The Overview

New York City and the state’s counties can keep putting spare tax money into a wider mix of safe, short-term investments for three more years, under a law Gov. Kathy Hochul (D) signed June 26. That money is cash the governments hold until bills come due, and the extra choices help it earn more interest in the meantime. Without the new law, the permission would have run out five days later, on July 1. ​

New York City’s budget office asked for the bill, writing in its memo to lawmakers that the wider choices bring “higher yields on its investments, without a significant increase in risk.” Sen. Monica Martinez (D-NY) sponsored it in the Senate, and Assemblyman Phil Ramos (D-NY) requested it in the Assembly. It passed without a single no vote: 128-0 in the Assembly on May 29 and 60-0 in the Senate on June 4.

What The Law Does

The new law, Assembly Bill 11358, pushes back the end date of a 1998 state law from July 1, 2026, to July 1, 2029. Most local governments are limited by state investment rules to bank deposits and bonds from the U.S. or New York governments, but that older law lets New York City do more. The city can also buy top-rated bonds from other states, short-term loans to highly rated companies and banks, certain federal agency bonds and some money market funds, with no more than $250 million tied up in any one company, bank or agency.

Counties got the same choices under a 2021 law, on the same timeline. The law also keeps a smaller option open for every town, village and school district: with approval from the state’s top financial officer, they can buy the short-term IOUs other local governments issue while they wait for tax money to arrive.

What’s Next

The wider choices now last until Sunday, July 1, 2029, and anything bought before then keeps its current rules. Lawmakers have renewed this permission every few years, most recently in 2017, 2020 and 2023, according to the Assembly’s bill memo. If they don’t renew it again, the city and counties go back to the shorter list everyone else uses.

What’s at stake is interest. New York City expected to earn about $350 million in interest during its 2026 budget year, roughly $41 per resident, according to its spring 2025 financial plan and Census Bureau population figures. The law doesn’t change how much anyone pays in taxes, only how hard that money works before it’s spent.

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