By Josephine Stratman
New York Daily News
(TNS)
NEW YORK — Gov. Kathy Hochul announced a handshake deal Thursday on a $268 billion state budget that includes a controversial pied-à-terre tax on second homes in New York City aimed at bringing more money to city coffers amid a multibillion-dollar city budget deficit.
The purported state budget deal, which comes after a five-week delay, includes funding for childcare in the five boroughs and a slate of immigration measures intended to push back against the Trump administration, the governor said.
Hochul said that the final details will be worked out “within a week,” but Assembly Speaker Carl Heastie disputed the governor’s claim of an agreement.
“There’s no budget deal,” Heastie told reporters in Albany.
“There’s so many open issues on money … We signed off on nothing major,” Heastie added. “This is what I’m telling y’all is wrong with this process. I’m saying this to y’all very clearly: I am never doing this again. Budgets are supposed to be about money, not policy.”
A key factor in the state budget talks was how much aid would go to New York City. Mayor Zohran Mamdani has lobbied the state for months for helping closing the city’s estimated $5.4 billion budget gap. In efforts to put pressure on Albany, he sounded the alarm about a fiscal crisis and threatened to raise local property taxes.
The budget does not include the corporate or income tax hikes Mamdani has pushed for in spite of resistance from Hochul. A Pass-Through Entity Tax credit reduction both Mamdani and Council Speaker Julie Menin threw their weight behind was also a non-starter.
“I held through to what I said,” the governor said.
It’s still unclear, with a final state spending plan still in the works, how much more money the state will be sending the city’s way.
The governor was also expected to deliver additional financial help or delay the class size mandate for schools, a rule that budget experts have said costs the city at least hundreds of millions of dollars, though she did not mention either at the Thursday announcement.
Mamdani, at an unrelated appearance in Brooklyn on Thursday, said he was hopeful that the state budget would deliver the help the city needs but that he was waiting on details.
“We are seeing that there are still a few more things to be discussed and agreed to in that state budget negotiation, but we are hopeful as to the direction of that conversation and the progress that we’ve been seeing over the last few days and weeks.”
With the state budget stalling, city lawmakers pushed back a budget deadline. The mayor’s next budget proposal is due Tuesday.
Mamdani, a democratic socialist, campaigned on raising taxes on the city’s millionaires and billionaires as well as some corporations—but Hochul viewed those ideas as a nonstarter and has emphasized the city should find savings in its own $127 billion budget.
“I’m not going to mince the words: The negotiations were not easy,” Hochul said. “They 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.”
The budget is slated to include $15 billion in reserves, which Hochul lauded as a “pretty impressive” accomplishment given the Trump administration’s attacks on federal funding.
The pied-à-terre tax, which would place a surcharge on the most expensive second homes in New York City, was one of the final areas of uncertainty in budget negotiations, which stretched weeks beyond the April 1 deadline. Hochul has insisted it would rake in $500 million annually for the city, although she said Thursday the details have still not been worked out.
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One hang-up in the talks about that tax was how to determine the values of the homes it will impact. It’s unclear how exactly that number will be calculated, as the city uses a “rather bizarre” assessment process that significantly undervalues luxury homes, Hochul said.
Hochul called this year’s budget negotiations “unusual,” given the particular focus on the city: “This is the first time that we’ve been so immersed in helping them solve their budget problem.”
The “general agreement” reached by the state doesn’t offer specifics on any new funding the city’s K-12 schools, with her budget director, Blake Washington, telling reporters during a Q&A that the state legislature was considering different variables.
“We’re very invested in helping particularly the high-needs communities,” Hochul said.
Hochul spoke about the child care money she pledged to the city in January, new youth online safety laws that block direct messages from unknown adults to minors and disable AI chatbots and restrict location-sharing for youngsters under 18 were also included.
The budget also includes an expansion of the governor’s free community college initiative.
— With Cayla Bamberger
Photo caption: New York Gov. Kathy Hochul discussed key state budget proposals during a press conference on April 28, 2026. (Kathy Hochul/YouTube)
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©2026 New York Daily News. Visit at nydailynews.com. Distributed by Tribune Content Agency LLC.
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