Retiring Greens MP Jamie Parker, who has comfortably held onto the former Labor stronghold of Balmain for more than a decade, says the tactic was lamentable.
"Labor has been caught out trying to buy votes for a tax-payer funded political slush fund," he told reporters on Wednesday.
"These grants fail the most basic of integrity measures: there's no public advertising, they're negotiated in secret ... they're absolutely disgraceful".
A campaign manager for Labor candidate Philippa Scott allegedly offered $20,000 to Leichhardt Public School P&C from a local community grants program, with the funding contingent on a Labor win.
It would have contributed to a solar energy project at the school, the Sydney Morning Herald reported.
Labor's Daniel Mookhey rejected the claim, saying there was no such thing as a Labor community grants program.
"They are not grants. They are election commitments and they will be honoured regardless of whether or not a community chooses to vote for us or not," he said.
The Greens are hoping candidate Kobi Shetty can maintain the minor party's grip on the seat on March 25.
Labor believes Balmain is a winnable seat and insists it will win majority government and not have to rely on the Greens for support.
But Greens MP Jenny Leong believes the political winds have shifted and voters are frustrated with both major political parties.
"It's all well and good for (Labor leader) Chris Minns to say he's not going to negotiate ... but we have seen the NSW crossbench grow and all of the polls suggest the crossbench will continue to grow," she said.
"The days of majority politics are over. The community wants to see us working collaboratively."
Mr Parker said the "blatant pork-barrelling" in his seat compelled him to call Labor out on it but insists the coalition government needs to go.
The Greens are also making a push regionally in flood-affected seats such as Ballina and Lismore hoping to mirror electoral success at a federal level.
Thousands of displaced residents have found it difficult securing accommodation competing with short-term holiday renters driving prices up which the party wants to regulate in order to manage the ongoing rental crisis.
"Our region has been the belly of the beast for the disastrous impacts of short-term holiday letting but now it's adding fuel to the rental crisis across the entire state," Greens MP for Ballina Tamara Smith said.
The party wants short-term holiday rentals used as emergency accommodation during a natural disaster and to implement a bed tax to fund local services.
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