STATEN ISLAND, N.Y. — 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, according to Gov. Kathy Hochul and Mayor Zohran Mamdani.
Hochul has committed $1 billion in city fiscal year 2026 and $510 million in city fiscal year 2027, according to a press release issued Monday by the governor’s office.
The additional funding includes $510 million in recurring funding aimed at addressing costs that shifted from the state to the city under prior administration. That includes $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,” Hochul 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.”
In January, Mamdani announced that the city was facing a budget gap of about $12 billion. He largely blamed former Mayor Eric Adams and former Gov. Andrew Cuomo for the crisis, saying the former downplayed the city’s budgetary standing over the past four years and the latter funneled tax dollars from the five boroughs to pay for things in other parts of the state.
In this Feb. 7, 2026 photo, Mayor Zohran Mamdani thanks firefighters and EMS personnel for keeping New Yorkers safe during the cold snap at Engine 168, EMS Battalion 23 in Rossville Owen Reiter
Mamdani said the following about the $1.5 Billion boost.
“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 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.”
In recent weeks, Mamdani has been able to reduce that gap to about $7 billion by deploying in-year reserves, committing to an agency savings plan and incorporating higher-than-expected revenues, according to state officials.
On Tuesday, he is set to unveil a record $127 billion budget, fueled by a proposed property tax hike on New Yorkers, the New York Post reported.