Historically the Big Apple as international financial, tourist and economic epicenter, has provided tax revenue to New York State amounting to trillions of dollars.
Currently, New York City provides the 55.6% of state income, but receives only 41.7% in return. Between 2010 and 2024, the local economy more than doubled, expanding by 110%, compared to 68% growth in the rest of the state.
In the real context, in which the municipal administration faces a budget deficit of 5.4 billion dollars that compromises the financing of social programs, Mayor Zohran Kwame Mamdani and the President of the Council, Julie Menin, This Tuesday they expressed a joint position to urge the government and the state legislature to intervene in the resolution of said financial gap.
The call of both leaders, who have not been aligned on many points this yearwas clear: that certain tax schemes that involve charging more taxes to the rich be reviewed, so that they are allocated to the city of New York “the fair share of the financing that corresponds to it.”
For his part in interview with the publication Politico, Jen Goodman, spokesperson for the state government suggested that the state president has already done enough to help the City balance its books, citing an injection of $1.5 billion in direct aid, an increase in funding for child care and a commitment to implement a tax on children this year. pied-à-terre (second homes) of high value.
In fact, Governor Kathy Hochul this same day, before local media, made it clear that she will not make any review What happens is raising taxes on New Yorkers.
“That’s not going to happen. “I think it is very clear that we have already helped them, and I wanted to do it with enough advance notice so that they were clear about the resources they could count on from the state,” he added.
“We deserve more”
New York leaders demanded to significantly increase the city’s revenue in the state budget, this includes reduce New York City’s Pass-Through Entity Tax (PTET) credit to generate nearly $1 billion.
The mayor and the municipal president expressed their joint support for the reduction to 75% of this New York City tax credit.
“If we truly want to return our city to a strong financial position, we cannot rely on short-term solutions. Therefore, we call on Albany to redefine its historical fiscal relationship with the City and modify the PTET. Today, this serves as a tax cut for the rich, a reduction would ensure that the wealthiest pay their fair share,” Mamdani said.
The New York City PTET allows pass-through entities (inch-via entities) to recover this lost deductibility by paying a business tax, which is 100% reimbursed to the owners of the companies.
The specific proposal of the ruler of the Big Apple is that the state could allow the municipality to reduce this reimbursement to 75%, to generate nearly $1 billion in additional revenue.
More than 95% of PTET credits go to people who earn incomes of more than $1 million annually. More than 80% benefits those who earn more than $5 million a year.
“Let’s wait”
As state legislators continue to negotiate with Governor Kathy Hochul on the fiscal year 2026-2027 budget, the mayor and the leader of the municipal chamber agreed to approve an extension until May 12 for the plan of expenses and investments of the same fiscal period, to ensure that final state budget decisions can be incorporated.
“Mayor Mamdani and I are aligned on identifying real savings, maintaining the services New Yorkers depend on and making a clear statement that the city deserves its fair share from Albany so we can continue to invest in our communities. “We will continue with this alliance to develop a balanced and fiscally responsible budget”pondered Julie Menin.
Both officials highlighted the importance of working together to reach agreements on savings within the City budget, announcing their joint support for restructuring unfunded pension liabilities as well as relaxing the class size mandate, measures that would save more than $1 billion.
It is clarified that no retiree would lose a single dollar in pension benefitsas these are constitutionally protected by the New York State Constitution.
Likewise, the possibility of increase property tax.