Mayor Zohran Kwame Mamdani and Speaker Julie Menin today called on Albany to help close New York City's multi-billion dollar budget gap for the 2027 Fiscal Year, urging New York State to finalize its budget that delivers the City's fair share of funding.
The Mayor and Speaker stood united in City Hall to urge the Governor and legislature to significantly increase City revenue in the State budget, including by reducing New York City's Passthrough Entity Tax (PTET) credit to generate nearly $1 billion. As Albany leadership continue to negotiate their FY2027 Enacted Budget, the Mayor and Speaker agreed to pass a budget extender through May 12 to ensure New York City's FY2027 Executive Budget can incorporate the State's final budget decisions.
The Mayor and Speaker voiced joint support for reducing the New York City Passthrough Entity Tax (PTET) credit to 75%. The 2017 Tax Cut and Jobs Act limits taxpayers' ability to deduct state and local taxes from federal income tax. The New York City PTET allows pass-through businesses to restore this lost deductibility by paying a New York City business tax that is 100% rebated to business owners. The State could allow New York City to reduce this rebate to 75% to generate nearly $1 billion in additional revenue, while still allowing New York City residents to save on federal taxes.
The Mayor and Speaker also highlighted the importance of working together to reach agreements on savings within the City budget - announcing their joint support for restructuring Pension Unfunded Liability, as well as class size mandate relief, which together would save New York City over $1 billion. No current or future retiree would lose a single dollar in pension benefits as they are constitutionally protected by the New York State Constitution.
The Mayor and Speaker urged their partners in Albany to end the drain of City resources to the State, a long-standing practice that has shifted billions of dollars in City revenue to Albany. State cost shifts have sharply increased the City's financial burden, including the elimination of AIM funding; restrictions to the Adult Shelter Cap, adding approximately $500 million in costs; and significant reductions in foster care aid, and support for low-income families. Additional cost shifts, including roughly $480 million in MTA costs, have further strained the City's budget.
Today, New York City contributes 55.6% of state revenue, but receives only 41.7% in return. At the same time, the City remains the engine of economic growth for the entire state. Between 2010 and 2024, the City's economy more than doubled, growing 110% , compared with 68% growth in the rest of the state.
"New York City is facing a generational fiscal deficit, and it's going to require serious, good-faith partnership across every level of government to meet this moment. I'm glad to stand with Speaker Menin and leaders in Albany as we work to deliver a budget that reflects the needs of all New Yorkers," said Mayor Mamdani. "If we're serious about putting our city back on firm financial footing, we cannot rely on short term fixes. A structural crisis demands a structural solution. That's why Speaker Menin and I are calling on Albany to reset its longstanding fiscal relationship with the City and amend the Passthrough Entity Tax Credit. Today it serves as a tax cut for the rich; a reduction would ensure the wealthiest pay their fair share."
"Mayor Mamdani and I are partners in delivering a responsible budget for New Yorkers, and we're committed to closing the gap," said Speaker Menin. "We are aligned on identifying real savings, maintaining the services New Yorkers rely on, and making clear that New York City deserves its fair share from Albany so we can continue investing in our communities. We will continue that partnership to produce a balanced and fiscally responsible budget."
