from 0.8% (for homes between $5M and $15M) to 1.3% (for homes above $25M). Condominiums and co-ops are subject to higher rates starting at assessed values above $1 million. About 10,000 properties are expected to owe the tax, and it's projected to generate roughly $500 million a year for New York City.

Six upstate cities facing structural deficits driven by rising costs and shrinking federal support won $135 million in targeted one-time aid. Yonkers gets $40 million, Buffalo gets $25 million, and Albany, Rochester, and Syracuse each receive $20 million, with $10 million going to Mount Vernon. All six cities carry large shares of tax-exempt property — universities, hospitals, and government buildings — that rely on city services without contributing to the property tax base.

The aid comes on top of $150 million in Temporary Municipal Assistance available to municipalities statewide. City officials from Buffalo and Rochester had traveled to Albany repeatedly during budget negotiations, warning that without state help, they'd face layoffs of police and firefighters and cuts to trash collection and snow removal.

New York is home to roughly 725,000 undocumented immigrants, according to Migration Policy Institute estimates based on pooled 2019-23 American Community Survey data. The immigrant population is concentrated in New York City — which accounts for more than 3 million of the state's roughly 4.5 million foreign-born residents — but undocumented New Yorkers also live in large numbers on Long Island, in Westchester County, and in the Hudson Valley. Nassau County, whose 287(g) agreement the budget terminates, sits in the middle of one of the state's densest immigrant communities.

For these residents, the stakes of the 2026 budget provisions are concrete: an ICE detainer request to a county jail without a formal agreement can still arrive, but without the jail's legal obligation to hold the person, the detainee is more likely to be released before federal agents can take custody.

The budget's $268.5 billion total represents a roughly $14 billion increase over FY2026. Other major investments include $39 billion in school aid, $4.5 billion for childcare and pre-K programs — enough to support nearly 100,000 additional children — and $1 billion in one-time energy rebate checks through the POWER program. The POWER checks send $200 to joint filers earning under $150,000 and $150 to those earning between $150,000 and $300,000.

The New York State Senate passed the final budget bills by a party-line vote, with Republicans opposing the anti-ICE provisions and Democrats defending them as a constitutional exercise of state authority. The Assembly followed suit before Hochul signed the three bills into law.