NYC Leaders Unite to Seek State PTET Cut and Delay Budget

Mayor Zohran Mamdani and City Council Speaker Julie Menin announced a joint plan to ask the state to cut the Pass-Through Entity Tax (PTET) credit from 100 % to 75 %, a change they say would raise roughly $1 billion for New York City. They also agreed to postpone the mayor’s executive budget deadline from May 1 to May 12, citing the state’s month-late budget. The joint plan also marks the first executive budget delay since 2015.

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The city faces a $5.4 billion budget gap that the mayor says cannot be closed without additional state aid. Earlier commentary cited a $12 billion shortfall under the prior administration, showing divergent estimates. Governor Kathy Hochul’s budget is nearly a month late; she has already provided $1.5 billion in direct aid and proposed a pied-à-terre surcharge expected to raise $500 million annually. State Senator Andrew Gounardes suggested broader progressive revenue options to address the gap.

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The PTET reduction would shift revenue from a credit that benefits high-earning New Yorkers to city services, potentially averting a property-tax increase. The budget delay, the first since 2015, highlights the city’s reliance on state aid and raises political stakes for Governor Hochul’s upcoming re-election.

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Governor Hochul’s office emphasized existing aid, noting that the state has already committed a multi-billion-dollar package for the city. Deputy Senate Majority Leader Mike Gianaris called the pied-à-terre plan “good, but not enough.” Assembly Speaker Carl Heastie said the delay would be “helpful for the City Council to reconcile where they are.”

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Hochul rejected the PTET proposal, arguing that it would amount to a tax increase on residents. Some legislators support broader progressive revenue but have not committed to altering the PTET, leaving the proposal without a clear path.

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• “The mayor and City Council need to work together, identify savings, and close the remaining gap.” — Jen Goodman, Governor Hochul spokesperson

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• “We are standing together today, we will stand together again,” — Mayor Zohran Mamdani

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• “It’s not happening … we’re not changing PTET,” — Governor Kathy Hochul

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• “We need new revenue, and we need a structural reset in our relationship with the state.” — Mayor Zohran Mamdani

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The mayor’s executive budget is slated for release on May 12, pending the state’s budget finalization. Lawmakers will debate the PTET cut in upcoming negotiations, while the governor maintains opposition. Additional aid requests, including restoration of the Aid to Municipalities program and school funding, remain under discussion.

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