Gov. Kathy Hochul is directing another $1.5 billion in state funds to New York City, offering a financial boost to Mayor Zohran Mamdani as he urges Albany to raise taxes on the wealthy.

Hochul announced Monday that the state will provide $1 billion for the current fiscal year and an additional $500 million for the next. The infusion arrives as the democratic socialist mayor faces a looming budget gap ahead of his first spending plan; a major challenge for a new administration that pledged billions in new public benefits.

Mamdani previously sparked concern after warning of a $12 billion deficit he said was left behind by the Eric Adams administration due to under-budgeting. But his team walked back that projection two weeks later, revealing the shortfall was at least $5 billion smaller because officials failed to include $7.2 billion in end-of-year tax revenue, largely tied to Wall Street bonuses.

Still, Mamdani has continued pressing Hochul and lawmakers to impose a 2% tax increase on New Yorkers earning $1 million or more. Hochul has repeatedly resisted the idea, with insiders pointing to the political risks of embracing a tax hike in an election year.

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

Mamdani welcomed the financial support, saying he was “heartened” by the governor’s decision. “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,” he said.

The mayor is scheduled to present his 2026 and 2027 fiscal plans on Tuesday, both of which must be balanced.