State will allocate $1.5 billion to NYC to mitigate fiscal challenges

New York Gov. Kathy Hochul speaks during a press conference with New York Mayor Zohran Mamdani, Tuesday, Jan. 6, 2026, in New York. Photo: Yuki Iwamura/AP

STATEWIDE — 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, Gov. Kathy Hochul and Mayor Zohran Mamdani said in a joint announcement on Monday, Feb. 16.

The additional funding includes $510 million in recurring monies targeted toward costs that had shifted from the state to New York City under prior administrations. Among these costs are 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.

In recent weeks, Mamdani has reduced New York City’s budget gap to $7 billion by deploying in-year reserves, committing to an agency savings plan and incorporating higher-than-expected revenues.

Together, the mayor and governor are bolstering a renewed partnership between City Hall and Albany. “I am heartened by this budgetary progress and Gov. Hochul’s partnership at this critical moment,” said Mamdani. “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.”

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