Albany Prioritizes NYC Bailouts While State Budget Reaches Record Lateness

There were some state budget developments this week, but we definitely didn’t get the white smoke we were expecting. While our own state budget remains in bureaucratic purgatory, now 45 days past the April 1 deadline, New York City Mayor Zohran Mamdani unveiled his $124.7 billion budget, complete with an additional $4 billion bailout blithely signed off on by Gov. Kathy Hochul.

This does not come as a surprise. It’s all part of Democrat-led leadership saying what it has to say—i.e., Mayor Mamdani’s performative threats to raise property taxes by 10% and exhaust reserves to fill his looming budget gap—before ultimately doing what they were always going to do: Have Albany bail out the city.

This big accomplishment Mayor Mamdani, Gov. Hochul and Democrats are bragging and high-fiving about is less a breakthrough than a box checked, and it’s an unsustainable one at that. Much of it relies on gimmicks that delay multi-billion dollar spending, including deferring $2.3 billion in pension plan payments owed to retired teachers, law enforcement, first responders and other public employees.

The $4 billion aid package also includes postponing the city’s mandate for smaller class sizes—a $508 million cost that will impact New York City down the road—and banking on $500 million in revenue from a pied-à-terre tax on luxury second homes, even though the proposal has not been approved and some estimates suggest the projected revenue from the tax is inflated. And finally, a promise of another $361 million in “other actions” that remain unclear.

Had Mayor Mamdani closed the deficit through increasing economic growth, attracting new businesses and residents or exercising spending restraint, this conversation would look very different. Instead, despite knowing the city faced a $5.4 billion budget hole this year, he still called for $8.8 billion in new spending.

Closing more than half of the city’s budget gap with short-term gimmicks, rather than through a sustained and deliberate effort to rein in spending, is a recipe for exacerbating fiscal problems. And the continuous ask-and-receive relationship between New York City and Albany ensures these impending challenges will never be fully addressed. While the state’s direct contribution is only a portion of the overall $4 billion package, it is still money that could benefit New Yorkers statewide today while simultaneously pushing New York City’s fiscal challenges further down the road. Our state isn’t getting any cheaper under Gov. Hochul’s affordability crisis. While families across New York are struggling with rising grocery bills, rent, utility costs and local tax burdens, Albany should be focused on long-term affordability and fiscal stability for the entire state, not another short-term fix for New York City’s budget problems.

New York was once a global economic magnet. But “financial capital of the world” is not a title guaranteed forever, especially when state leaders continue relying on Albany to help patch over New York City’s recurring fiscal problems. Helping keep the lights on in the city that never sleeps is a pretty heavy ask. We should be focused on passing a responsible state budget that works for everyone—Upstate, Downstate and everywhere in between.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 19 Canalview Mall, Fulton, NY 13069 and by email at [email protected]. You may also find me, Assemblyman Will Barclay, on Facebook or X at @WillABarclay.

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