Governor Kathy Hochul today unveiled proposals to support small businesses, grow New York’s economy, and invest in the workforce as part of her 2025 State of the State. Governor Hochul’s economic development and workforce proposals include new access to capital for small businesses, free community college degrees for adults pursuing degrees in in-demand fields, enhancing the performance based Excelsior Jobs Tax Credit with a new tier for semiconductor supply chain companies, and protecting workers from wage theft.
“When I took office, I committed to making New York the most business-friendly and worker-friendly State in America — and we’re working to make that a reality,” Governor Hochul said. “My proposals will not only support the small businesses that are already in New York but will also kick-start economic growth and opportunities for entrepreneurship – to support the next generation of founders and innovators.”
Helping Small Business Thrive in New York
Support Small Businesses With Low INterest Capital (LINC)
High interest rates can incapacitate small businesses—which often pay higher borrowing rates due to their reduced collateral and higher risk profiles as compared to larger firms—preventing them from investing in expansion and creating new jobs. The successful Linked Deposit Program, which helps small businesses borrow at more affordable rates, has lowered the interest rate for nearly 6,000 businesses, resulting in $2 billion in bank lending, and leveraging over $4 billion in new capital investments by New York State businesses.
In response to demand that far exceeds supply, Governor Hochul will launch the Low Interest Capital program (LINC), an expansion of the Linked Deposit Program, to support hundreds of additional small businesses across the state.
Turbocharge Hiring by Startups
While our innovation ecosystem is strong, when small innovation businesses transition from receiving hands-on support from incubators to operating independently, the risk of failure can grow and the costs to continue scaling can prove prohibitive.
Governor Hochul is advancing the Companies Attracting Talent to Advance Leading Innovations and Scale Technologies in New York (CATALIST NY) program. CATALIST NY will allow small 53 businesses that have completed a New York State incubator program to be eligible for personal income tax benefits to reduce the cost of hiring. By lowering the tax burden to hire new employees, startups can hire more seamlessly during a critical phase of their expansion, putting down stronger roots in New York.
Provide Artificial Intelligence Technical Assistance to Small Businesses
Innovations in Artificial Intelligence (AI) have the ability to change the way businesses operate, leading to greater efficiency, fewer business disruptions, and increased responsiveness to customer needs. Large companies can afford to spend millions tracking, researching, and implementing AI developments, but the rapid progression of AI applications makes it difficult for smaller firms to keep up. To assist small businesses with Artificial Intelligence education and adoption, Empire State Development will partner with New York’s network of Entrepreneurship Assistance Centers (EACs) to provide AI training to entrepreneurs and small businesses across the state. By partnering with the EACs, which are strategically located in disadvantaged communities in every region of New York, this initiative will open the door to small businesses seeking to better capitalize on AI’s transformational power.
Increase Capital Access for Underrepresented Startups
While minority and women founders are generally underrepresented in the tech sector, the disparity is particularly severe in AI. Less than 25 percent of AI employees identify as racial or ethnic minorities, and one study found that female-founded companies account for under three percent of AI deals in the past decade. This lack of diversity is particularly problematic in AI, as models tend to reflect the biases of their creators.
Governor Hochul will work to close this gap in representation by launching a public-private partnership with leading technology firms to invest $20 million into New York State AI start-ups.
Funding will include $10 million from the ESD NY Ventures Program and a combined $10 million in direct commitments from IBM and Armory Square Ventures, who serve as founding members of the Governors Emerging Technology Advisory Board. This partnership and collaboration among ESD NY Ventures, IBM, and Armory Square Ventures will help ensure that tomorrow's innovation leaders have the resources to advance cutting-edge technologies here in New York.
Building the Workforce of Tomorrow
Free SUNY and CUNY Community College in High-Demand Occupations
Associates degrees facilitate entry into the workforce, increasing both likelihood of having a job and earnings. In addition to the value of an associate’s degree, State University of New York (SUNY) and City University of New York (CUNY) degree programs are deeply integrated into industry pipelines. For example, Onondaga Community College’s Micron Cleanroom Simulation Lab will prepare students for careers in semiconductor and microelectronic industries.
Building on Governor Hochul’s historic investments in SUNY and CUNY, New York State will make community college free for students ages 25-55 pursuing select associate degrees in high-demand occupations, including nursing, teaching, technology, engineering and more. Additionally, the State will cover the costs of tuition, books and fees for participants in this program and will increase funding for career support infrastructure to connect students with job opportunities. A similar program in Massachusetts has been a proven success, as have SUNY and CUNY’s existing programs that provide similar wraparound services.
Create New Registered Apprenticeships and Pre-Apprenticeships in High-Demand Fields
Nationwide, 93 percent of workers who complete registered apprenticeships gain employment, and annual average starting wage post-apprenticeship is $77,000. While there are nearly 18,000 apprentices across New York, opportunities exist to expand this gold-standard apprenticeship model beyond the skilled construction trades. Governor Hochul recognizes the need to develop programs to meet the workforce demands of high-growth occupations by incentivizing businesses and supporting participants, while focusing on diversification and expansion of programs. To that end, the Governor will provide funding for providers of registered apprenticeships and pre-apprenticeships in the high-demand occupations, to cover partial apprentice wages, training costs, and for underrepresented groups, wraparound services.
Expand Cybersecurity Careers With Degree Reform and New Fellowships
Currently, many cyber and technology jobs require a four-year degree. By excluding candidates without four-year college degrees, employers overlook millions of Americans who are trained through alternative routes and have the valuable skills, talent and drive to succeed in today’s workforce. Governor Hochul will reform the way executive agencies hire cybersecurity and technology talent by removing four-year degree requirements for many entry-level and early-career positions, and will create a cybersecurity fellows program with SUNY and CUNY community colleges that places graduates in two-year jobs in state government. Additionally, Governor Hochul will work with private companies to similarly reduce or remove certain educational requirements to create more entry points for New Yorkers graduating from community and technical colleges.
Investing In Advanced Manufacturing
Grow the Semiconductor Industry and Build the Semiconductor Supply Chain New York has emerged as a leader in the semiconductor industry through the Green CHIPS program, attracting over $120 billion in private sector investment. Much of that success is owed to New York’s Excelsior Jobs Tax Credit Program, which encourages businesses to locate or expand in New York by providing Excelsior tax credits after meeting job creation and investment thresholds. While New York State continues to lead in bringing semiconductor manufacturing home to our state, multiple states are vying to attract the related supply-chain companies that are looking to do business with those manufacturers.
Governor Hochul is doubling down on what works and is proposing a 10-year extension of Excelsior, to allow our foremost job creation tool to continue its track record of success. To be competitive, this year’s Executive Budget creates a new tier for semiconductor supply chain companies within the proven Excelsior Jobs Tax Credit Program. The new Semiconductor Supply Chain Tax Credit will offer up to a 7 percent jobs tax credit, and a 3 percent investment tax credit. The Excelsior enhancements also include a large-scale semiconductor R&D tax credit for major research investments exceeding $100 million in qualified expenditures. In addition, the Governor's Office of Semiconductor Expansion (GO-SEMI), which was created in State Fiscal Year 24, will establish a Strategic Global Engagement team to promote New York State abroad and attract international semiconductor and supply chain companies.
Promote Opportunity With Electric Readiness for Underdeveloped Properties Fund
New York State is attracting investment in new manufacturing and high-tech development faster than existing energy system planning and funding mechanisms can accommodate, and we need more power-ready sites — a key factor in where companies decide to locate. Indeed, lack of speedy connection to reliable power is often cited as a primary reason for advanced manufacturers taking their business, and jobs, towards other states or opportunities.
Locating at a power-ready site can shave years off the timeline between site selection and a plant’s opening day. Extending transmission and electrical infrastructure to more sites around the State will help unlock equitable economic growth and supercharge our ability to connect New Yorkers with the advanced manufacturing jobs of the future.
To help land more business and jobs in New York, Governor Hochul will launch a new program — the Promote Opportunity with Electric Readiness for Underdeveloped Properties (POWER UP) — to fund the proactive development of electric capacity to create power-ready sites and attract new businesses to the state. Governor Hochul is seeding the fund with $300 million, which will allow for the proactive development of dozens of sites.
POWER UP will not only alleviate bottlenecks to connect businesses to power but will help defray electrical costs for regional consumers, who under our current regulatory structure are often left to foot the bill for grid improvements prompted by one particular project within their region. POWER UP will defray those costs by interjecting state capital dollars into projects that provide overwhelming public and economic benefits.
Empire State Development (ESD) will provide economic development expertise to ensure the fund helps prepare sites that are strongly positioned to host manufacturing operations that will create jobs in New York State.
The Department of Public Service will provide expertise in utility capital planning and will identify opportunities for project sites that bundle clean energy resources together.
Double Down on Shovel-Ready Sites for Modern Manufacturing
While New York State is a leader in business attraction, large scale manufacturing and industrial firms can only continue to locate and expand here if sufficient shovel-ready space is available.
Governor Hochul established the Focused Attraction of Shovel-Ready Tracts New York (FAST NY) program to build shovel-ready sites across New York and ensure the State is prepared to capitalize on high-value opportunities. Since its launch in 2022, FAST NY has committed over $175 million to 20 projects, transforming nearly 3,000 acres of previously underutilized land into future economic engines of the State.
This year’s Executive Budget proposes a new round of FAST NY that prioritizes semiconductor manufacturing and supply chain projects as well as cleantech and green economy projects. This new round of funding will include a focus on equipping sites with utility access, including renewable and clean energy.
Build Clean Energy Zones
To unlock economic growth and lower the cost of our clean energy transition, New York will encourage the development of regional concentrations of clean electric generation paired with transmission, by expanding its coordinated grid planning process to identify Clean Energy Zones (CEZs).
Generation and transmission projects in a CEZ will be proactively coordinated to reduce developers’ interconnection risks and costs, thereby lowering costs paid by electric customers. This approach will allow for more community engagement, reduce red tape for developers and business, and align ongoing economic development and power sector initiatives as we build out the clean energy future.
The CEZ process will identify opportunities to integrate clean energy generation and transmission, ensuring the efficient and effective use of New York’s natural resources to meet local demands, support the State’s reliability needs, and achieve climate goals. CEZ projects will receive priority review, with generation and transmission projects proactively coordinated to minimize development risks and reduce costs for consumers. Host communities will benefit from the increased tax revenue, and state economic development resources will be directed to communities within a CEZ.
Strengthening Communities and Promoting Economic Growth
Transform Regional Economic Development With High-Impact Projects
The Regional Economic Development Councils (REDCs) have driven significant progress across New York, but their current funding limits make it difficult to support large-scale, game-changing projects. To address this, Governor Hochul will refocus the REDC initiative on transformative projects that serve as high-impact economic anchors such as cultural venues, waterfront revitalization efforts, and mixed-use development projects. This new approach will maximize the benefits that REDC awards deliver for local communities and regional economies, driving growth and revitalization in every corner of the state.
Renew our Commitment to Our State’s Capital City
Albany is New York’s proud capital, as home to a vibrant community of families and businesses that exemplify our state. Governor Hochul has long recognized the distinct position Albany holds as the capital. Since taking office, Governor Hochul has directed over $4 billion in public resources into transformative projects in Albany. These landmark initiatives include the replacement of the Livingston Avenue Rail Bridge, the modernization of the Wadsworth Laboratory, the demolition of the long-blighted Central Warehouse, and investments in the NY CREATES Albany NanoTech Complex—now recognized as the flagship facility of the federal National Semiconductor Technology Center.
Yet, despite its rich history and the transformative projects currently underway, Albany has been slow to recover from the devastating socio-economic impacts of COVID-19. And Albany has foregone the opportunity for a more diversified economy to fulfill the crucial responsibility of hosting the State government. Governor Hochul recognizes the exceptional responsibility and power of New York State government—the largest anchor institution in the community—to drive economic and community development within Albany. Under the Governor’s leadership, Albany will have a true partner in New York State.
This year’s Executive Budget launches an inclusive, State-led initiative to invest $400 million to revitalize the downtown core of Albany—in partnership with local stakeholders and backed by significant State resources to catalyze change. This investment includes $200 million to make real investments into tangible strategies and projects to revitalize Albany, such as: targeted strategies that address public safety and quality of life; revitalizing vacant or dated anchor institutions; reinvigorating commercial corridors; repurposing vacant and underutilized commercial buildings for housing and other new uses; leveraging open spaces and key public assets; coordinating with ongoing planning efforts related to the redevelopment of I-787 and the Livingston Avenue rail bridge; and creating new reasons to work, visit, or live in downtown Albany. This historic investment also includes $150 million to renovate the New York State Museum and upgrade the exhibits to be more inviting to visitors, including families, as well as funding for the State to temporarily supplement Albany’s public safety efforts by offering enhanced State Police resources to reduce crime and increase community policing in key corridors.
Informed by conversations with local stakeholders, the Governor’s commitment to Albany will play out through a comprehensive community engagement process with the public, elected representatives, and community leaders to identify key opportunities to promote business development, bolster public safety, build out community anchors, encourage housing, and enhance affordability.
Seizing Opportunities From the AI Revolution
Diversify the Artificial Intelligence Pipeline With AI Prep
Diversify the Artificial Intelligence Pipeline with Artificial Intelligence Prep As the Artificial Intelligence (AI) sector continues to grow at a rapid pace, it is critical the technology developed incorporates a broad range of perspectives from a diverse group of innovators. However, systemic biases and legacy workforce training practices tend to leave some populations behind in training and opportunity. To equalize access to AI careers, Empire State Development Corporation (ESD) will launch AI Prep: a workforce development initiative focused on the training and placement of disadvantaged college students into AI jobs. This free training will focus on applied problem solving and include mentorship support from leading technology companies. Students will receive a stipend and other wraparound support to participate in online courses in AI—developed by leading researchers and industry experts—allowing them to engage in real-world machine learning projects leading to internship opportunities at leading New York technology companies.
Support Workers Displaced by AI
Governor Hochul is committed to ensuring that the benefits of Artificial Intelligence (AI) integration are compatible with an economy where every worker can thrive, and to understanding the potential impact of new technologies through real data. At the Governor’s direction, DOL will require businesses submitting notices of worker layoffs to its Worker Adjustment and Retraining Notification (WARN) system to convey whether a layoff is related to a businesses’ use of AI. Any impacted worker will be able to access the broad array of workforce training programs and supports offered by DOL or local partners.
Strengthening our Workforce
Leverage Federal Support To Expand Health, Behavioral and Social Care Workforce
Strategies designed to support training and education for new workers as well as support career advancement for existing workers, such as tuition payments and student loan repayment, have been shown to improve retention and help reduce worker shortages. As part of the State’s federal Medicaid 1115 waiver, New York is implementing two workforce programs. The Career Pathways Training program is funding educational and career support services for new and advancing health, behavioral health, and social care workers. Through three regional Workforce Investment Organizations, the program covers tuition, textbooks, and educational and career supports and places individuals in high-demand titles. Participants will make a three-year service commitment to work at providers that serve at least 30 percent Medicaid or uninsured members. New York is also launching the Student Loan Repayment Program, which will provide loan payments for psychiatrists, primary care physicians, dentists, nurse practitioners, and pediatric clinical nurse specialists who make a four-year commitment to work at providers that serve at least 30 percent Medicaid or uninsured members.
Deploy State Funding to Support Health Care Training Programs
Governor Hochul will expand support for health care training programs under the Increasing Training Capacity in Statewide Healthcare Facilities grant program, with a distinct focus on nursing training programs. The State will provide grants for regional programs that prepare and support healthcare students through the Healthcare Training and Life-skills Program, covering costs like child care, transportation, and tutoring. Governor Hochul will provide support for Area Health Education Centers, which are local training programs that recruit younger individuals from underrepresented populations into health care professions. In addition, New York will launch Health Workforce Connects, a portal that will engage individuals in new and growing careers in health care.
Expand Enforcement Power Following an Unpaid Wage Theft Judgment
The Department of Labor (DOL) has limited ability to force employers to pay owed wages to workers, even after an employer has been found guilty of wrongfully withholding payment. To ensure hardworking New Yorkers are paid every cent they earn, while respecting the due process rights of employers, Governor Hochul will advance legislation to expand DOL’s enforcement power to include the authority to levy liens, seize financial assets, and issue a stop work order following an unpaid wage theft judgement.
Strengthening Protections for New Yorkers
Align Child Labor Law Penalties With Severity of Violation
New York State’s child labor laws have not been updated in decades and are not calibrated to differing severity of violations. Governor Hochul will advance legislation to raise the maximum civil penalties, include felony-level charges for violations that result in serious injury to children, and define knowingly employing a minor in a dangerous occupation resulting in their death as a classification of homicide. Governor Hochul is committed to encouraging and supporting safe work environments without creating significant financial hardships on employers. When violations do not risk a child’s safety and health, Governor Hochul will direct DOL to offer businesses reduced penalties if they participate in a child labor prevention program.
Expand Access to Medical Care in the Workers’ Compensation System
There are about 80,000 medical providers in New York State, but only 10 percent are authorized to treat workers’ compensation claimants — significantly fewer than under Medicare. Access to quality medical care is critical for both the injured worker and for the employers who rely on their workers returning to the workforce. To expand the pool of workers’ compensation providers, Governor Hochul will advance legislation to automatically authorize all medical providers licensed in New York State and allow medical and surgical residents and fellows to treat workers’ compensation claimants. Providers also cite inadequate reimbursement levels as a barrier to caring for injured workers, and the current process to change the reimbursement levels is difficult. To ensure regular and automatic updates, Governor Hochul will increase the fee schedule and tie it to the Medicare fee schedule. Finally, in December 2006, the Department of Financial Services (DFS) issued legal guidance directing health insurers to cover medical treatment for injured workers while the workers’ compensation claim is being contested. To ensure injured workers do not have a gap in payment of medical bills, Governor Hochul will advance legislation codifying this guidance and permitting workers’ compensation insurers to temporarily pay medical bills without admitting responsibility for the workers’ compensation claim.
Empire State Development President, CEO and Commissioner Hope Knight said, "New York State continues to promote and generate new economic growth under Governor Hochul's leadership through strategic investments in targeted industries, projects and programs. The new initiatives proposed in this year's State of the State will further support community redevelopment and regional economic growth, foster new and innovative technologies, and enable more New Yorkers to learn the high-demand skills that create sustainable and equitable benefits throughout the State."
New York State Department of Labor Commissioner of Labor Roberta Reardon said, “From expanding our ability to enforce wage theft and child labor law penalties to creating new training opportunities, Governor Hochul continues to empower our workforce while building a more affordable New York State. By investing in successful workforce development programs, including registered apprenticeships and pre-apprenticeships, and strengthening laws to safeguard our workers, we are giving New Yorkers the skills and protections they need to thrive in the economy of tomorrow.”
New York State Workers’ Compensation Board Commissioner Clarissa M. Rodriguez said, “We applaud Governor Hochul’s efforts to improve access to medical care for workers who become injured or ill on the job. When workers can promptly receive the treatment they need, they’re more likely to heal to the best of their ability — benefitting not only them, but also the businesses they work for and the communities in which they live.”
SUNY Chancellor John B. King Jr. said, “SUNY's community colleges are engines of economic mobility and Governor Hochul’s proposal for a tuition-free community college education will help connect more working-age New Yorkers to college degrees and economic opportunity. SUNY provides an excellent education and a path to job opportunities in fields as varied as advanced manufacturing, health care, cybersecurity and green technology, and we are thrilled with the Governor’s commitment to community colleges.”
CUNY Chancellor Félix V. Matos Rodríguez said, “Governor Hochul’s plan to fund free community college in high-demand fields and expand integrated industry pipeline programs is an investment in the power of community colleges to meet growing industry demand. CUNY has already proved itself to be an indispensable source of talent for New York in health care, education and tech as the need for qualified workers in these critical fields has grown. Making it possible for many more talented individuals to obtain an associate degree and move into prosperous, sustaining careers will uplift New Yorkers and strengthen our state.”