CBC says Mamdani’s budget is ‘honest’ but short-sighted

Added: 2026-05-17

[00:00:01][music] >> You're watching Pix on Politics Daily with Dan Mannarino.

[00:00:09]Hey everybody, this is Pix on Politics Daily. I'm Emily Rahal filling in for Dan Mannarino. Today we are again talking about the budget. Mayor Eric Adams yesterday released his executive budget. It takes us one very big step closer to getting a final adopted budget for the fiscal year 2027.

[00:00:30]This budget is balanced at 124.7 billion dollars thanks in large part to Governor Kathy Hochul who yesterday announced a new $4 billion in aid in the form of delaying school class size mandates, things like that, cost sharing on different fees that the city has been paying over recent years.

[00:00:57]As a reminder, the city was facing a $5.4 billion budget gap.

[00:01:02]Adams is celebrating that that's been closed.

[00:01:05]In addition to the state funding, there has also been a huge amount of savings from city agencies, reductions of vacant jobs.

[00:01:15]It's a lot, there's a lot going on here, still a lot of sticking points, you know, where we landed on taxes. There's going to be no increase to property tax, Adams says, which is something he threatened at the preliminary budget. So to break it all down, we're going to bring in Ana Champeny. She's the vice president for research at the Citizens Budget Commission and she's going to be able to kind of get us into the weeds a little bit here what are the big changes in this executive budget and what they might mean for the city. Thanks so much for joining us, Ana.

[00:01:45]Thanks so much for having me. Can we do a kind of top level look at this budget?

[00:01:51]What are the broad strokes, the most important pieces of this budget for you and how it was balanced.

[00:01:58]Sure. So, the executive budget, as you said, is $124.7 billion. It is balanced as required by law. Um and it is a much more accurate presentation of what the city's responsibilities are. This is one of the big improvements that the mayor has done um in sort of being honest with New Yorkers about how much it costs to deliver city services. Um but on the other hand, he has balanced it and it is balanced um in large part with one-shots and gimmicks, which is concerning. We have uh solved the problem for today, but not for the long term and haven't really addressed some of the structural challenges.

[00:02:38]Um you know, what we have said is New York City has a spending problem, not a revenue problem. Um and we really need to be focusing on how to shrink spending that is not delivering for New Yorkers.

[00:02:50]Yeah, absolutely. I heard very similar concern um yesterday that kind of bringing up that these are short-term, relatively short-term solutions. Can we break down some of those solutions? You guys in your statement yesterday mentioned a couple specifically. You mentioned pension funds. Um I want to talk a little bit about what is happening with the pension, um why that required state approval, and why you guys are saying that just kind of kicks the can down the line.

[00:03:20]Sure. So, the change in in pensions that we're talking about here has to do with when the city makes their payments and contributions to the pensions. Um there have been a lot of other conversations about Tier 6 and pension benefits. This is not about uh that. This is about allowing the city to basically stretch out its payments. Um there was a an agreement back in 2012 that the city would fully fund um and make these catch-up payments, and they were supposed to be spread out over 20 years.

[00:03:50]The last payment would have been due in 2032.

[00:03:53]Now, the state is allowing the city to spread that out probably about another 5 years out to 2037. What that means is we don't make the payment this year, next year. We have some budgetary savings, but we make it in the future. So, it's not really a reduction in spending. It's just a delay.

[00:04:12]And it basically asks future New Yorkers to pay for budget balancing today. And that's not fair.

[00:04:19]Yeah, and a similar thing is happening on the class size mandate as well. We don't have details on exactly what that delay or extension is going to look like, but same thing. We we will still have to meet those class size mandates, which is going to be very expensive, but just maybe over a longer period of time now.

[00:04:37]Yeah, the the class size mandate is very costly. I think, you know, on the [clears throat] operating side, it'll be at least 1.7 billion dollars is what the city has estimated to fully implement that.

[00:04:50]You're right. We are missing a lot of details. The state budget itself is not done. So, we haven't seen a lot of the specifics. So, we are dealing with general sense of what is happening.

[00:05:03]But, it looks like we're pushing out some of the targets. And goal post for the city gives them a little bit more time, but ultimately the city will still end up spending money on class size reduction in high performing schools. And that is not really the best use of resources. And and we have called for the class size mandate actually to be repealed rather than delayed. And again, delayed just simply means the bill comes due a couple years later instead of today.

[00:05:43]I want to come back to some of those things [music] that you you see as opportunities um for better management of the budget, but before we go there, I want to talk a little bit about what you see as the consequence of kicking these things down the road. Um the controller mentioned yesterday that though the the budget is balanced for a fiscal year 26 and 27, there's still a pretty significant gap in those years past, um begging the question, you know, are we just going to end up in the same spot next year dealing with this budget gap I think is estimated to be over 6 billion for 2028 um and then bigger in 2029. Can you kind of talk about the consequence that you guys see of moving some of these things later and what we're going to be dealing with in those years past?

[00:06:29]The out year gaps are very large. Um you're right, they swell to close to 10 billion dollars by fiscal year 2030 um >> [clears throat] >> and they will be even larger when we get past that and some of these bills come due that we've been talking about like the pensions.

[00:06:45]Um so it is there is very little doubt that we are going to be in the same situation next year. The solutions have not been as I said structural. Um you mentioned at the beginning, there are spending reductions, but they are not nearly large enough to really address the problem. Um the you know, pension stretch out buys us a couple years. There were some accounting maneuvers and and so forth that, you know, relieved the city of $1.2 billion dollars this year. That's kind of something that you can do once every few years, but it's not going to be there um next year and so the city will need to come back with more spending cuts.

[00:07:27]The possi- the opportunity I guess is that we have time. It takes time to really dig into agency budgets and figure out how to be more efficient and how to save money and make sure the services are high quality.

[00:07:39]Uh and so it would be positive that the the chief savings officers that mayor has appointed, it's the right approach and they should continue to dig and look for more and more opportunities.

[00:07:52]So, that when we are looking at 28, 29, we've you know, identified more opportunities to shrink spending.

[00:08:00]Are there any kind of obvious missed opportunities that you guys see?

[00:08:06]Places that you see right now as big opportunities for saving that for whatever reason are not being pursued.

[00:08:14]One area that we have talked a lot about has to do again with schools and school enrollment. So, New York City has lost over 160,000 students in the last decade.

[00:08:25]School enrollment continues to shrink.

[00:08:27]There was a recent report from the school construction authority projecting that enrollment declines will continue.

[00:08:34]We have lots of very small schools. We have schools that are well below capacity. There is a lot of opportunity to right-size and reallocate within [clears throat] the DOE that should be pursued. These are difficult policies because you talk about closing schools, merging schools. It's it's very sensitive for the kids and the and the parents, but important to tackle. One of the increases in spending in the executive budget was actually $350 million to hold schools harmless for enrollment declines. And that's really the wrong approach. Rather than add money for schools where the enrollment is shrinking so that they don't see any funding cuts, we should be unwinding that policy and that's one prime missed opportunity.

[00:09:21]Yeah, we heard the same thing from Controller Mark Levine yesterday, too.

[00:09:25]That's something he's been kind of repeatedly calling for.

[00:09:29]We don't have too much time left, but before we go, I do want to touch on the tax wins for Mom Donny here. Um, the pied-a-terre tax and now kind of we're talking about the city council's um, proposal of the UBT credit. Um, can you walk us through those two proposals and kind of who they're affecting and what kind of money is on the table?

[00:09:52]Sure. The pied-a-terre tax is expected to generate about $500 million. Again, we don't have specifics from the state, but it is a surcharge or a tax on uh, high-value real estate, high-value homes over $5 million that are not the primary residence of the owner. So, the target really is wealthy non-New York residents who own real estate in the city. Um, you know, this [clears throat] is likely to have some uh, shockwaves through the luxury real estate market that the city needs to consider. Uh, and send the signal, you know, on the one hand, they're non-residents, they don't pay New York City taxes. On the other hand, these are individuals who come to the city, spend a lot of money when they're here, and don't really consume a lot of city services.

[00:10:38]Um, so I think it's important to keep both pieces in mind.

[00:10:42]Uh, the UBT is the unincorporated business tax. It's a tax that the city levies on partnerships, sole proprietorships, uh, you know, uh, different kinds of businesses. It's rare. Um, most states and localities don't have a tax like this. Uh, but because the income is taxed both at the entity, at the unincorporated business, and then again at the individual's personal income tax, uh, there can be some double taxation.

[00:11:09]And there is a credit here. And so, the idea is we're going to reduce the credit and increase the tax liability that these individuals pay. Um, you're largely talking about partners in, you know, law firms, for example, accounting firms, things like that, professional and business services. So, these are again, uh, high-income uh, New Yorkers who are going to be seeing their uh, personal income taxes increase. Right.

[00:11:36]And as I understand it, the credit would be reduced from 23% to 15%, which is the state level. Is that correct?

[00:11:44]Um, I believe so. That is the reduction. Uh, again, we haven't seen the the legislation or the details and uh, the city believes that this is a policy change that they can implement locally without going up to Albany. Um, you know, one of the challenges the mayor faces is that um, tax policy for the city is largely set by the state. Um, and he has very little flexibility uh, to implement policies. Absolutely. Thank you so much for breaking this all down for us, Ari. You've been really helpful.

[00:12:13]All right, thank you. It was a pleasure.

[00:12:15]And that's going to be all for Picked on Politics Daily today. Uh, we'll be back again tomorrow, [music] same time.

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