Mayor Mamdani and Gov. Hochul Tuesday announced an additional $4 billion worth of cash and savings aimed at reducing New York City’s massive budget deficit, with more than half coming in the form of a pension restructuring.
The announcement, made ahead of the mayor’s release of his executive budget proposal later Tuesday, includes state-approved savings measures, including $2.2 billion in pension restructuring and more than $500 million in class size relief. The precise details on the pension restructuring plan were not immediately available, but Mamdani recently floated the idea of deferring payments into pension funds for city employees.
The $4 billion also includes projected revenues from the previously-announced pied-à-terre tax on luxury second homes and $150 million in additional school aid.
A property tax increase for NYC residents, part of Mamdani’s initial budget proposal, has proven politically unpopular and is not expected to be in the budget plan. Mamdani’s calls for increased taxes on the wealthiest city residents and corporations also are non-starters at this point, with Hochul pushing back on that approach.
The budget plan was originally due May 1, but that deadline was pushed back due to state budget delays.
Mamdani has lobbied the state for more aid over the past several months, including by calling a fiscal crisis and declaring the city would be facing a whopping $12 billion budget gap. That estimated budget gap shrank weeks later to $7 billion, then again to $5.4 billion.
“For years, the relationship between City Hall and Albany has been defined by dysfunction and infighting,” Mamdani said in a statement. “Governor Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve. We have partnered through every step of this process to protect the fiscal health of our city.”
The governor said the total $8 billion in state aid over two fiscal years is directed to childcare, education, public safety and infrastructure.
“This is what a results-driven, responsible partnership looks like and I’m proud to work with Mayor Mamdani to deliver for working New Yorkers,” Hochul said in a statement.