New York City Mayor Zohran Mamdani and City Council Speaker Julie Menin have agreed to delay the May 1 deadline for the mayor’s executive budget proposal while addressing the city’s $5.4 billion budget gap, Politico reports.
In a joint announcement, Mamdani and Menin will call for increased state budget aid and modifications to the state’s pass-through entity tax (PTET), which is expected to generate an additional $1 billion in revenue, according to The City’s Katie Honan.
The proposed changes include:
- Seeking more state aid through the Aid and Incentives for Municipalities (AIM) program
- Adjusting the PTET to boost revenue
- Extending the budget deadline beyond May 1 due to the late state budget
"Due to late state budget, per sources — katie honan (@katie_honan) April 28, 2026
The PTET is a voluntary state tax that certain businesses can pay, offset by state income tax credits for owners. A Manhattan Institute brief by E.J. McMahon notes that nearly all PTET beneficiaries are millionaire income earners, making it a prime target for Mamdani’s tax-the-rich agenda.
Mamdani campaigned on raising taxes on high-income earners and large corporations to fund new spending. However, New York City lacks the authority to unilaterally increase income or corporate taxes—state approval is required. Governor Kathy Hochul has opposed city-led tax hikes but proposed a $5 million annual tax on second homes worth over $5 million.
The proposed PTET changes aim to generate revenue without broader income tax increases. Yet, the city’s fiscal challenges persist. The Citizens Budget Commission, a fiscal watchdog, estimates the budget gap could swell to $10 billion in the coming years.
Persistent deficits and rising costs of existing programs mean recurring revenue scramble. Analysts warn that over-reliance on taxing the wealthy and businesses risks driving them out of the city. New York City’s millionaires—less than 1% of tax filers—currently pay 37% of the city’s income taxes.
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