(The Center Square) — New York City Mayor Zohran Mamdani and Council Speaker Julie Menin have reached a deal to delay the city’s budget as they seek more funding from Albany lawmakers.
The Democrats announced Tuesday that the city’s budget deadline has been moved up by nearly two weeks to May 12 to give the city more time to figure out how to close a projected $5.4 billion revenue gap without raising taxes. It also comes as the state’s $260 billion annual budget is nearly a month late amid behind-the-scenes negotiations over taxes, immigration and other thorny policy issues.
“This adjustment reflects a very simple reality,” Menin said in remarks. “New York state has not yet finalized its budget, and until they do so, we do not have the necessary clarity to responsibly complete the city’s budget.”
Under New York City’s charter, the mayor’s executive budget is due on May 1, but with state budget negotiations in Albany tied up, Menin said it was “prudent” to delay the city’s spending package.
Both renewed calls on Gov. Kathy Hochul and Albany lawmakers to provide more financial support for the city by approving a state budget that “significantly” increases revenue to the five boroughs.
“Despite being the economic engine of the state, the city sends billions to Albany each year and sends more than it receives in return, and we finally must address this imbalance,” Menin added.
The mayor and council speaker on Tuesday called on lawmakers to approve a temporary rollback of a tax break for business owners known as the Pass Through Entity Tax, or PTET, credit. The move would drum up an estimated $1 billion in new revenue, they said.
“We are not calling to eliminate the credit,” Mamdani said. “We are rather asking the state for a modest reduction from 100% to 75%.”
But Hochul swatted down the idea of changing the PTET credit at a press conference later that day, telling reporters, “It’s not happening.” The governor also questioned whether the city needs to delay its budget.
“We don’t have to be done in order for you to do yours,” Hochul told reporters. “We’re on different timetables.”
Menin also pitched plans to ease the city’s class-size mandate and delay pension payments to generate more revenue to plug the budget gap, both of which are likely to face pushback from labor unions.
Mamdani rolled out his preliminary $127 billion budget in January that called for fulfilling a campaign pledge to raise taxes by 2% on millionaires and increase the combined corporate tax rate to just over 22% to reduce a budget deficit and foot the bill for his lefty agenda. He has also threatened to increase property taxes across the board in New York City unless Albany lawmakers approve his controversial plans.
But Mamdani has clashed with Menin and other members of the City Council over its budget, which nixes his plan for higher taxes and tapping the city’s reserves to reduce the shortfall.
