State to Boost NYC Finances by $1.5B;
Mayor Eyes Property Tax Hike Fill Gap
ALBANY—New York Gov. Kathy Hochul and New York City Mayor Zohran Mamdani announced on Feb. 16 that New York State will allocate an additional $1.5 billion in operating expenses over two years to help address New York City’s fiscal challenges.
This additional funding includes $510 million in recurring funding targeted toward costs that had shifted from the state to New York City under prior administrations, including about $300 million for youth programming, a restoration of $150 million in sales tax receipts that would have otherwise been retained by the state, and $60 million for public health. The remaining $500 million will be targeted to shared priorities to be determined in subsequent discussions, state officials said.
“A strong New York City means a stronger New York State. This investment protects services and puts the city on stable financial footing,” Gov. Hochul said. “New Yorkers expect the state and the city to work together.”
Mayor Mamdani said, “Working New Yorkers did not create this budget crisis and they should not be the ones to pay for it. After years of staggering fiscal mismanagement under the previous administration, our city deserves responsible and collaborative leadership. I am heartened by this budgetary progress and Gov. Hochul’s partnership at this critical moment.”
In recent weeks, the mayor reduced New York City’s budget gap to $7 billion by deploying in-year reserves, committing to an agency savings plan, and incorporating higher-than-expected revenues. The mayor was scheduled on Tuesday afternoon to unveil his proposed $127-billion preliminary city budget, which begins in July. Recently, Mayor Mamdani has called for raising revenue by taxing the wealthy. However, that plan has met some strong criticism, including opposition by Gov. Hochul.
Politico reports that part of the mayor’s budget plan will be to raise property taxes—which he can do without state approval—to close a $5.4-billion revenue shortfall.
Published: February 17, 2026