Governor Kathy Hochul on Monday said the 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 towards 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, she said.
The contribution now shrinks the city's budget deficit to $5.5 billion, down from the initial $12 billion projection, that was later revised to $7 billion.
“A strong New York City means a stronger New York State. This investment protects services and puts the city on stable financial footing,” Hochul said in a statement. “New Yorkers expect the state and the city to work together, and I’m proud to partner with the Mayor to deliver for working families.”
Mayor Zohran Mamdani, scheduled to present the city's fiscal budget proposal on Tuesday afternoon, has been calling for a tax hike on corporations and wealthy New Yorkers to fill the budget gap.
“Working New Yorkers did not create this budget crisis and they should not be the ones to pay for it," Mamdani said. "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 Governor Hochul’s partnership at this critical moment. This is what it looks like to begin a new, productive, and fair relationship between City Hall and Albany – focused on delivering for working New Yorkers.”
