ALBANY — New York leaders will close a smaller budget gap next year because of higher tax receipts, but that won’t absolve the expected tussle over hotly disputed spending decisions — like more resources for migrants. 

The state’s financial plan is due for an update now halfway through the state’s $237 billion fiscal year. The state Budget Division will release new figures by Wednesday that state Budget Director Blake Washington said will be good news for the state: Next year’s $2.3 billion gap will be smaller than expected.

“This part of the year is essentially our bread and butter,” Washington told reporters on Friday in Albany.

Tax receipts are greater than expected, the budget director said — boosted by a strong stock market and higher profits on Wall Street and growing employment numbers.

The budget director was tight-lipped about how much before the report’s release this week. But there will still be a gap to close, and the Budget Division asked state agencies to keep spending flat again next year.

“We ask our agencies to do exactly what our families are doing,” Washington said. “Our families aren't spending more on a day-to-day basis unless they absolutely need to.”

The updated financial plan will give state officials a better picture about what’s in store for next year’s budget.

In the coming weeks, Gov. Kathy Hochul, legislative leaders and the state Comptroller's Office will meet and evaluate state agency performance including progress on capital projects and implementing the governor's and Legislature's initiatives.

The discussions will help shape Hochul’s 2026 executive budget proposal.

“We are … understanding we can do more with less sometimes, but at the same time, we understand that we have the capacity to do more with what we have,” Secretary of State Walter Mosley said Friday.

Leaders from the Department of State and state Office of Parks, Recreation & Historic Preservation gave spending presentations Friday to the Legislature’s top budget aides.

Hochul’s administration remains against raising income taxes to close the out-year budget gaps, including on the wealthy.

The state spent $4.3 billion in the last two years for services for about 200,000 migrants who have arrived in the state in that time. Washington said he does not expect an increase in funding for resources for migrants in the state’s next spending plan as the number of new arrivals has slowed.

The Department of State oversees New York’s Office for New Americans, which helps connect immigrants and newcomers to resources after they arrive in the state.

Mosley said the state will need to commit more funding for migrant resources depending on trends at the northern and southern borders.

“If the trend continues to increase, we’ll continue to need more resources,” Mosley told Spectrum News 1. “We don’t want those realities not to be considered because the migrant issue is subsiding.”

The newcomers need legal services, housing and mental health support, job training and other programs, the secretary of state added.

“Many come with no access to family,” he said. “We have to fill in that blank. We have to make sure that they don’t fall through the cracks because, ultimately, they are new Americans, they are new in New York and they are New Yorkers. …The opportunity is only as good as what we’re able to provide New Yorkers.”

But where it lands will be a fight next session.

Patrick Orecki, director of state studies with the Citizens Budget Commission, says even with higher tax receipts the state continues to have structural issues to balance the next spending plan. The nonpartizan fiscal watchdog wants the state to continue to boost its reserve, or “rainy day” fund, which has over $21 billion.

“While you have this glut of cash right now, it’s a great opportunity to build those reserves even a little bit further,” Orecki said.

And with congestion pricing, Medicaid reforms and school funding changes hanging over the Legislature, state leaders will have difficult decisions to make.

“Whatever the receipt revisions are, we are good stewards of that and we don't make choices that jeopardize our ability to thrive into the future,” Washington said.