Mamdani, Hochul Close Municipal Budget Gaps ‘Completely’ With Albany Funding

Mayor Zohran Mamdani released the city’s fiscal year 2027 budget on Tuesday, which got a major boost from the state to close its impending deficits.

Up to $8 billion will be provided by Gov. Kathy Hochul and state lawmakers over the next two years to support New York City’s operations, which were left with $2.2 billion in deficits for 2026 alone following the exit of Mayor Eric Adams at the end of 2025.

The total $124.7 billion executive budget for 2027 will now be reviewed for adoption by the New York City Council.

Mamdani did not back down in his effort to “tax the rich” and implement the proposed pied-a-terre tax that has raised the ire of New York City’s highest earners, such as Citadel CEO Ken Griffin and Vornado Realty Trust Chairman Steven Roth in recent weeks. 

“We have answered the call New Yorkers have rallied around for years: We will tax the rich, make no mistake,” Mamdani said in his Tuesday address.
”This is the kind of progress that arrives too rarely, and it is the kind of progress that can only be won by a movement of New Yorkers, those who canvass their neighbors, those who dialed endless numbers, those who believe the government can truly change the status quo.”

“The new pied-a-terre tax applies to nonresident New Yorkers who own a second home worth more than $5 million,” Mamdani added. “It will generate $500 million in annual revenue.”

Mamdani will not pursue a property tax increase across the board, however.

The budget shortfall for fiscal year 2027 alone is expected to be about $10.5 billion, according to a report New York City Comptroller Mark Levine released in January.

“Today, we are fulfilling the promise to make free universal child care a reality, making significant investments in education, public safety and infrastructure while providing the city the resources they need to continue to fund critical services for New Yorkers,” Hochul said in a statement Tuesday morning.

During an afternoon briefing, Mamdani provided a full breakdown on the city’s financial forecast after first briefing New York City Council Speaker Julie Menin, Public Advocate Jumaane Williams, Levine and members of the City Council.

“We had a productive meeting with Mayor Mamdani on the executive budget, and we appreciate that the administration has moved toward an approach championed by the council that identifies savings and avoids raising property taxes or raiding reserves,” Menin said in a statement. “While we await a final state budget, we are pleased with Gov. Hochul and the state legislature’s commitment to providing the city with billions in additional funds and savings.”

Menin has not always been an ally in Mamdani’s crusade against the wealthiest earners, but has voiced agreement that those who own second homes in New York City need to contribute to the budget and city services that go toward primary residents.

The Mamdani administration also plans to provide the School Construction Authority with $1.5 billion for its $7 billion, five-year capital plan to build more schools, as well as another infusion of funding to hire 1,000 new teachers.

The budget also includes $4 billion in capital funding over the next five years for New York City Housing Preservation and Development and another $5.6 billion for the New York City Housing Authority.

Mark Hallum can be reached at mhallum@commercialobserver.com.