Hochul Provides $1.5B Bailout to NYC After Mamdani's Tax Hike Pleas

The governor committed $1B this fiscal year and $500M next year to help the new mayor's budget shortfall.

Published on Feb. 17, 2026

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Governor Kathy Hochul is providing a $1.5 billion bailout to New York City to help address the financial shortfall facing the new administration of Mayor Zohran Mamdani. Mamdani had been pushing for tax hikes on the wealthy to cover the budget gap, but Hochul has resisted that proposal, citing potential political fallout. The governor is instead committing $1 billion this fiscal year and $500 million next year to stabilize the city's finances.

Why it matters

The bailout highlights the ongoing tensions between the new progressive mayor and the more moderate governor, as Mamdani seeks to implement his agenda of increased spending and taxes on the wealthy. Hochul's move is seen as an attempt to maintain a productive relationship with City Hall while also avoiding a political fight over tax hikes in an election year.

The details

Mamdani had initially warned of a $12 billion budget hole left by the previous administration, but his team later admitted the gap was at least $5 billion smaller due to underestimated tax revenue. Despite this, Mamdani has continued to push for a 2% tax hike on New Yorkers making over $1 million. Hochul has resisted this proposal, with insiders saying she is wary of the political fallout in an election year.

  • On February 16, 2026, Governor Hochul announced the $1.5 billion bailout for New York City.
  • The $1 billion in funding is committed for the current fiscal year, with an additional $500 million set aside for the next fiscal year.

The players

Kathy Hochul

The Governor of New York who is providing the $1.5 billion bailout to New York City.

Zohran Mamdani

The new Mayor of New York City who is facing a budget shortfall and has been pushing for tax hikes on the wealthy to cover the gap.

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What they’re saying

“A strong New York City means a stronger New York State. This investment protects services and puts the city on stable financial footing. 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.”

— Kathy Hochul, Governor of New York (nypost.com)

“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.”

— Zohran Mamdani, Mayor of New York City (nypost.com)

What’s next

Mamdani is set to lay out his 2026 and 2027 fiscal plans on Tuesday, which must be balanced budgets.

The takeaway

The bailout highlights the ongoing political tensions between the new progressive mayor and the more moderate governor, as they navigate the city's budget challenges. While Hochul is providing financial assistance, she has resisted Mamdani's calls for tax hikes on the wealthy, likely due to concerns over the political implications in an election year.