Mayor Zohran Kwame Mamdani: As I have said for the past three months, New York City faces a budget crisis of a historic magnitude. We inherited a deficit larger than any since the Great Recession. Years of mismanagement and chronic underbudgeting, alongside a structural imbalance between what New York City sends to the state and what we receive in return, have taken a toll. We cannot close this deficit with savings alone. We need new revenue. And we need a structural reset in our relationship with the state. That is the only way to meet our legal obligation to pass a balanced budget, and to do so without imposing a financial burden onto the backs of working people.
I'm glad to partner with Speaker Menin as we call upon Albany and deliver a balanced budget. Together, we are extending the executive budget deadline from this coming Friday until May 12, because a crisis of this scale cannot be solved without state action. I want to be clear: We are not simply asking others to act. New York City is doing our part. We are committed to governing with the fiscal responsibility this moment demands. Speaker Menin and I have already identified meaningful savings, and we will continue that work, carefully, deliberately and without cutting the services that New Yorkers rely on. But we cannot do it alone. That is why we are standing together this morning to underscore what is at stake, and to call on Albany to deliver additional revenue. One way to do exactly that is for the state to reduce the Pass-Through Entity Tax Credit, or PTET, from 100 percent to 75 percent. Both the administration and the Council have called for this over the course of this budget process. And we have done so because the PTET is essentially a loophole that allows high-income earners to reduce their federal tax burden. Who benefits? Millionaires and multimillionaires. More than 95 percent of PTET credits go to those making more than $1 million a year. More than 80 percent go to those earning more than $5 million a year. The PTET, in short, is a tax cut for the rich.
We are not calling to eliminate the credit. We are rather asking the state for a modest reduction from 100 percent to 75 percent. That change alone will generate nearly $1 billion in additional revenue. Revenue we can invest in the buses that carry New Yorkers to work, the public schools that educate our children, [and] the public parks and beaches where we spend our summers. And Speaker Menin and I will work with our partners in Albany to address the imbalance that has long characterized the relationship between our city and our state. New York City generates more than 55 percent of state revenue but receives less than 42 percent in return. That gap is not sustainable. And if we fail to close it, crises like these will become a routine occurrence.
I will end with this. The scale of this crisis is clear, but so too is the path forward. I am grateful to Speaker Menin for her partnership, to Assembly Speaker Carl Heastie, State Senate Majority Leader Andrea Stewart-Cousins and Governor Hochul in Albany for the support that they have provided us thus far. And when it comes to Governor Hochul, our gratitude is for that partnership that we have. Together, we have secured full funding for the first two years of universal 2K to the tune of $1.2 billion, restored over $500 million in recurring funds to repair years of cuts and cost shifts, and won an additional $500 million in one-time aid. And with the pied-à-terre tax, we are creating a new sustainable revenue stream that will bring in at least $500 million each year, so we can keep investing in the people and communities that make this city what it is. We have made progress over these last months, and we can reach the end of this budget process without imposing the heaviest burden on the working New Yorkers who have carried this city for far too long. Thank you. Now, I'd like to invite Speaker Menin to share a few words.
Speaker Julie Menin: Thank you, Mr. Mayor. Good morning, everyone. So, we are here today to announce that we have reached an agreement, as the mayor said, to move the deadline for the executive budget from May 1 to May 12. This adjustment reflects a very simple reality: 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. It is far more prudent to take the time to finalize a fiscally responsible budget than to rush one based on incomplete information. As we await the state's adopted budget, we also want to reiterate our prior calls on Albany to deliver its fair share for New York City. Despite being the economic engine of the state, the city sends billions of dollars to Albany each year and sends more than it receives in return, and we finally must address this imbalance. We greatly appreciate the work of Governor Hochul, Speaker Heastie and Senate Majority Leader Stewart-Cousins for their additional support that they have given the city throughout this budget cycle. However, as the mayor said, New York City has been contributing over 55 percent of the state's revenues yet only receives 42 percent of its total expenditures.
New York City must get the resources it needs to succeed, and we are aligned on that point. As I said in my testimony in Albany during Tin Cup Day and in various communications since then with state leaders, New York City's budget is increasingly strained both by federal decisions that reduce funding and prior state decisions that shift the cost onto localities. These pressures truly undermine our capacity to keep the city affordable and to invest in long-term stability. When the Council released our response to the mayor's preliminary budget proposal on April 1, we had in our proposal an adjustment to the PTET credit, particularly for filers with an adjusted gross income over $1 million. That adjustment would align New York City with other states such as Massachusetts and Connecticut, who have lower credits of 90 percent and 87 percent respectively, which would create a more sustainable and equitable ecosystem, and it would simply be a temporary reduction for a few years. As also indicated in our preliminary budget response, we need significant funding from Albany to support compliance with New York's class-size mandate. We've been speaking about this for months.
It's an obligation imposed by the state, and it must be properly funded. The state government should also restore Aid and Incentive Funding to Municipalities' (AIM) for New York City. Halting AIM funding began as a temporary measure during the Great Recession, but has never been restored, costing us over $400 million a year - a point that we've been making time and time again over the course of this budget negotiation. At the same time, we are not solely waiting on Albany to act. The mayor and the Council are continuing to work together to reach agreements on savings within our own budget. On April 1, the Council released our response. It had a long list of savings, and we are taking a meticulous look at areas where we can reduce costs, such as bloated DOE consulting contracts and so many other items that we've been talking about. And we can tighten controls around inefficiencies and doing so without in any way impacting essential services. I want to be clear about our ultimate goal. Every decision we make is with New Yorkers in mind, and Albany is an essential part of that solution. Because we are all committed to delivering a budget that meets the needs of everyone who calls our great city home. Thank you.
Question: Earlier today, Ken Griffin had a conference in Oslo. He said that your singling came out in the video about the pied-à-terre tax and it's created with a "profound lack of judgment. And what upset me was the personal attack." And he's planning to meet with Governor Hochul on Thursday, presumably to discuss pied-à-terre tax and other taxes. Do you have any response to those remarks about you this morning in Oslo? And have you been invited to this meeting with Governor Hochul?
Mayor Mamdani: We are looking at a fiscal deficit, the likes of which the city has not seen since the Great Recession. And we are looking at this deficit in the wealthiest city in the wealthiest country in the history of the world. It is a deficit that comes at a time where one in four of New Yorkers are living in poverty. And we are talking about changes to our system of taxation that would ensure the wealthiest among us pay a little bit more so that everyone can afford to live in this city. And when it comes to the pied-à-terre tax, it is a proposal that would increase the fees on secondary homes of non-resident New Yorkers that are valued at more than $5 million. We are speaking about a very select subset of properties in this city and of those who own property in this city. And when it comes to what the speaker and I are here today to announce, our support of PTET, that is, again, a tax credit that applies to a very select group of New Yorkers, with 95 percent of recipients of that tax credit earning more than $1 million a year, and 80 percent earning more than $5 million a year. These are the kinds of steps we have to take to ensure that this is a city that can deliver for each and every person who calls it home.
Question: [Inaudible.]
Mayor Mamdani: No, the Governor has her own meetings. I have my own. Sometimes we also meet together.
Question: The Governor's office said that they still have not gotten language from you on the pensions amortization and on class-size funding, and that that has contributed to this budget delay. So, why haven't you sent that language yet? And if I could also just quickly ask the speaker, I know you called for PTET in your budget response, but you also had said the budget gap could be closed without, you know, separate from that, the gap could be closed without those kinds of revenue measures. So, is this, does this represent any kind of a shift in your thinking?
Mayor Mamdani: So, I'll go first on the first question. I'll [then] pass it over to the speaker. When it comes to the restructuring of the city's pension liabilities or when it comes to the class-size mandate, these are both conversations that we are having with our partners in organized labor, and we're having it with them to develop this language and put it forward. We're confident of the productivity of those conversations. And I'll also say, when it comes to the restructuring, this does not affect any New Yorker's pension. This is something that simply would determine the timeline by which we would reach the full funding of these pensions. The city already funds these systems at more than 86 percent. We are talking about the timeline by which we reach 100 percent - not if, but when. And when it comes to class-size, I'm proud to have been a legislator who voted for that legislation when I was in Albany. And I'm proud that alongside our City Hall, with our chancellor, we are committed to the fulfillment of this legislation, and now we are working with our partners to ensure that it's on a timeline where New Yorkers can look to it as something they can actually depend on.
Speaker Menin: Thank you, Nick, so much for that question. No, it's not a shift. In our over 50-page budget response, we included billions of dollars of savings, everything from, as I mentioned, DOE savings around bloated consultant contracts, to debt savings, to airport revenue, a number of different outside-of-the-box ideas, to really focus on inefficiencies and waste without in any way cutting services. On the revenue side, we listed a number of different revenue raisers, the PTET being one of them. The idea of bringing the PTET, as I said, in line with what Connecticut and Massachusetts are doing. In addition, we had revenue raisers around additional speed cameras. We had a number of revenue raisers in there. So not a shift at all, it's an iteration that we need additional help, that we really want to focus on something that I included in my testimony around Tin Cup Day, which is whether it's AIM funding, whether it's the class-size funding. We are being asked again and again in the city to take care of these items, and we really need to put the city on an equal footing, given that we're providing 55 percent of the revenue and yet receiving much less than that back.
[Crosstalk.]
Mayor Mamdani: I'll just add one more point before we go to Morgan, which is just to echo the speaker's point. We're talking about structural solutions for structural crises. What the speaker just mentioned about the imbalance between what the city contributes to the state and what it receives in return, this is a historical imbalance, one over many years. And what we're looking to do today and every day over the course of this budget process is to put the city back on firm financial footing. We inherited a fiscal crisis the likes of which New Yorkers had not seen since the Great Recession. And this is a crisis that demands not short-term fixes, but the kinds of fixes that ensure we don't return back to this place next year. Reducing the PTET credit, as the speaker said, to be in line with other states in the region is one aspect of how we can work with Albany to ensure that we're delivering the same services that we deliver today, and we're balancing the budget without putting it on the backs of working-class people.
Question: So, I just wanted to ask, Hochul released a statement saying delays in the city budget are a choice, and the mayor and the City Council need to work together to identify savings. It came off a bit strong. I feel like there's a little bit of a disconnect between you and the governor. I'm just wondering, did you tell the governor about this push, and especially this push against her budget being so late. And at the same time, some top legislative leaders are also sort of questioning and pushing back against giving the city more aid after already allocating quite a bit of money to the city. So just, I guess, what are your conversations with legislative leaders? Are you getting a sense that they're agreeing with you guys?
Mayor Mamdani: I'll say that, yes, I spoke with the governor yesterday before we moved forward with today's press conference to let her know about the fact that we had reached an agreement of extending our own budget process, and that we would be calling upon the state to reduce the PTET tax credit. And the speaker and I are here working together to speak about not only our commitment to savings, but also our belief that there is no amount of savings that will absolve Albany from the partnership that's required to get all of us to a balanced budget by the end of this process. And I want to recognize the fact that the governor, legislative leaders, they have been partners in this process.
The governor, as I shared in my earlier remarks, we're talking about commitments, not just in terms of the proposal of a pied-à-terre tax that would lead to half a billion dollars in additional revenue, but also in the restoring of funding that had otherwise been stripped from the city. We're talking about billions of dollars that have been helpful to us getting to this point. However, we inherited a fiscal crisis of such scale that we are not yet at that finish line. And when it comes to your question about legislative leaders, it has been a pleasure to work with Assembly Speaker Carl Heastie, with State Senate Majority Leader Andrea Stewart-Cousins, both of whom have been champions for this city. We can see in their one-house budgets, their vision for this city is one where we are able to balance this budget, not on the backs of working people. And we're really appreciative of our continued partnership with them.
Question: My first question is to the speaker. Sources have told us that you've been talking to people in the business community and have told them that you were not supportive of the PTET change initially. So, what has changed? And then for both of you, my question is, just weeks ago, publicly you were arguing over how to close this budget. You, the mayor, called it "unrealistic," the savings plan that the Council proposed. So, what has changed, really, for both sides of City Hall?
Speaker Menin: Sure. I'm happy to address the PTET. No, the PTET has been in our proposal since April 1. What we did in our budget proposal is we offered a range of options. Obviously, we strongly believe there are inefficiencies in the city budget that we know that we can work on. And we look forward to working with the administration on that, having our teams together, which is what they're doing right now, really looking at the Council's ideas on savings and inefficiencies. We have a number of outside-of-the-box ideas on that. In terms of the PTET, again, Connecticut and Massachusetts have done this. They have a - Connecticut is at 87 percent, Massachusetts at 90 percent. So, having a suspension for a couple years is something that would bring in close to $1 billion of revenue. We had other revenue-raiser ideas in our budget as well. I talked about the red-light cameras, increasing enforcement around speeding would bring in hundreds of millions of dollars. We had all sorts of revenue-raisers in there. And so, our budget response was really to say, we think that you need a mix of different approaches. But we look forward to working on the savings. We've been talking about them for a long time, and we look forward to working with the administration on that.
Question: And then on [your] relationship right now, seemingly a compromise after publicly arguing over how to close this budget gap?
Mayor Mamdani: The speaker and I have stood together before, we are standing together today, we will stand together again. And we're committed to delivering a budget that is balanced, as per our fiscal responsibility, and one that also delivers for working New Yorkers. And I just want to underline again, for many New Yorkers, the four letters of PTET are not ones that we use in a day-to-day conversation. However, if we were to reduce this tax credit by just a quarter, as the speaker said, we would be talking about raising nearly a billion dollars in additional revenue that would be critical in our city's ability to balance this budget, and in our city's ability to deliver for those who look to us with that responsibility.
Question: A question for the speaker. If you're okay with this tax arrangement, would you be okay with other taxes increasing on the wealthy?
Speaker Menin: So first of all, the budget response that the Council does is our budget negotiating team. We have 21 members, and every single item is voted on. So, every single item we vote on. The items that you see on April 1 were all voted on by the Council. We do not control taxes, other than property taxes, where you know where my position is. So, what we try to do in our budget response is, again, focus on areas that we could control. The PTET is a tax that obviously Albany controls. It is one that the members felt very comfortable with. We are also focused on job creation in the city. We lost 20,000 jobs last year compared to each of the prior four years, where the economy grew by about 190,000 jobs. So, we really try to balance those equities. And I think what the PTET tax is, it does that. And I think that's really what our response shows, is a number of different issues.
Question: It's also going to affect a lot of your constituents, disproportionately on the Upper East Side. Are you worried about that? Is that a fair thing to make them pay more?
Speaker Menin: In terms of the PTET? So, we're looking at - what we are recommending is doing this for the next couple of years while we're in this budget crisis. We're not talking about doing it long term. We're talking about a short-term solution to this problem. We are confident that by finding a mix of savings, as we have proposed, we will be able to get there. And again, it doesn't eliminate the credit totally. It takes it down in line more with what other states are doing, and it should be done on a temporary basis. And then if it needs to be restored after two years, it's restored.
Question: Mr. Mayor, I'm wondering, given the fact that you've adopted the PTET as one of the ideas in the speaker's budget, I wonder if there are other ideas the Council has proposed that you could adopt, not only in the revenue-raising side, but in the efficiency side. And I'm asking the question because the governor in her statement today says that the two of you should work together to find savings. So, are there some savings that they've proposed that you can adopt? And what about some of the other revenue-raisers that they've proposed? Are there things that you can adopt?
Mayor Mamdani: So, I'll first just say with the PTET, we put the PTET and the reduction of that credit in a letter to Albany leaders on, I think it was about March 3, which was then promptly leaked to the New York Focus. And that was part of a menu of options that we put forward in addition to our proposals of increasing personal income taxes and corporate taxes on both the wealthiest New Yorkers and the most profitable corporations. And we believe that it's an important part of this because, again, we're talking about 95 percent of its recipients making more than $1 million a year, more than 80 percent making more than $5 million a year. And it's the kind of tax credit that we're not even discussing the elimination of, simply the reduction of by a quarter, that would make a significant difference for the city's fiscal ability to deliver for New Yorkers across the five boroughs.
We also take the question and the imperative of savings immensely seriously. Part of the reason that we are even here in the moment where we could be balancing this budget in just a few weeks as we continue this budget negotiation until the adopted budget, is because we put forward a proposal to save about $1.7 billion by finding inefficiencies, any examples of fraud or waste through our chief savings officers. And so, the Council and the administration share a commitment to finding those savings. However, what we are also clear about is the fact that there's no amount of savings we can find that would absolve Albany of the need to continue to partner with the city to deliver that balanced budget. That's what we're excited to do.
Question: Just to follow up here, [what about] some of the other revenue raisers that the Council has proposed? As Julie Menin said, you know, the red-light cameras and other things, are any of those the kinds of things that you could adopt that would help you close the budget?
Mayor Mamdani: When it comes to the enforcement of speeding cameras, those are things that we support as an administration. However, we're talking about a budget gap of billions of dollars. And so, we are here to speak about a proposal that is at a similar scale of nearly a billion dollars. It will take all of these different options. However, it will be critical to treat this crisis at the scale that it actually exists.
Question: [inaudible] from Albany, like if Albany grants you this, will [it] be the last ask, or are you looking for more aid, school aid and other things that you're looking - AIM, other things?
Mayor Mamdani: I think the speaker brought up the importance of AIM. We have seen how New York City was singled out more than a decade ago and has never received that AIM funding. If we were to have received that AIM funding since the moment it was stripped from the city, we would actually not require any additional aid from Albany. This is part of our larger request to ensure that we can balance this budget. And as the speaker said, we cannot proceed with balancing that budget without the additional revenue and cost shifts from Albany. Thank you very much.
