New York City will be getting $1.5 billion from the state to help address a budget gap that officials say is the largest shortfall since the Great Recession.

The money will be allocated over the next two years to help with the city’s financial crisis, according to an announcement Monday from Gov. Kathy Hochul and Mayor Zohran Mamdani. 

The new funding includes $150 million to cover expenses the state used to pay for but has shifted onto the city. This is made up of $300 million for youth programming, $150 million in sales tax receipts and $60 million for public health. 

The remaining $500 million will be targeted to “shared priorities,” which officials will discuss. 

“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,” said Mamdani. “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.”   

Hochul also expressed the importance of supporting the five boroughs. 

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

Largest budget gap since Great Recession, comptroller says

New York City Comptroller Mark Levine said on Jan. 16 that the city faces a budget shortfall of $2.2 billion this fiscal year and $10.4 billion in the 2027 fiscal year.

He said it’s the largest gap since the Great Recession in 2008. 

Both Levine and Mamdani have blamed the issue on former Mayor Eric Adams’ administration. 

“We’re also calling out the cause of this gap, which was the budget practices of the previous administration, over-reliance on one-shot financial measures, such as drawing down on prepaid expenses, and especially by underaccounting for expenses that we know the city will [incur], such as overtime pay, such as shelter costs,” Levine previously said.   

“This crisis has a name and a chief architect. In the words of the Jackson 5, it’s as easy as ABC. This is the Adams budget crisis,” Mamdani said in January. “He systematically under-budgeted services that New Yorkers rely on every single day.”  

The mayor has also blamed former Gov. Andrew Cuomo.

A spokesperson for Adams said the former mayor inherited a $10 billion debt that was compounded by the COVID-19 pandemic. Cuomo’s spokesperson said Mamdani could have fixed any inequities during his time as a state legislator.  

Mamdani calls for tax hike on richest residents, corporations 

Mamdani previously called for a tax hike on the city’s richest residents and corporations to close the gap. 

At a January town hall, he demanded state approval of new taxes, which Gov. Kathy Hochul has already said no to. 

“What we are going to do is exhaust every option to make it clear that the time has come to reset the relationship between the city, its wealthiest residents, its most profitable corporations and with Albany,” Mamdani said.  

The mayor said he’s concerned about working-class residents leaving the city because of the high cost of living. He isn’t so worried about a business exodus if there is a tax increase. 

In: