DAYS THE BUDGET IS LATE: 42
ZO, THAT’S IT? For months, Mayor Zohran Mamdani has pressed the case that Albany must raise income and corporate taxes to help plug New York City’s $5.4 billion budget deficit.
So in rolling out an executive budget today that closes the gap without his favored state-level tax hikes, Mamdani made a significant concession, showing he did not, in fact, need the increases from Albany to shore up his spending plan.
When Playbook asked whether that means he’s throwing in the towel on his push for income and corporate tax increases, Mamdani signaled he’s content with the commitments he’s already secured.
“I’ve been very open and honest about my vision, whether it be fast and free buses, or whether it be higher personal income taxes on the wealthiest New Yorkers or the most profitable corporations — this budget is a reflection of that vision in its tax on the rich,” Mamdani said.
Mamdani was referring to the pied-à-terre tax Gov. Kathy Hochul and legislators in Albany have committed to enacting as part of this year’s badly overdue state budget. The tax, which impacts owners of secondary homes in the city worth more than $5 million, is expected to generate $500 million in new annual revenue for the municipal coffers.
That’s a far cry from the $9 billion in fresh revenue the democratic socialist said his income and corporate tax increases would annually produce during last year’s mayoral race.
Still, Mamdani offered nothing but praise for Hochul when asked today whether he’s a little bit disappointed that she hasn’t conceded any ground on those fronts. “I see this as a win,” he said at City Hall. “And I do want to thank Gov. Hochul for her partnership. It is a partnership that reflects a commitment to the long-term health and vitality for the city.”
A close Mamdani supporter echoed his sentiment — but added a caveat.
“What we heard from the mayor today signals that between the governor and New York City, the deal is done and they have reached the goals that they are going to accomplish this year,” Jasmine Gripper, director of the New York Working Families Party, told Playbook. “But nonetheless, the fight doesn’t die.”
Gripper’s comment opens the door to 2027, when Mamdani may have a better shot at convincing Hochul to push through his preferred tax hikes.
Locked in a reelection race against Republican Bruce Blakeman, Hochul has been consistently reluctant to support tax increases this year. As long as she’s reelected to a second full term in November, the governor may be more inclined to back tax hikes in 2027, when the pressures of a competitive reelection contest aren’t looming.
A Hochul spokesperson declined to comment on 2027 considerations. And a spokesperson for Mamdani didn’t comment on what his 2027 plans are vis-à-vis tax priorities in Albany.
Mamdani’s executive budget this year indicates he will be in dire need of new revenue streams from Albany next year.
The budget gap the city faces for fiscal year 2028 stands at over $7 billion, budget documents released today show. The gap for fiscal year 2029 is even larger, topping $9 billion, according to the new projections.
Without additional intervention from the state next year, closing such exorbitant outyear gaps could prove difficult for the young democratic socialist — unless he shifts gears to further trim spending.
Gustavo Gordillo, a co-chair of the New York City chapter of the Democratic Socialists of America, made clear his group will continue pressuring Hochul to get behind higher taxes on the wealthy to stave off future municipal service cuts.
“Closing the deficit was challenging. We did it. That’s an actual victory showing that socialists can govern,” Gordillo said. “But to deliver the full affordability agenda we will need a governor who stands with working New Yorkers instead of billionaire donors to make the rich pay what they owe.” — Chris Sommerfeldt and Joe Anuta
From the Capitol
BLAKEMAN WINS CASE ON MATCHING FUNDS: An Albany County judge has blocked an attempt from Democrats to deny GOP gubernatorial candidate Bruce Blakeman access to $3.5 million in campaign matching funds.
Blakeman was booted from the program in March after the Democratic majority on the Public Campaign Finance Board concluded he never filled out a nonexistent form identifying his running mate. Justice Denise Hartman concluded today that maneuver was “arbitrary and capricious.”
“Blakeman registered his campaign and certified compliance with the Program, attended mandatory training, publicly identified their joint-ticket, and submitted certified amended filings 11 days before the filing deadline,” Hartman wrote. “Yet he received no notice that the PCFB considered the submissions deficient until after the filing deadline had lapsed.”
Democrats on the board said “an appeal is likely.”
Read more from POLITICO Pro’s Bill Mahoney.
UNIONS BACK PRISON REFORM: A dozen unions will soon announce their support for a pair of penal reform bills that advocates hope will be on the agenda for this year’s brief post-budget session.
Labor organizations including 1199SEIU, District Council 37 and the New York State Nurses Association are backing the Earned Time Act, which would increase options for early release credits for participation in job training programs, and the Second Look Act, which would let inmates petition for early release after a decade.
“New York is facing an ongoing labor shortage that is slowing economic growth and straining industries across the state,” the unions wrote in a letter to state leaders. “Hundreds of thousands of jobs remain unfilled, even as thousands of New Yorkers are locked out of the workforce due to long prison sentences and limited access to programs that would allow them to earn release.”
Lawmakers are facing the likelihood they’ll have only two weeks to deal with post-budget issues before adjourning for the summer. But the Center for Community Alternatives’ Katie Schaffer was optimistic these measures might have some momentum, noting that state Sen. Jeremy Zellner’s decision today to cosponsor the Second Look Act means it’s now supported by a majority of his chamber. — Bill Mahoney
STRIKING A DEAL — The Metropolitan Transportation Authority’s Long Island Rail Road and five unions threatening to strike are only at odds over the fourth year of a three-year contract.
The last contract expired three years ago. The unions and the MTA have already reached a deal on the retroactive pay for those years, but remain apart on the fourth year, which begins this summer, according to people familiar with the sensitive negotiations on both sides of the table.
In public, the union’s last offer was a 5 percent pay increase, while the MTA’s was about 3 percent.
At one point, the MTA looked for changes to work rules, which critics of the unions say are arcane and overly generous. Now, the MTA has moved on to looking for one-time lump sum payments as an alternative to salary increases in the fourth year. The advantage to the MTA is that one-time payments aren’t reoccurring, but the unions want a built-in pay increase and cite ongoing inflation.
The unions said they are continuing to prepare for a strike and that no “contract talks” were scheduled today, though a formal bargaining session is scheduled for tomorrow.
“We are having discussions today,” MTA spokesperson John McCarthy told POLITICO today. — Ry Rivard
SEEKING A ZYN WIN: Some form of a tax on nicotine pouch products like Zyn is expected to be included in a final state budget deal.
A coalition of private sector groups — including The Business Council of New York State — is trying to shape the details.
The business organizations are pushing state lawmakers and Hochul to adopt a 67-cent flat, unit-based tax as an alternative to the original proposal, which would place a 75 percent wholesale tax on the products. The groups wrote in a letter to the governor and top state legislators that their proposal will still prevent those under 21 from accessing the products and curtail an illegal market.
“It is a proven tax structure that keeps adult consumers purchasing through legal, taxed, and regulated channels, minimizes illicit trade, and preserves enforcement safeguards,” they wrote. “Importantly, it also provides stable and reliable revenue without importing the community and youth harms that accompany illegal markets.” — Nick Reisman
GRAND JURY SUBPOENA: NYU Langone received a grand jury subpoena last week requesting six years of information on patients under 18 who received gender-affirming care and the medical staff involved, according to an online disclosure.
Several other unnamed institutions received the subpoena, NYU Langone said in the notice. Under New York’s shield laws, local health care organizations must report subpoenas or requests for information regarding legally protected health activities to the state attorney general’s office.
“We understand that these developments may be concerning to our patients, providers, and others,” the health system wrote in the notice. “Please know that NYU Langone takes the privacy of your protected health information very seriously and we are evaluating our response to the subpoena.”
The subpoena by the U.S. Attorney’s Office in the Northern District of Texas, which was first reported in the newsletter Erin in the Morning, indicates federal prosecutors empaneled a grand jury to weigh potential criminal charges. Federal agencies reportedly subpoenaed NYU Langone and Mount Sinai last year demanding information on care for transgender minors.
NYU Langone shuttered its program for transgender youth earlier this year, citing the current regulatory environment. — Maya Kaufman
FROM CITY HALL
THINKING ABOUT THE UNTHINKABLE — New York City Police Commissioner Jassica Tisch told a ballroom of civic leaders this morning that the city remains a terrorist target, especially this summer, with a series of “major international events, enormous public gatherings and historic commemorations,” including the World Cup and America’s 250th birthday party.
“New York City is not only a global hub, it is a global target,” she said during a breakfast hosted by the Association for a Better New York.
Tisch said that “what begins overseas often finds its way here,” alluding to the war with Iran, the Oct. 7, 2023 attacks in Israel and emerging warfare strategies involving drones. She also mentioned domestic threats and lone actors.
What she didn’t go into is how a terrorist attack could scramble the political picture in New York City and affect the perception of her boss.
“An attack will always be exploited by the Mamdani derangement crowd, but I think a lot of it would depend on where it comes from,” said Richard Flanagan, a professor at the College of Staten Island, who wrote a book on challenges facing mayors.
Maki Haberfeld, a professor at the John Jay College of Criminal Justice, said if an attack comes from a Muslim group or individual inspired by ISIS, “It will be a huge liability for him because of who he is, being the first Muslim mayor of New York City.”
Basil Smikle, a Democratic strategist and political analyst, said Mamdani would be criticized in the same ways he was during his campaign, as young and progressive. And Mamdani, unlike Rudy Giuliani, who was praised after the 9/11 attacks, hasn’t had years in public life building a reputation around law and order. The information and political environment is also different now.
“That is a big difference from 2001 to now. You didn’t have the access to alternative viewpoints in the way you do now,” he said.
Right now, Flanagan sees Mamdani, in part because he kept Tisch on as head of NYPD, as balancing the law-and-order coalition and his own base, which looks for police reforms. “It’s a fine line and he’s walking it,” he said. — Ry Rivard
IN OTHER NEWS
— DYNAMIC DUO: President Donald Trump defended Mamdani on a conservative talk radio show Tuesday, calling him a ‘nice guy,’ but he criticized his proposed second-home tax, warning it could drive the rich out of the city. (POLITICO)
— NOT-SO-NICE SUNSET: The presence of federal immigration enforcement agents in New York City is impacting immigrant-majority neighborhoods like Sunset Park, where nearly 80% of businesses reported a decrease in sales and foot traffic. (Gothamist)
— FEES ON NOTICE: The New York senate is pushing to pass consumer protection bills that go after deceptive business practices, including surveillance pricing and junk fees. (Spectrum News)
