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Mayor Zohran Mamdani joined forces with City Council Speaker Julie Menin to try to squeeze more dough out of Albany — a plea that an increasingly peeved Gov. Kathy Hochul rejected Tuesday.
Hochul was forced to answer questions about forking over more money to help bail out the Big Apple shortly after the lefty Mamdani and moderate Menin called to peel back a tax credit as the city struggles to fill a projected multibillion dollar budget gap.
The governor claimed she was turning the tap off, but political insiders questioned if her stance was firm after she has already appeased the democratic socialist mayor and the “tax the rich” crowd with a new proposed levy on pricey second homes in the city.
“I think it’s crystal clear that we already have helped them,” Hochul said during a press briefing while state lawmakers are still working to iron out a deal for its own spending plan nearly a month after the budget deadline.
Mamdani and Menin also clamored for the state to cut down the Pass-Through Entity Tax (PTET) credit (PTET) from 100% to 75%, which appeared to be a non-starter for Hochul.
Mamdani and Menin confirmed they agreed to extend the deadline for Mamdani to propose his first ever executive budget from Friday to mid-May as the pair demanded their “fair share” from the state — and called on Hochul to reduce the PTET credit for two years in hopes of raising about $1 billion in revenue.
“As we await the state’s adopted budget, we also want to reiterate our prior calls on Albany to deliver its fair share for New York City,” Menin said.
“Despite being the economic engine of the state, the city sends billions of dollars to Albany each year and sends more than it receives in return, and we finally must address this imbalance.”
Mamdani said the city needs a “structural reset” in its funding relationship with state leaders while arguing the PTET credit mostly favors residents earning more than a $1 million a year.
The two have been at odds over how to close a $5.4 billion hole – with Mamdani pleading for more taxes while Menin claimed departments could trim their spending.
The proposed change would cut companies’ ability to write off taxes paid to the government, but Hochul bluntly said it’s not happening. The credit program was created in response to the Trump administration capping SALT deductions during his first term with the stated goal of offsetting the change on the federal level.
“We’re not changing the PTET,” she said, clearly aggravated by the ask.
She also argued city leaders were wrong to blame the state’s late budget for their own delayed budget process and again insisted the city needs to identify savings.
Hochul has refused to entertain raising taxes on the richest New Yorkers and corporations, but reversed course on her no-new taxes pledge in an election year by proposing a pied-a-terre tax on second Big Apple homes worth more than $5 million that would generate about $500 million.
She has also committed to sending $1.5 billion in direct aid and another $1.2 billion for child care, as well as school funds and the pied-a-terre surcharge.
Political operatives told The Post the badgering from the top two city leaders puts Hochul in a tough spot.
“Hochul will delay scaling back a tax credit that benefits the wealthy for as long as she can because those are her big primary and general election donors,” consultant Ken Frydman predicted.
“Of course, she’d then risk a primary challenge from a far-left, Democratic socialist for not taxing the rich to help Mamdani close his budget gap.”
Another Democratic operative called the back-and-forth “all theater.”
“Hochul might not give them this but she’ll agree to some one-shot stuff the legislature adds in addition to what she’s already agreed to so she doesn’t get singled-out,” the politico, said while taking a swipe at Menin for pushing the PTET tweak.
“Menin also knows that she can’t avoid unpopular cuts without new revenue — and that making the state the villain for not providing more revenue so far an insurance policy to be able to blame them later,” the operative said.
“But of course pass through limit is also bad policy. Hurts self-employed professionals and small business owners—not just hedge fund owners or whatever.”
Menin included the PTET proposal in the City Council’s budget response to Mamdani’s $127 billion preliminary spending plan, but has not been vocal about the change.
The Upper East Side pol threw the tax credit reduction into the council’s plan in an effort to appease the lefties on the governing body and knowing Hochul would never go for it, sources said.
“They already knew where Zohran was and Hochul already caved. You had a lane that all your own, why did you move” a biz insider said.
NYC Partnership CEO Steve Fulop said in a statement that Menin pushing for the tax credit cut is a “misstep” that Hochul won’t entertain.
“That said, it’s an unnecessary distraction that doesn’t serve Julie well, given the strong leadership image she’s worked hard to build,” he said.
Andrew Rein, president of the Citizens Budget Commission, also slammed the tax proposal that would risk alienating residents and businesses.
“The best way to close this budget gap is to make the government efficient and stop spending that doesn’t improve New Yorkers’ lives,” he said.
A spokesperson for Menin stood by the proposal, saying that 95% of PTET payments are made by filers earning over $1 million. The change would bring New York in line with neighboring states such as Connecticut and Massachusetts, the spokesperson said.
“Speaker Menin has said from the start that we must focus on savings and efficiencies to close the budget gap,” the spokesperson stated. “On April 1st, the Council released its plan identifying nearly $6 billion in savings, and today’s announcement highlighted the importance of working together to reach agreements on those savings.”.
Additional reporting by Carl Campanile
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