Deal Or No Deal? Confusion Over Hochul's $268 Billion Budget

By Katie Honan, The City

May 11, 2026

Gov. Kathy Hochul on Thursday announced a $268 billion state budget deal but the state assembly speaker shot back, saying there was no agreement.

Hochul said the disputed New York state budget agreement included a pied-à-terre tax on luxury second homes, investments in universal child care and more money for police officers on the subway. Her budget did not appear to include additional cash to help New York City fix its $5.4 billion deficit.

But Assembly Speaker Carl Heastie later told reporters Hochul had jumped the gun.

“There is no budget deal,” Heastie said, adding, “I don’t care what the governor says.”

“I said to her last night I was comfortable with her saying to y’all we were close — it is close,” Heastie, of The Bronx, said. “But this is what’s wrong with this process. It’s like, ‘I’m gonna only talk about policy and when I think the legislature is giving me what I want on policy, then we’ll talk about money.’”

Assembly Speaker Carl Heastie said there was no budget deal, hours after Gov. Kathy Hochul announced an agreement. Credit: Ben Fractenberg/THE CITY

Heastie said he planned to send his members home on Thursday.

“We signed off on nothing major,” he said. “I’m never doing this again. Budgets are supposed to be about money, not policy.”

Hochul had no immediate comment.

Nassau County Executive Bruce Blakeman, Hochul’s Republican challenger, said the budget snafu reminded him of the reality show “Deal or No Deal.”

“This is the left hand not knowing what the left hand is doing,” he said of the intraparty squabbling. “The fact of the matter is it’s the height of incompetence, it’s a lack of leadership.”

Budget One Month Late

Hochul’s budget, which was due April 1, is $13 billion more than last year’s and $8 billion more than Hochul initially proposed.

The “general agreement” on the budget was still light on details as the legislature will continue to go over the proposal in the coming days, the governor said.

“I’m not going to mince the words. The negotiations were not easy,” Hochul said.

“There were very substantive disagreements, tough choices and powerful special interests trying to influence the outcome, and the dysfunction out of Washington certainly doesn’t help.”

Here’s what we know about the state budget deal:

The governor said legislators are finalizing details of on a pied-à-terre tax on luxury second homes to help “close the city’s budget gap without eroding its tax base or burdening hard-working New Yorkers.”

Hochul said the budget includes her proposal to streamline environmental reviews for housing developments, letting some projects skip a 51-year-old state law requiring an extensive review that often holds up construction.

And the budget includes a “super speeder” bill which would require drivers with 16 or more speed-camera tickets over a year to install a device that would limit the car’s speed based on the local speed limit.

Hochul to City: I’ve Done Plenty

Hochul’s announcement did not include additional commitments of state funds for the cash-strapped city.

Mayor Zohran Mamdani and Council Speaker Julie Menin last week pitched the state on a change to the pass-through entity tax, or PTET, which lets some businesspeople keep state and local tax deductions that were limited by a 2017 federal law. They believe those changes could bring in $1 billion in revenue.

The governor last week slapped down a proposal by Mayor Zohran Mamdani and Council Speaker Julie Menin to roll back a state tax benefit for business owners and investors. Credit: Alex Krales/THE CITY

Hochul, who is running for reelection in November, immediately shot it down, and didn’t say whether the proposed budget includes any more of a bailout for the city.

On Friday, she defended what she’s already doing for the five boroughs, pointing to more than $1 billion to support universal childcare and another $1.5 billion to help close the gap.

“We’ve been asked to do a lot for the city, we’ve given unprecedented amounts of support for the city,” she said.

The City Council approved an extension for Mayor Mamdani’s executive budget, which was due around May 1, because of the tardiness of the state’s budget.

On Thursday, the mayor – a former state assemblymember – said he planned to release his executive budget next week as planned. And he expected the city would get what it needed to help close the budget gap.

“I’m feeling hopeful about the direction of those negotiations,” he said at an unrelated press conference. “Those were productive conversations.

This press release was produced by The City. The views expressed here are the author’s own.