Full Breakdown
NYC Leaders Seek State Aid by Targeting Pass-Through Tax Credit Amid Multi-Billion Budget Gap
5/1/2026, 6:53:00 PM
The Push to Trim the PTET Credit
Mayor Zohran Mamdani and City Council Speaker Julie Menin asked New York State to cut the city’s PTET credit from 100 % to 75 %. They estimate the change would raise $1 billion, a key part of a plan to close a $5.4 billion budget gap. Approval moved the mayor’s executive-budget deadline from May 1 to May 12, citing the state’s delayed budget.
Background & Data
The PTET credit, created after the 2017 Tax Cuts and Jobs Act, lets pass-through businesses pay a city tax that provides a full rebate. 95 % of credits go to filers over $1 million; the Fiscal Policy Institute reports 91 % to millionaires and 61 % to those over $10 million. The city contributes 55.6 % of state revenue and receives 41.7 % back.
Official Statements
Mayor Mamdani called the PTET credit “a tax cut for the rich” that must be reduced to meet the city’s obligations. Speaker Menin stressed a responsible budget. Governor Hochul rejected the proposal, saying “We’re not changing PTET” and calling it a personal-income-tax increase. State officials cited the $1.5 billion pledged and a pending pied-à-terre surcharge. The governor noted the state has already provided $4 billion in assistance.
Criticism
Partnership for NYC President Steven Fulop warned that cutting the credit could undermine small- and mid-size firms. Gristedes CEO John Catsimatidis said the change would affect professionals and small-business owners. Citizens Budget Commission president Andrew Rein called the proposal an “unnecessary distraction” that could alienate residents and businesses and deter investment.
Conflicting Reports
Sources differ on PTET benefit distribution: Mamdani cites 95 % of credits to filers over $1 million, while the Fiscal Policy Institute reports 91 % to millionaires and 61 % to those over $10 million. The gap is $5.4 billion in some statements and $12 billion in others. No PTET reduction legislation enacted, leaving $1 billion revenue uncertain. Timing of any PTET amendment remains unclear.
Verbatim Quotes
- “New York City faces a budget crisis of historic magnitude,” — Zohran Mamdani, Mayor, joint press conference.
- “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,” — Zohran Mamdani, Mayor.
- “More than 95% of PTET credits go to those making more than $1 million a year,” — Zohran Mamdani, Mayor.
- “If we're serious about putting our city back on firm financial footing, we cannot rely on short term fixes,” — Zohran Mamdani, written statement.
- “We are standing together today, we will stand together again,” — Zohran Mamdani, Mayor.
- “we’re not changing PTET,” Hochul said.” — Kathy Hochul, Governor.
What’s Next
The city will monitor the May 12 deadline while lobbying Albany for the PTET cut and additional aid. State lawmakers are reviewing the proposal alongside a pending pied-à-terre surcharge expected to generate $500 million. Final decisions on the PTET reduction and any further funding are anticipated as the state budget approaches its June 12 finalization.
