Hochul Sends $1.5B to NYC as Mamdani Pushes Millionaire Tax Hike

Gov. Kathy Hochul is directing an additional $1.5 billion in taxpayer funding to New York City, providing financial relief to Mayor Zohran Mamdani as he prepares to unveil his first budget and continues pressing for higher taxes on top earners, as reported by The New York Post.

Hochul announced Monday that the state will commit an extra $1 billion during the current fiscal year and another $500 million for the next fiscal year.

The move comes as Mamdani, a Democratic socialist elected on promises of expanded spending, faces a budget shortfall ahead of releasing his financial plans this week. 

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New York State Assemblymember Zohran Mamdani speaks in a Malikah’s Iftar Ramadan event at the Museum of the Moving Image on March 07, 2025 in the Queens Borough of New York City.The mayor had raised alarms last month over what he described as a $12 billion budget gap inherited from the administration of former Mayor Eric Adams.

Mamdani attributed the shortfall to underbudgeting by the prior administration and warned of serious fiscal challenges for the city.

However, two weeks later, the Mamdani administration acknowledged that the projected deficit was at least $5 billion smaller than initially stated.

Officials said they had failed to account for $7.2 billion in end-of-year tax revenue, much of it driven by Wall Street bonuses.

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Despite the revised figures, Mamdani has continued advocating for higher taxes on high-income residents. He has urged Hochul and state lawmakers to increase taxes by 2% on individuals earning $1 million or more in New York City.

Hochul has repeatedly resisted the proposal.

Political observers have noted that the governor is up for re-election this year, and insiders have pointed to potential political consequences tied to raising taxes on top earners in the state’s largest city.

In announcing the additional funding, Hochul framed the decision as an investment in stability for both the city and the state.

“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.”

Mamdani welcomed the funding commitment.

“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,” he said.

Mamdani is scheduled to present his fiscal year 2026 and 2027 budget proposals on Tuesday. Both budgets are required to be balanced under state law.

The additional state aid is expected to play a significant role in closing the remaining gap as the new administration seeks to move forward with its policy agenda.

Lawmakers in Albany will ultimately weigh in on any tax changes, including the proposed increase on millionaires.

As budget negotiations continue, the funding agreement marks a key development in the financial relationship between City Hall and the state government during Mamdani’s first year in office.

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