Universal Child Care in NYC One Step Closer to Reality As It Gets Boost from NY State

NY State Governor Kathy Hochul and NYC Mayor Zohran Mamdani held a press conference on Thursday, January 8, 2026, where the Governor unveiled a plan to continue the expansion of universal child care in New York City and New York State.

Great news.  But how is this possible?

Despite the harmful health care cuts enacted by the Republicans last summer and slow employment growth, the State Division of the Budget and the State Legislature predicted higher tax revenue and lower deficits in both the current year and the next budget from the booming stock market and good times for the financial industry. (See NYS DOB Mid-Year Update, pp. 7-14 and NY State Quick Start Report).  There are out-year problems related to Federal budget cuts and a recession is always a risk, but right now New York has the resources to sustain the expansion. And so, the budget for NY State, due on February 1^st, is in much better shape than anticipated.

NYC is ready for this big step because it already has a very deep level of universal preschool education

Universal child care is implementable in NYC because it is already a long way there. The rest of the State is further behind than the City. (I’ll address that later in this article.)

Last spring’s education budget in NYC showed this far-reaching level of preschool education, not including day care vouchers:

This NYC Department of Education budget document shows almost 40,000 3 and 4 years in full-day prek and 3K at Department of Education facilities, nearly 67,000 children in prek and 3-k at non-DOE facilities, 40,000 children in preschool special education, and 10,000 in Early Learn, a total of 157,000 children.

In addition, the NYC Administration for Children’s Services funds 74,000 child care vouchers (for children up to age 13) through a combination of Federal, State, and City funds. The State of New York added $350 million in the 2025-2026 budget to the City on a one-time emergency basis to preserve vouchers for families whose work requirements were finally being renewed after being suspended during the pandemic. The City and State also improved eligibility for low-cost vouchers to up to $114,000 a year for a family of four. There are also 10,000 children in NYC Early Intervention programs (for very young children with disabilities) and New York offers twelve weeks of paid family leave for any working parent. (I assume the Trump administration’s latest bizarre move to suddenly cut social service and child care funding to New York will get halted sooner or later.)

NYC’s administrative abilities will make this scale-up relatively smooth

One of the City’s greatest advantages to scale-up universal child care is its immense, consolidated school system and the organizational capabilities associated with enough personnel to handle contracting, administration, and supervision. Universal half-day pre-k began being funded by the State in the late nineteen-nineties, and the school districts in the City had scaled that program up sufficiently that when Mayor DeBlasio initiated full-day pre-k, the City could convert the half-day programs rapidly to full-day. The decade-long effort to utilize not-for-profit organizations to add pre-k seats resulted in a majority of the seats now going to non-DOE facilities.

The City initiated 3-k during the DeBlasio years but its funding has not been stable. A major element of the Governor’s plan is to complete universal pre-k statewide, complete 3-k in the City, and initiate programming for children age 2-3. NY State school aid for pre-k statewide was $1.2 billion in 2025-2026, split nearly equally between NYC and the rest of the State. A similar amount could fully fund universal 3-k within a few years to the extent the physical facilities were available.

NYC will still have to deal with other fiscal issues to make universal child care a reality

The City’s effort to provide universal child care can’t take place in a vacuum. In the November 2025 Update to the NYC Fiscal Plan, the Adams administration Office of Management and Budget forecast a $4.7 billion deficit for NYC Fiscal-Year 2026-2027. However, New York State Comptroller Thomas DiNapoli’s analysis of the City November plan indicated there was a risk the City’s true deficit next year could reach $10 billion because the City was severely underbudgeting its true expenses for housing vouchers, social services, homeless expenses, overtime, and more. The Mamdani administration will be challenged to cover the City’s basic expenses for schools, police, human services, health care, transit and more without major budget cuts.

Mayor Mamdani has called for tax increases on the very wealthy and big business to pay for the City’s child care expansion, but has to confront major deficits right way. There is a way the State could help since it is only the State that can authorize an increase in the City’s income tax or increase business taxes.

For example, during the 1990-1991 national recession, huge deficits were occurring in NYC’s budget while crime continued to climb in the City. Then Mayor Dinkins and then City Council Speaker Peter Vallone asked then Governor Mario Cuomo to authorize a City income tax increase that would first be used to balance the budget, and then slowly devoted to add thousands more police officers. The Governor and the Legislature approved it and funded 5000 more police officers for the City of New York. Most of them weren’t hired until Rudolph Giuliani became Mayor.

A small income tax increase on the very wealthy in NYC could bring in almost $ 2 billion

Mayor Mamdani wants the State to increase income taxes on residents making more than $1 million a year by two percentage points. That’s a pretty whopping tax hike but the Governor and the Legislature could meet him halfway. A one point increase in the City income tax for persons making over $1 million a year ( a little less for single persons) could yield $1.8 billion a year and could cover some of the City deficits and slowly move into a trust fund for universal child care, bringing ages 0-2 into care while the State fully funded 3-k and pre-k out of its own resources.

NYS might level a small corporate income tax surcharge too

At the State level a corporate income tax surcharge expires at the end of calendar 2026. The basic corporate income tax is 6.5% of New York income, and the surcharge for businesses with income over $5 million is .75% for a total of 7.25%. An MTA surcharge of 30% is imposed within the MTA region. The State DOB is also forecasting lower corporate tax revenue as a result of the BigBeautifulBill, which lowered corporate tax rates for businesses in various ways that reduce New York’s corporate tax revenue.

Governor Hochul has suggested she would be open to a corporate income tax increase. The State could bring the rate up to 8%, an effective 25% increase going forward that could yield $2 billion a year and move the funds to universal child care over time.

Bottom line:  NYC Universal Child Care is closer than you think.