Return State Funding to New York City

New York City runs on the labor, entrepreneurship, and cultural dynamism of its people. At the heart of that engine are Latino communities, helping power not just the city’s economy, but the economy of New York State as a whole. Yet rather than invest in Latino communities and our city as a whole, New York State too often caps revenue, and doles out cuts and cost shifts that put more strain on working people. Today, as New York City faces a $5.4 billion budget gap, the State must return the resources we need to rebuild our city’s fiscal health. 

That starts with taxing the rich and ending the drain of city resources to the state. 

For too long, our city has been systematically underfunded by New York State. New York City sends far more in tax revenue to Albany than it receives in return — leaving the city to shoulder rising costs for public services, infrastructure, and social programs. This imbalance has only deepened over time. In 2010, the state cut funding for an aid and incentives to municipalities program in just one city — New York City — and never restored the funding. That decision will deprive our city of $400 million in funding just this year. 

The bleeding doesn’t stop there. Over time, the state has limited reimbursements for adult shelter expenses, resulting in a shift of $500 million in costs onto the city. It has slashed foster care aid by $327 million; cut food and housing assistance for low-income families by $193 million; cut $65 million in rental assistance support, and offloaded roughly $480 million in new MTA costs onto New York City. Taken together, these policies represent billions of dollars in cuts and cost displacements that hurt working-class New Yorkers.

Considering our city’s central role in sustaining the state’s economy, the state’s growing cost shifts and funding cuts are impossible to defend. Today, New York City contributes 54.5% of state revenue, but we only receive 40.5% back. In 2022 alone, our city sent $68.8 billion in revenue to Albany, but only received $47.6 billion back – a gap of $21.2 billion dollars. There can be no doubt: New York City — and the communities who make it run — are the driving force behind New York State’s economy. Yet time and again, we are treated less as a partner worthy of investment and more as a piggy bank to be raided at will.

Meanwhile, the state also restricts New York City’s ability to raise its own revenue because only

the state can decide to raise taxes on the wealthiest New Yorkers and corporations. This is an untenable state of affairs in a moment defined by stark inequality — where unprecedented wealth exists alongside deep and persistent poverty. 

We must be able to tax the ultra-wealthy who have benefited the most from our economy, to invest in housing, education, transit, and public safety for our communities. The consequences of Albany’s constraints on our city’s economy have become impossible to ignore. New York City faces a $5.4 billion budget gap, inherited from former Mayor Eric Adams’ fiscal mismanagement, while the state sits on a $10 billion surplus. Additionally, Trump’s One Big Beautiful Bill Act handed New York’s millionaires a collective $12 billion tax cut last year, or around $129,600 per millionaire per year. If state leaders are serious about shared prosperity, it must correct this inequity by returning resources to the city and increasing our revenue through taxes on the rich and corporations.

Working people deserve investment from our state. When Albany underfunds New York City, Latino families and all our neighbors pay the price – with overcrowded housing, under-resourced schools, and fewer City services and programs. Investing in our communities is not just a matter of fairness; it is an investment in the future of the entire state. If New York is to remain a place of opportunity for all, the state must help close the city’s budget gap by taxing the rich and ending the drain.

Claire Valdez is an assembly member