Hochul sends $1.5B more to NYC ahead of Mamdani’s first budget plan

The governor committed an additional $1 billion this fiscal year and $510 million next fiscal year, according to a press release. That includes hundreds of millions of dollars in recurring funding that had shifted from the state’s to the city’s responsibility over the years.

The fiscal windfall came the day before Mamdani was poised to release plans for the first city budget of his administration.

“A strong New York City means a stronger New York State,” Hochul said in a statement. “This investment protects services and puts the city on stable financial footing.”

The recurring funding includes $300 million for “youth programming,” according to the release. The governor’s and mayor’s offices did not immediately say what children’s programs would benefit from the new investments.

It also covers a restoration of $150 million in sales tax receipts that otherwise would have been retained by the state, and $60 million for public health.

“This is what it looks like to begin a new, productive, and fair relationship between City Hall and Albany,” Mamdani said in a statement.

The additional funding is likely to poke holes in Mamdani’s argument that New York should raise taxes on the wealthy, which Hochul opposes.

In a closely watched public address last month, the mayor warned of a $12 billion budget shortfall, which he blamed on former Mayor Eric Adams for under-budgeting programs such as special education and rental assistance, and called for tax hikes to close the gap.

During a budget hearing last week in Albany, Mamdani revised his estimate down by $5 billion, driven by better-than-expected revenues, including Wall Street bonuses. He continued to advocate for higher taxes in his testimony, part of an annual tradition known as “Tin Cup Day.”

According to reporting in the New York Times, Mamdani had previously considered joining an upcoming tax-the-rich rally in Albany but ultimately opted against it, apparently deciding it was better to work with the governor than risk an adversary relationship to fund his affordability agenda for New York City. Mamdani has endorsed Hochul for re-election.

Mamdani was set to release his preliminary budget on Tuesday, with a final plan due by the end of June.