NEW YORK — Mayor Zohran Mamdani announced a $124.7 billion executive budget proposal Tuesday, a plan that leans on deferring pension fund payments for city employees and a boost in school aid from Albany to help close New York City’s multibillion-dollar budget gap.

The budget, which comes in more than $2 billion less than his preliminary plan, does not includes a property tax increase and does not draw down from the city’s reserves — measures the mayor previously said he might have been forced to take.

“I see this as a win, not just for our administration, but for the city of New York,” Mamdani said at a budget briefing. “A win to ensure that the city is back on firm financial footing, and it’s doing so by taxing the rich, by creating a fair relationship with Albany, by finally accounting for the mismanagement we’ve seen in prior years and embarking on a new chapter of an approach to budgeting that is honest and that is actually building for long-term stability.”

Ahead of the budget announcement, the mayor and governor announced a $4 billion worth of cash and savings aimed at closing the budget gap, with more than half coming in the form of a pension restructuring. Mamdani touted Gov. Kathy Hochul’s help in closing the gap.

The $4 billion includes state-approved savings measures, including $2.3 billion in pension restructuring, and more than $500 million in class size relief. The pension restructuring plan would revamp city’s nearly $10 billion in annual pension payments, according to the mayor’s office — which would mean extending the deadline for the city to meet its long-term pension obligations past from 2032 to 2037.

Changes to the city’s pension funds would need to be approved by the five pension systems, which include representatives from unions. The Police Benevolent Association and Police Pension Fund said they had not agreed to the mayor’s new plan.

The $4 billion also includes projected revenues from the previously announced pied-à-terre tax on luxury second homes, which officials still not have released details on but said the city is set to reap $500 million every year from, and $150 million in additional school aid.

A property tax increase for NYC residents, part of Mamdani’s initial budget proposal, has proven politically unpopular and is not included in the budget plan.

Mamdani declared victory on his promise to tax the rich through the pied-a-terre tax, but that surcharge is a far cry from his campaign trail promises of raising income and corporate taxes on the city’s wealthiest residents and corporations. Hochul has stood firmly against those proposals.

“We had a productive meeting with Mayor Mamdani on the Executive Budget, and we appreciate that the Administration has moved toward an approach championed by the Council that identifies savings and avoids raising property taxes or raiding reserves,” Council Speaker Julie Menin and Finance Chair Linda Lee said in a joint statement, adding they were “pleased” with Hochul’s help in balancing the books.

City Comptroller Mark Levine praised the mayor’s nixing of the property tax increase and rainy day funds pull in a statement, though he also raised concern about a reliance on one-time savings infusions and called for more funds to be added to the reserves.

“I commend Mayor Mamdani for putting forward an Executive Budget proposal that is significantly improved over the February plan,” Levine said.

The budget plan was originally due May 1, but that deadline was pushed back due to state budget delays. Next, the council will host a series of hearing before the final budget must be passed before the end of June.

Tuesday’s budget plan also restored funds not included in the mayor’s previous budget plan, including $31.7 million to libraries and $25 million to fair fares.

Mamdani has lobbied the state for more aid over the past several months, including by calling a fiscal crisis and declaring the city would be facing a whopping $12 billion budget gap. That estimated budget gap shrank weeks later to $7 billion, then again to $5.4 billion.

“For years, the relationship between City Hall and Albany has been defined by dysfunction and infighting,” Mamdani said in a statement. “Governor Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve. We have partnered through every step of this process to protect the fiscal health of our city.”

Mamdani thanked the governor several times during his budget announcement.

“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 in a statement.

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