Mayor Zohran Mamdani is urging the City Council to approve an extension of the city budget as he seeks additional funding from Albany. The mayor’s new tax proposals have stalled, leaving him to look for alternative financial solutions, The Post has learned.
According to insiders, City Council Speaker Julie Menin, who has been critical of the mayor’s expansive budget, has agreed to the extension. However, this agreement is contingent on Mamdani identifying areas to cut costs and address the nearly $6 billion budget shortfall.
The mayor’s appeal to the council comes with the hope that Governor Kathy Hochul and other state legislators will alleviate some of New York City’s financial burden. He is advocating for the suspension of mandates on class sizes and the reallocation of certain state funds, as discussed by sources familiar with the negotiations.
Menin shares Mamdani’s concerns on these issues and has been lobbying behind the scenes in Albany to secure additional funding for the city and ease the impact of state mandates.
Both Mamdani and Menin also support a proposal for a pass-through entity tax credit, which could potentially generate $1 billion annually. They plan to advocate for its approval in Albany, according to sources.
Throughout the budget discussions, Menin and Governor Hochul have maintained a united front, insisting that City Hall identify savings within its substantial $127 billion budget and rejecting proposals to raise income and corporate taxes.
Insiders said the governor’s pitch for a pied-à-terre tax, an added levy on high-end second homes expected to bring in $300 to $500 million annually, was offered as an olive branch so he could spin it as a victory in his “Tax the Rich” agenda.
She also already gave Mamdani an early windfall with funding to the tune of $1.5 billion to create a pilot program for 2K and early childcare services.
The City Council, which released its own budget last month with no taxes, will still have to vote to allow Mamdani to miss his May 1 deadline.
That vote is slated for Thursday.
Up north, Albany lawmakers approved another extender on Monday for the state budget, which was 27 days late.
When Mamdani rolled out his initial budget, the socialist mayor tried to force Hochul’s hand to increase taxes on the state’s highest earners by threatening New Yorkers with a nearly 10% property tax bump to fill the $5.4 billion gap if she didn’t come through.
But the gov has repeatedly shut down that idea.
The political gambit is identical to the 2014 negotiations — the last time the executive budget was late — when then-Mayor Bill de Blasio made a failed attempt to “Tax the Rich” while Andrew Cuomo was governor.
De Blasio also threatened property owners with a tax increase during those budget negotiations, but ended up finding a way to balance his executive budget without the hike or additional revenue from the state.
At the time, Mamdani’s first deputy mayor, Dean Fuleihan, was Blaz’s budget director.
City Hall has also floated drawing down the Big Apple’s savings account, pulling from other funds and even delaying pension payments.
The plan to burn through its savings triggered the four big credit agencies to sound the alarm with investors, with three warning it would downgrade the city’s bond rating.
A downgrade would affect the city’s borrowing power and ability to refinance outstanding loans, costing taxpayers millions of dollars each year.
A source with knowledge said there is expected to be an announcement by Mamdani on Tuesday.
