Mamdani Plugs $12 Billion Budget Hole With Hochul Assist

By Katie Honan, The City

May 12, 2026, 9:05 a.m.

Mayor Zohran Mamdani will present a more than $124 billion budget proposal that doesn’t raid city reserves and takes a property tax hike off the table after he found more savings and revenue, according to people briefed on the matter.

The budget includes a total of $8 billion in state aid — enough to close the $12 billion budget gap for the next two fiscal years that Mamdani inherited from his predecessor, according to a City Hall statement.

Mamdani said in a statement that he and Gov. Kathy Hochul “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 mayor’s executive budget proposal, initially scheduled for May 1, was late due to state budget delays.

And while that budget is still being worked out in Albany, Mamdani will present his spending plan later Tuesday.

Hochul said in a statement that she and Mamdani were “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.”

‘Conservative’ on New Spending

After a briefing by the mayor’s team, City Comptroller Mark Levine told reporters there was a lot of “good news in this budget,” but he remained cautious.

“We are entering into very uncertain economic times because of the threat of a recession and the impact of AI, and I want us to build a very strong fiscal foundation that grows reserves,” he said.

“There still is a reliance on a number of one-shot measures, and those are tools that are then going to be off the table next year. And we are looking at about a $7 billion shortfall for the following fiscal year.”

Levine did praise the mayor for his “pretty modest” additional spending.

“It’s been a while since we’ve seen a mayor be this conservative on new spending,” he said. “It reflects why we’re in a better place today than we were in February.”

Dire Budget Hole

Gov. Kathy Hochul speaks alongside Mayor Zohran Mamdani at the Bedford Armory in Crown Heights about cutting bureaucratic red tape for construction projects, Feb. 10, 2026. Credit: Ben Fractenberg/THE CITY

Earlier this year, Mamdani presented a dire budget picture, with an initial estimated budget gap of $12 billion, which was then re-adjusted to $7 billion a few weeks later.

He floated a property tax increase as a last-resort option to raise money to fill the gap, as Hochul continued to resist raising taxes.

Raising the property tax rate, which has not been done since Mayor Michael Bloomberg, is one of the few levers the mayor has to raise revenue. It was met with immediate backlash and was a non-starter because it was unlikely to pass in the council.

Gov. Hochul said Monday she had “been working very closely with the mayor and his budget team and his deputies to solve a problem that was not his making.”

“He inherited a pretty significant financial mess,” she said. After noting the help the state has given over the last few months, including for childcare, she said the state is “helping out with a number of other areas.”

Public Advocate Jumaane Williams, though, took a more cautious approach to the promised state aid.

“I think until that budget is passed, you don’t know if all that money is real,” he said.

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