Title: Albany Budget Negotiations in Full Swing

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Brian Lehrer: Brian Lehrer on WNYC. The New York state budget debate got even more interesting this week when both leaders of the legislature came out in favor of Mayor Mamdani's tax hike proposals for the wealthiest corporations and individuals. Have you heard that yet? Governor Hochul remains opposed. We'll hear the arguments and the politics now from our Albany reporter, Jimmy Vielkind. We'll also ask, is it okay for a judge to call a defendant an animal? That's a question in Albany now, too. Hey, Jimmy, how you doing?

Jimmy Vielkind: Good, Brian.

Brian Lehrer: The big headline here is that the legislature is taking Mamdani's side on raising taxes. The mayor has proposed raising income taxes on those making a million or more a year by 2 percentage points and raising the top corporate tax rate from 7.25% to 11.5%. How close are the assembly and Senate proposals to Mayor Mamdani's?

Jimmy Vielkind: The assembly and Senate came in a little lower than what Mamdani had been seeking. He wants to raise taxes for New Yorkers reporting $1 million or more. The state Senate assembly came in setting that bottom threshold at $5 million. I think that they've also put forward a corporate tax increase that's a little less than what the mayor was hoping for, but the sum total effect is the same. Mamdani is grappling with a $5.4 billion deficit in the city budget. He's asking state lawmakers to step up to help him fill that gap. He wants to raise taxes on the rich and on corporations to fill that gap. By and large, the Senate and Assembly have backed up that position.

Brian Lehrer: State Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie are who we're talking about. They've both been vocal about the need for new revenue. Here is Speaker Heastie framing the legislature's priorities like this.

Carl Heastie: The ends justify the means. We're looking forward to getting involved in this discussion. It's not so much about taxes or which taxes. Do we have enough money, or will we have enough money to take care of all of the priorities that we have across the state?

Brian Lehrer: Heastie sounds in that clip committed to the outcome but not necessarily the specific mechanism. Does that signal that there's room for Hochul to offer something short of the millionaire's tax and still get a deal done?

Jimmy Vielkind: I think that's a very astute-- Listen, Brian, I came to roughly the same analysis. I think it's important context for listeners to know that the Senate and Assembly, for years, have put tax increases in their one House budget resolutions. Now, these resolutions, which were formally adopted yesterday, they don't mean anything. They are essentially statements of priorities, statements of principles that really inform the final stretch of talks, which includes the governor and both Heastie and Stewart-Cousins.

Liz Krueger, who's a top Democrat in the state Senate on the Finance Committee, said that the one House is, "Our hopes and dreams for what we can get to by April 1," which is the budget deadline. She, in the next breath, said that, "We know we usually don't get there, but we like to try." Yes, Heastie and Stewart-Cousins have both been very focused on saying they will deliver for the mayor what he needs to balance his budget. They have not said unequivocally that they will raise taxes. I think the big question is how much backbone they're going to put into this at the negotiating table with Governor Hochul.

Brian Lehrer: There is some backbone coming from progressive members of the legislature. Here, for example, is State Senator Michelle Hinchey from the Hudson Valley.

Michelle Hinchey: We have to level the playing field. We need to make sure that the people who got tax breaks under Trump are paying their fair share to our community.

[crowd cheers]

Brian Lehrer: How much are people like Hinchey pressuring Carl Heastie and Andrea Stewart-Cousins, not just Hochul?

Jimmy Vielkind: They are pressuring, but this is a balancing game, and the leaders are in a position of power. The other thing to remember, Brian, is that this budget is already increasing between $7 and $9 billion from the current year's budget. Now, part of that is to make up for the loss of some federal funding, but part of it is, and we've talked about this before, Wall Street had a really good year in 2025. When Wall Street does well, people get bonuses.

Those bonuses are taxed pretty heavily by both the city and state of New York. There is extra revenue to play with. Now, Governor Hochul has already committed $1.5 billion to help ease that budget gap that Mamdani is dealing with. We know she's also committed to invest some of the early funding for extending the 3-k program to 2-year-olds, setting up the so-called two-care in neighborhoods around the city in the fall.

Heastie and Stewart-Cousins have to deal with pressure from progressive members, but at the same time, they have to get through Hochul. This is not Buenos Aires. This is Albany. It does not take two to tango here; it takes three. If you don't have Governor Hochul on board, you're nowhere.

Brian Lehrer: Here's part of how the governor has pushed back with this classic argument about the effects of raising taxes.

Governor Hochul: I have to look at the fact that we are in competition with other states who have less of a tax burden on their corporations and their individuals. I would say remote work changed everything. There were people who could only work in an office in Manhattan or work in New York State, and they were captives to our state. They were going to stay. We saw that that's not the case.

Brian Lehrer: How does that argument hold up? We've done a number of segments on that particular question from multiple points of view. I don't know if you've done independent reporting on it, but one could argue the remote work boom was a few years ago, not as much now so not as easy to locate out of the city if you're working for a Wall Street firm that's still on Wall Street.

One of our guests who is an analyst on this, not a partisan, said that, yes, there are more Wall Street jobs like Goldman Sachs jobs, JPMorgan jobs being created in other cities now, but they're also still going up in New York. There's a record number of JPMorgan and Goldman Sachs jobs now in New York compared to the past. How much of a disincentive is it really in meaningful terms? I don't know how much you feel you can answer the question.

Jimmy Vielkind: There are a few data points that people really point to when we talk about raising taxes and when we talk about the potential of taxpayer migration. The first is the raw number of tax filers who report more than a million dollars a year. That's the millionaires in the state. We know that since New York state increased its top income tax rate in 2021, the number of millionaires has gone up. People who advocate raising taxes point to that, and they say this is a myth. This is the myth of the migrating millionaire.

At the same time, people on the political right and opponents of raising taxes will say, "Look at the share of millionaires in the state of New York, which is really driven by the five boroughs and its surrounding areas." They say that that share of millionaires in the United States relative to other places, places like California or Texas or Florida or the Carolinas, is decreasing, that there is more wealth moving around.

It's very difficult to perfectly track it. There are obviously some high-profile wealthy people who leave and make a big stink, but there are other people who come to New York. They do well, they succeed, and they don't move. I don't have a definitive answer on this, Brian. I expect we'll hear callers on both sides of the issue. We hear from officials and analysts on both sides of this issue, but you are right in pointing out that there are fewer and fewer lucky individuals who can work from home five days a week in 2026 compared to perhaps 2021.

Brian Lehrer: Listeners, we can take phone calls and texts for Jimmy Vielkind, our WNYC and Gothamist Albany reporter. 212-433-WNYC, anything on the tax hikes, which this is getting to be an old debate now. We've gone over it just on this show multiple times, but now it's coming to a head in Albany. The new fiscal year starts April 1st, so this is getting real.

Or other things pertaining to New York State budget negotiations that are getting lost in the sauce because there's so much focus on this question of tax hikes for the wealthiest individuals and corporations. 212-433-WNYC, opinions welcome, questions welcome, 212-433-9692. Here's a question, Jimmy, from a listener who texts, "Has the governor said whether she will veto tax increases? Are there the votes to override a veto?"

Jimmy Vielkind: That is a good question, and it's a little bit tricky to do that in the context of the budget process. Now, New York State had a consolidated executive budget that really came about during the Progressive Era. This is the era of former Governor Al Smith. It gives the governor lots of leverage over what can be written into budget bills, what can be modified by the legislature, and what can't.

The legislature can add spending. They can increase the dollar amounts for, say, school funding or aid to hospitals. In terms of writing policy and writing taxes, it's not something that can just be done in a budget where there's a veto and an override. It's a little bit more complicated for some nuanced legal reasons. That's not a very strong and likely outcome.

Brian Lehrer: Here's a clip of Republican minority leader in the Senate, Rob Ortt, who raises a different issue. This is an upstate-downstate question.

Rob Ortt: It just really begs the question how much money the city of New York needs. If we're bailing them out and they're still raising taxes. That goes for Buffalo and other places as well.

Brian Lehrer: That's so interesting because what he argues is the rest of the state is bailing out New York City if it allows this kind of tax increase, but how does it really work? Is it old news? Is it true anymore? What I used to think which is that it's New York City's economy that subsidizes the rest of the state services.

Jimmy Vielkind: That is true. That's a point that Mayor Mamdani and some of his lieutenants, including First Deputy Mayor Dean Fuleihan, have been making and made when the mayor came to Albany to give budget testimony. There was a day when that was not the case, when New York City's economy was lagging, and its social service needs were soaring. The state and the rest of New York did seem to subsidize a little bit, but that hasn't been the case for quite some time.

I think that Ortt's comments are interesting in two ways, and they go to that listener question, which is that if you give a big bailout to New York City, what are all your other kids going to say? What are all the other cities who have fiscal woes going to say? Why are you helping New York City but not helping other places? It was interesting that Ortt mentioned Buffalo, the state's second-largest city, which has a massive structural budget problem and a new mayor, Sean Ryan, who's grappling with it.

I don't think listeners are particularly attuned to it, but the city of Buffalo is getting about $40 million that the governor has put on the table to help it limp through and get its house in order. The other thing that I think is important is to go back to that texting question, the question of votes. So Democrats do have a 2/3 majority in the state Senate and Assembly, but not by a lot. We can expect Republicans will stand against taxes.

I would expect that there are some Democrats, maybe they're not particularly vocal, but in an election year, who don't want to override a veto, who don't want to be super out front in raising taxes during an election year. I do think that it is not quite as much of a slam dunk as it may seem in New York City. Also, even though the polling suggests that it is politically popular on a statewide basis.

Brian Lehrer: Tina in Harlem, you're on WNYC. Hello, Tina.

Tina: Hi, Brian. How are you doing? Thanks for taking my call. I am just astounded. On your show the other day, I learned that the state taxes millionaires at the same rate as somebody making over $60,000.

Brian Lehrer: It's actually New York City. We'll parse that difference. Go ahead. Did you want to finish that or just leave it there with that mind-blowing statistic?

Tina: Like the federal government taxes people at different rates as their incomes get higher. Why don't we? I don't know about corporations and stuff.

Brian Lehrer: Yes, Tina, thank you. Yes, Jimmy, this is a thing that came up on the show the other day. The state has a number of different tax brackets. It's fairly progressive. I think it's five or seven or nine, some fairly large number of different tax brackets that kick in at different income levels. The city tax, because there's a city income tax as well as a state income tax, if you make $61,000, you are in the same bracket as somebody who makes infinity.

The city's tax brackets are not progressive enough by that accounting. I've seen where the assembly wants to give the city the power to raise its own income taxes. The state would have to allow it, but is this a stat, what Tina just cited, what our guest on yesterday's show said that only Brian Lehrer show listeners know? Why isn't this being talked about more, that the city's share of the income tax is not more progressive than it is?

Jimmy Vielkind: Brian, count me as a Brian Larry show listener who just learned that. I don't file taxes with New York City incomes. I live outside of Albany. That is inference string information. You are absolutely right in that part of Mayor Mamdani's ask and part of what has been offered, as you said, by the state assembly is just the ability to control its own taxes. Not to raise taxes on people who live throughout the state, not to touch the state income tax rates, but just to touch those city rates.

Mamdani's argument is that if you took someone who was reporting more than a million dollars in income, or more than 5 million, or more than $10 million, and you added just a few more basis points on their tax rate, you could generate a lot of money. Mamdani argues it wouldn't necessarily capture-- it wouldn't be enough to make somebody leave. The counterargument to that is that tax law is very complex.

The exact place that is counted as your legal residence, whether it's New York City or if it's maybe in a state in the Hamptons or West Palm beach or wherever people who have multiple residences like that live, that if you don't get counted as being a Capital R resident of New York City, then you're not subject to any of that New York City income tax, even if you are, say, someone who's making a lot of money working for a company that is headquartered in New York City and commuting regularly into New York City.

It is a little bit more complicated. The state income tax is a little bit broader based in that it captures income that is earned in the state of New York as opposed to just affecting residents of the city of New York, which is how the city's income tax work.

Brian Lehrer: Henry in Manhattan, you're on WNYC. Hello, Henry.

Henry: Yes, good morning, gentlemen. There are more millionaires who live in New York than any other place in the nation and than any other place in the world. The Big Beautiful Bill cuts the federal income taxes, slashed the federal income taxes of the richest people, and therefore, an increase in their taxes in New York will count as nothing. Tax the rich.

Brian Lehrer: Henry, thank you very much. You talked before how the number of about how the number of millionaires in New York continues to increase, but decrease as a share of the millionaires in the country generally. To his point about the "Big Beautiful Bill," do they make the argument, does the mayor or do the leaders of the legislature make the argument that even these New Yorkers with a million dollars or more a year income, if this income tax did go up by the two points that the mayor wants, that they wouldn't be any worse off than they were a year ago because of the federal income tax cuts in the so called One Big Beautiful Bill that the caller is referring to?

Jimmy Vielkind: Yes, they do. Henry's argument is something that is very much on the minds of advocates for raising taxes this year. That clip that we played from State Senator Michelle Hinchey of the Hudson Valley, that was the point she was making. She spoke at a pretty big rally in the state Capitol that brought almost 1,000 people to what's called the million-dollar staircase, because I guess at the time it was built in the 19th century, it cost a million dollars, which probably got you a lot more sandstone carving than it would now.

They are saying that the wealthiest have gotten relief from the Trump administration and that it's high time to recapture some of those benefits for the state at a time of reductions to federal aid to New York State, particularly in the Medicaid program.

Brian Lehrer: Here's Laura in Manhattan, who I think is going to say she makes a lot less than this cutoff that we're talking about, but would see her taxes go up under these proposals. Laura, do I have that right? Hi, you're on WNYC.

Laura: Hi. No, you don't have that right. What I'm saying is--

Brian Lehrer: Okay. Sorry.

Laura: That's okay. What I'm saying is that I'm retired. From passive income, I earn over $200,000 a year, so my taxes would not go up. I live in a two-million-dollar apartment. When I pass a homeless person on the street, I want to cry. Why is the city not doing more to help low-income-- You just had a piece on minimum wage and people not wanting to pay higher minimum wage. I can't believe people are working two or three jobs, and I'm not getting taxed more for my passive income. I'm walking. Sorry, I'm out of breath from walking and talking, but I'm walking to a yoga class in the middle of the day because we're tired.

Brian Lehrer: Laura. Now, I understand your point. You're saying you make $200,000 a year from your investments. As a retiree, you would voluntarily pay more taxes. Correct?

Laura: Now, I worked hard for an entire career, so I earned this money, but I would be happy to pay more in taxes. Yes.

Brian Lehrer: Laura, thank you so much for your call and listening as you're walking and calling us while you're walking out on the street, no less. I love it. Yes, we've gotten calls, Jimmy, from people riding bikes and listening on their bike radios and calling on their bike phones. Laura walking out there. We got one not that long ago, somebody running in Central Park who was more out of breath than Laura was. Isn't there another proposal now that would hit people with less than a million-dollar-a-year income? I think it was married couples with more than half a million dollars of income. You familiar with that proposal?

Jimmy Vielkind: I'm not familiar with that one. There are lots of things that float around in the legislature. The people at the top of the pyramid of power aren't really talking about a threshold that that's low. Again, Mayor Mamdani said a million-dollar threshold, it's obviously a nice round number. You can say millionaire. As I said, both Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins, they set their threshold at $5 million.

One of the things that happened when New York State raised income taxes in 2021 was there were creation of new brackets at the 5 million mark and the $25 million mark to make the tax code even more progressive for people who are really, really, really doing well. As to Laura's point, and I think congratulations to her on working hard and finding a wonderful lifestyle in retirement, most of the proposals include some kind of trims for what are referred to as middle-class taxpayers.

I don't know if you'd want to consider someone making $200,000 passively as middle class, but generally speaking, lawmakers couple increases to the highest rates with very, very tiny trims to people who are making in the six-figure range or less than the six-figure range on their state income taxes. Then the other thing to say about Laura's point is that there are people of means, be they millionaires or not, who have expressed sentiments similar to her.

There's a group called the Patriotic Millionaires, whose leader, Morris Pearl, is somebody who I've interviewed over time and who make the point of, "We're doing well. I want to spend my taxes on the common good, on building out social safety nets, on investing in infrastructure, and perhaps bracing toward climate change." They are a potent voice, but they are not always reflective of the majority voice of business and moneyed interests.

Brian Lehrer: Jimmy, before you go, I want to touch on a couple of other things. One, I see that both chambers in their budget bills, and again, the New York State fiscal year begins April 1st, so we are in the home stretch here. I see that these bills included Mamdani's fare-free bus pilot program over Hochul's objection. This would not make every bus in New York City free. Or would it?

Jimmy Vielkind: No, these are, at this point, just limited pilot programs. In some ways, they're a resurrection of what Mamdani successfully pushed for in 2023, which was a pilot. Just to see what would happen here. The mayor is proposing a system-wide fare-free experiment for city buses, which he says will increase their speed and provide for more equitable service. Now failing that, he's proposing a pilot during the World Cup this summer as another way to sort of test this out.

This is the kind of thing where leaders of the MTA, which is a state controlled authority, not something that's subject to Mayor Mamdani's jurisdiction, have really expressed some concerns about what it would mean to implement fare free buses, what impact it would have on ridership, how that might cannibalize fixed rail subway service, which would still be subject to a fare.

At the same time, it's not a ton of money in the scheme of a 260, $263 billion state budget. It wouldn't surprise me if something on a small scale akin to what's proposed, did get through in state budget negotiations or, at the very least, make for a big discussion point in those coming talks.

Brian Lehrer: Why did the previous fare-free bus pilot experiment a few lines around the city not get made permanent or expanded to more lines? Mamdani was in favor of that, of course, a leader in that when he was in the Assembly. Was it considered a failure on any level?

Jimmy Vielkind: Brian, I won't count myself as an expert on exactly how that went, but I understand that folks at the transit authority were not wild about doing this. Sometimes members of government aren't happy to be told what to do by the state legislature, but also that it was something that just wasn't really pushed for or re-upped again. I'm afraid I don't have a very specific answer on that. I'm sorry.

Brian Lehrer: By the way, an addendum to the phone call from Laura. Two texts, one of them is from her. Somebody else wrote distinguish between income and wages. Income from investment is not taxed as wages, when we talk about income and what income levels would get a tax hike. Then Laura herself texted and followed up, which is kind of amazing in and of itself. She walks, she calls, she does yoga, she texts, all at the same time apparently. She wrote, "This is Laura, my Treasury bill. Investments are not taxed by New York State." A distinction worth making in the context of this policy debate.

Jimmy Vielkind: I am not a tax lawyer, I am not an accountant, but I did use to work for the Wall Street Journal so I would talk a lot to tax lawyers and accountants. Yes, it's correct that generally, federal savings bonds and federal bonds have some interest tax protections on them. Laura is correct about that. There is a distinction between wage income and passive investment or investment income, but it's a question of residency.

It goes back to what I was saying about New York State versus New York City residency. If I am, say, an NFL player who goes to New York's only football team, the Buffalo Bills, for a couple of home games a year, whatever percentage of my salary that is prorated for those games, which I'm certain to lose because the Bills are very good, is taxed as New York by the state of New York, regardless of where the NFL player lives.

If that NFL player were to live in the state of New York, then all of their wages would be taxed, as well as any passive income that they get. If you are a resident of the state of New York, all of your passive income is taxed by the state of New York. If you're a resident of wherever, say California or Illinois, and you have wage, usually income, that is sourced to New York, that income is taxed by the state of New York. I welcome all the texts and calls from the actual accountants and tax lawyers to amend where I gave bad advice to people.

Brian Lehrer: The bottom line there is more incentive for NFL players to join the Giants or the Jets, who don't play in New York, than there are to join the Buffalo Bills.

Jimmy Vielkind: Brian, there is never an incentive for anybody to play for the New York Jets.

Brian Lehrer: [laughs] Fair enough. Let me throw Richard on the Upper East Side in here because he just called, and he said he would leave New York City because of taxes when his kids go to college. Do I have that right, Richard?

Richard: Yes.

Brian Lehrer: Go ahead.

Richard: Yes, I'm calling to say that I don't consider myself super rich. I do own property in New York City. I consider myself upper middle class, and I'm ready to leave. I will gladly pay taxes if my taxes go towards infrastructure of New York City, but my taxes are not going for that. My taxes are going to programs that seem endless, programs that seem to feed the poor of the world. We had open borders under Biden, and that's where the money is going. I live on the Upper East Side--

Brian Lehrer: That's federal taxes. That's different than New York taxes.

Richard: Well, but state tax is also fungible because if you direct state taxes towards different programs, then you can relocate the money going towards programs. It does happen. I live on the Upper East Side, and we have a beautiful promenade, Carl Schurz Park. North of that, everything is closed. It's been closed for years because it's crumbling and it's not safe. Why can't we as a city-

Brian Lehrer: So you want infrastructure?

Richard: Yes, I want infrastructure. Just an anecdote I want to share with you, the last good mayor, in my opinion, that we had was Bloomberg. When Bloomberg was mayor, I saw with my own eyes how a Department of Sanitation truck will plow snow and collect garbage at the same time. Now we have two weeks of no collection because there's snow on the road. Two, three, four days, I understand, but two weeks?

Brian Lehrer: You don't like how your tax dollars are being used. Richard, I hear you. Call us again. Thank you for today. I have to go because we're running out of time in the segment, and I do want to touch very briefly on this one other thing. Republicans this week filed a complaint against the chief judge of the New York State Court of Appeals, Rowan Wilson. I gather it had something to do with the fact that he objected to another judge who called a defendant an animal. Can you give us a short version of this?

Jimmy Vielkind: Yes. This is in the context of a piece of pending legislation that's called the Second Look Act. What it would do, Brian, is allow judges to take people, incarcerated people who were sentenced to 10 years or more in prison, and let a judge review their case. If there's someone who committed a crime, including a very serious crime, when they were, say, 17 or 18 years old, a lot can happen over 10 years in prison.

If this is a person with a good disciplinary record, if this is a person who has maybe achieved higher education in that state prison, then the advocates for this bill say, "What are we doing by keeping this person behind bars for another 5, 10, 15 years? Let a judge look at this and revisit the sentence, and consider factors that perhaps you could not consider at the time of a person's sentencing after some kind of an act."

Judge Wilson is in favor of this bill. This is Judge Rowan Wilson, the chief judge of the State Court of Appeals, which is the top court in the New York State system. He supports this legislation. Speaking at a forum, he referenced a lower judge who, in the course of sentencing, someone said something to the effect of, "You're an animal, and you should stay in prison forever." Then Wilson said to the audience that he was very displeased with this.

I want to read this quote exactly to not paraphrase. Wilson said, "Judges here are elected or in some cases, are appointed by elected officials. One thing that all of you can do is find out who those people are, and there are organizations who are starting to do that and starting to publicize that. When those judges come up to be elected, don't vote for them and get other people not to vote for them. That's something you can do for me."

This really pricked up the ears of many people in legal circles, including a series of Republican lawmakers who filed this complaint, because they said, "You can't have a judge weighing in on an election. You can't have a judge weighing in and saying, anybody who is making these kind of comments as a judge should not be in office."

Brian Lehrer: Because judges aren't supposed to make political endorsements.

Jimmy Vielkind: Yes. They argue this is a negative endorsement. Now, Wilson's spokesperson stood by the comments, said that they were appropriate, and said that, "It's also appropriate for him to speak publicly about proper judicial temperament and values and to encourage New Yorkers to stay informed about the conduct of the judges serving their communities and to participate in the processes by which those judges are elected or appointed."

Brian Lehrer: We will see if this goes to anything like an ethics slap on the wrist or maybe even an impeachment push, which would never happen because there's a Democratic legislature, but there is that. Jimmy Vielkind, New York State Issues reporter for WNYC and Gothamist, thank you so much.

Jimmy Vielkind: Thanks, Brian. Always a pleasure to be with you and your listeners.

 

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