NEW YORK CITY — Gov. Kathy Hochul committed $4 billion in state funding on Tuesday to help close a $5.4 billion gap in New York City's $124.7 billion executive budget unveiled by Mayor Zohran Mamdani. The agreement balanced the spending plan without drawing down reserves, increasing property taxes, or cutting services.

Mamdani had threatened to impose a nearly 10% property tax hike and drain the city's reserves to close the projected gap. The mayor's executive budget instead relied on a package of state aid, pension payment adjustments, and projected new revenue.

"This is what a results-driven, responsible partnership looks like and I'm proud to work with Mayor Mamdani to deliver for working New Yorkers," Hochul said. She added: "Today, we are 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."

Hochul agreed to provide $1.4 billion in fresh funding for city programs over the current fiscal year and the one beginning July 1, including $600 million for youth initiatives and $202 million for families of public safety officers who die in the line of duty. The state will cover half of the city's line of duty death benefits for families of first responders, totaling $101 million per year for two years.

The governor is allowing the city to extend the period over which public pension contributions are made, a change expected to save $1.6 billion in the upcoming fiscal year and delaying $2.2 billion in city pension plan payments. The state also delayed a mandate for maximum school class sizes, counted as $508 million in state support, and Hochul claimed $361 million in "other actions," which were not immediately clear. The bailout included $202 million in actions to offset recurring spending obligations.

The executive budget pencils in $500 million in annual revenue from a yet-to-be-finalized pied-à-terre tax on luxury second homes, contingent on state permission. City Comptroller Mark Levine questioned that figure. "The revenue estimate is roughly $200 million too high," he said.

Levine also raised concerns about the pension changes and future deficits. "If you refinance your home and then spend the money, that's not saving," 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 said.

Mamdani's presentation projected $368 million in savings from improving the efficiency of public services and $947 million from improving financial management. The Department of Education is expected to save $149.5 million this fiscal year and $922 million next year through cost containment. The Department of Sanitation plans to cancel a battery disposal program to save $353,000, and the Department of Veterans' Services plans to cut veteran events to save $60,000.

The budget had not been published online as of 5 p.m. on the day of its unveiling.