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NYC Mayor Mamdani races to finalize budget amid $1.7B savings demand
New York City Mayor Zohran Mamdani has less than a week to release an updated spending plan for the coming year. That's a tall task when, for the third year in a row, the state is weeks late in approving its own budget, leaving a multibillion-dollar question mark for the city.
Given that uncertainty, Mamdani's administration has begun discussing whether to delay his executive budget past its May 1 due date, according to two sources familiar with the matter, who were granted anonymity to describe the private talks. That postponement would need to be approved by the City Council.
The state's April 1 budget deadline is structured so that local governments know how much aid they will get from Albany when they compile their own budgets for the next fiscal year. Michaelle Solages, who chairs the state Assembly's Committee on Local Governments, said the delays have fueled increasing concern from localities across the state, many of which face a May 19 deadline to approve their school budgets for the school year that begins in September.
"They don't know the full funding they're going to be receiving from the state of New York, so they're just going to have to make estimates," she said. "It's really stressful."
This year's dragged-out Albany negotiations are especially problematic for New York City given its $5.4 billion budget gap through next year, which Mamdani wants the state to help close through a mix of tax hikes and increased aid.
Mamdani's executive budget will revise the preliminary plan he released in February and will serve as the basis for a final round of public hearings and negotiations with the City Council before a July 1 deadline. Mamdani's executive budget has outsize importance this year, since he has said it will detail the $1.7 billion in savings that he ordered city agencies to find starting in January.
Ana Champeny, vice president for research at the Citizens Budget Commission, said a modest delay could help make the city budget process more transparent. If the mayor released an executive plan that failed to account for the latest state actions, the ensuing process would be based on outdated documents that would give the public little insight into the real numbers driving negotiations.
"While there is merit to sticking to the schedule, delaying a week to 10 days seems very reasonable," she said. "Having the additional information would make for a much better budget process and set of hearings."
The mayor's office did not respond to questions by publication time, and a spokesperson for City Council Speaker Julie Menin declined to comment. City Council bills must be "aged" for seven days, not including Sundays, before being voted on, although mayors can waive that rule by issuing a so-called message of necessity.
Former Mayor Bill de Blasio released late executive budgets in 2014 and 2015, but all plans since then have been released on time. Last year, then-Mayor Eric Adams released an on-time executive plan on May 1 even with the state budget still undecided - but the city was making no comparable push for a major state bailout.
The city's fiscal picture has already changed since Mamdani released his preliminary budget in February. Hochul agreed to support a pied-à-terre tax on second homes that she said will raise $500 million annually for the city - although many details, such as the tax rates, remain unclear. Meanwhile, Mamdani has seemingly dropped his threat to raise property taxes if the state does not kick in more revenue, which Menin had called a non-starter.
The state budget may also add new costs to the city. Governor Kathy Hochul and legislative leaders are discussing a union-backed proposal to boost the pensions of some government workers that could cost the city $328 million annually, under one version of the plan.
It's unlikely that Mamdani will get anything close to the $5.5 billion in revenue - including through hikes on the city's personal income and corporate tax rates - and $2.3 billion in aid and cost shifts that he has asked for. But a group of unions and progressive groups are still pushing for more action on taxes.
While it's possible that the state could tie up its budget by May 1, it seems increasingly unlikely. Assembly Speaker Carl Heastie told reporters on Wednesday that fiscal issues were not even being discussed yet, since budget talks are still centered on policy issues such as Hochul's push to rein in auto insurance costs.
"We have not gotten to money," Heastie said.
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