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Brian Lehrer: Brian Lehrer on WNYC. Maybe by now you've heard that New York City has a financial problem. The city government itself. As of now, the city is going into the next fiscal year with what is estimated to be about a $5.5 billion budget deficit. They need to close it, by law, with either revenue-raising or spending cuts. Comptroller Mark Levine says these are numbers that the city hasn't seen since the Great Recession.

Closing that gap has become the first fight that we've seen between the new mayor, Zohran Mamdani, obviously, and the new City Council. The New York Times and others are even saying Mamdani and City Council Speaker Julie Menin are in a feud. The Times uses that word. Mamdani's preliminary budget, released in February, proposed two things the Council says are off the table, a 9.5% property tax increase if he doesn't get his income tax on the wealthy increase from the state, and a nearly billion-dollar draw from the city's rainy day fund.

Now, last Wednesday, the Council released its own plan, $6 billion in savings and revenue that would close the budget gap. No property tax hike, no rate on reserves, no cuts to services. Can they really do all that? Here's Council Speaker Julie Menin, who released the Council's plan, alongside Finance Committee Chair Linda Lee, who will join us in a minute.

Council Speaker Julie Menin: We want to be responsible, and we believe that we can find the savings without making cuts. We believe, and I think when you look at the full list, there are so many different items in this list where we are able to responsibly reach savings without doing cuts on services whatsoever. We're not at the point where we need to do cuts. We can find the savings in the way that we did without cutting services.

Our position has been clear. We have been a hard no on the property tax. We also are a hard no on raiding the rainy day fund. We released a report that showed that if you raid the rainy day fund, all that does is increase our borrowing costs and actually cost the city of New York a tremendous amount of money in the future. We can get to these savings without cutting any critical services or staff.

Brian Lehrer: New York City Council Speaker Julie Menin last week. Mamdani fired back the same day, saying the Council's math doesn't add up, and if their plan were adopted, it would force the city to slash billions from agency budgets. Here's the mayor.

Mayor Zohran Mamdani: Council Speaker Julie Menin just released her budget proposal. Her plan claims to close the city's $5.4 billion fiscal gap without taxing the rich or cutting services. The problem is that's not what it would do. If her proposal was adopted, it would result in slashing billions of dollars from agency budgets, and working New Yorkers would pay the price. It double-counts savings, overestimates revenues, exaggerates savings on interest payments. In the midst of this historic budget deficit, the Speaker's $6 billion proposal asks Albany for just one thing, more time to reduce class sizes. My position, tax the rich.

Brian Lehrer: Mayor Mamdani there. I like his ringtone, don't you? With me now to make the Council's case is Linda Lee, City Councilmember representing District 23 in Eastern Queens. She is the chair of the Finance Committee. Councilmember Lee, welcome back to WNYC.

Councilmember Linda Lee: Great. Thank you so much for having me.

Brian Lehrer: Before we even look at the competing versions of the budget, help us understand how we got here. Mayor Mamdani blames his predecessor, Mayor Adams, for this $5.5 billion budget gap. Does the Council hold the same position on that?

Councilmember Linda Lee: I think he's done a good job in terms of making sure that the expenses are more accurately reflected. However, to be very clear, his preliminary plan does omit the $1.1 billion in funding for a number of the programs and services that the City Council historically has wanted to fund, including libraries, culturals. Our job as a City Council is to adopt a budget that is smart and responsible and actually is protecting New Yorkers. As the speaker said in your opening clip, we feel very, very strongly that we can reduce this gap without having to cut services and without having to drain the rainy day fund, and also without having to increase property taxes.

Brian Lehrer: What is your perspective on the Mayor-- Let me ask you to respond to the Mayor's clip because you could see why this would sound like funny math on its face. $6 billion in savings and revenue. No property tax hike, no raid on reserves, no cuts to services. How do you get there?

Councilmember Linda Lee: If you look at the preliminary response that we created and look through it and read it, we actually do propose a couple options to increase taxes. The speaker herself has said that she is for progressive taxes. For example, reducing the UBT PIT credit for income above a million dollars, that's something that we, on the city, have control over. Then one of the proposals on the state is to look at the PTET, which is the pass-through entity tax, and increase that to reduce that for the credit.

If you look at all these options, plus looking at vacancies, which are the positions that have not been filled and hired-- Again, to be clear, we're not saying to cut line items or cut positions. That is not what we're saying. We feel that, very strongly, we can get there by looking at some of the savings. We have a lot of proposals in the preliminary plan to look at those cost savings and re-estimations in our budget.

Brian Lehrer: The mayor has framed this as a stark choice. Either the wealthiest New Yorkers and most profitable corporations contribute more, or the burden falls on working and middle-class New Yorkers through property taxes. Property taxes affect homeowners themselves. They also affect renters, because if the taxes are on the landlords, if the rent isn't stabilized, the landlord's going to raise the rent to compensate. That's a pretty strong political argument, many may say. Why won't the Council back him up? If Albany taxed the rich, there would be more revenue, the deficit gets addressed, and you don't have to fight about property taxes. Are you on board with the mayor, and just you could join forces and really lean on Albany to tax the rich?

Councilmember Linda Lee: To be clear, we are actually in our proposal, it's outlined. We have several-- I know that the mayor had mentioned in his statement that the only thing that we're calling on Albany to help us with is the class size. However, that's actually not true. If you look at the preliminary response, there's actually several things in there where we're calling on the state to help in terms of decreasing our budget gap.

In terms of the property taxes versus raising the rich for property tax or personal income taxes, I don't think it's a binary argument. Those are not the two only options that we can look at. That's what we on the Council are trying to do, which is to have a smart and responsible budget that actually takes a look at any and all options that must be put on the table. In terms of property taxes, I think, first of all, we can go into how our property tax system is broken, and it needs to be reformed.

It doesn't make sense, especially when we're talking about an affordability crisis, time period for us to talk about raising property taxes that would actually hurt Black and Brown families the most. I have parts of Southeast Queens, there's modest homeowners, there's working-class homeowners, and middle-class income homeowners. This would really hurt a lot of them in terms of raising the property taxes. We feel very strongly on the Council that there are a lot of other options that we should be looking into.

Brian Lehrer: I saw a quote from Speaker Menin where she told reporters she doesn't want New York "pitting states against each other". Does that mean she or you are against the income tax increases on the wealthiest New Yorkers and corporations?

Councilmember Linda Lee: Again, I think that we have looked into and saying that all options should be on the table. Looking at other options that I mentioned at the state level. Right now, we're focusing on what we can control, which is more on the city level, while also advocating at the same time for a lot of the state increases to happen. I mean, I know they're in the middle of their budget process right now, and we're hoping to get more information soon on where they're at. We are in favor of progressive taxes at the state level. Again, yes, as the speaker mentioned, we don't want to put states against each other.

Brian Lehrer: The single biggest item in your plan, from what I've read, and you were starting to get at this a little bit before, is $860 million in what's called vacancy savings. That is money from positions in city government that were budgeted but never filled. You write in the Council's budget brief that you're not calling for the elimination of those vacancies, just recognizing the unspent money. I don't understand that. How does that work?

Councilmember Linda Lee: Sure. Let's just say-- I just want to remind folks that these are based on the mayor's numbers that came out in end of January as well as end of February. Simply, a lot of agencies budget for certain number of positions to get filled. However, at the end of the fiscal year, there may be remaining 100 positions that are left open that we're not able to get hired. We're not saying to not hire those positions because some of the agencies definitely need to staff up and hire positions to fill the work that needs to get done.

What we're simply saying is out of, let's just say 100 positions that are not filled, whether it's because it was taking too long to hire positions or they just couldn't find folks, we're simply saying that remaining amount put back into the budget. For example, if my salary is, let's just say, $12 a year. That's a dollar every month, and I only get hired as of April 1st. That means that $9 of my salary was not spent. What we're simply saying is put that $9 back into the budget and recognize that in the revenue.

Brian Lehrer: The Fiscal Policy Institute, the left-leaning think tank, they would more or less be aligned with the mayor's position, released a statement that said the backbone of your plan is actually $2 billion in vacancy reductions and that your budget is only balanced by assuming these positions remain unfilled. They also flagged in their statement that your expense re-estimates only add up to about $2.5 billion, leaving more than $450 million unaccounted for. Separately, the news organization, The City, reported that the Council did not identify how the full $2 billion in efficiencies would be saved. Can you fill in some of those gaps for us?

Councilmember Linda Lee: Sure. First of all, the Fiscal Policy Institute we know is definitely more aligned with the mayor's views on the budget. Where we look at the gap is just on a very surface level. If you look at re-estimations, which we have outlined in the budget response, if you look at savings on positions that have not been filled yet, it actually closes the gap quite a bit. Then when you dig a little further, which is, I think, now what we're saying is that, for example, there are re-estimations that could be done with DOB in terms of construction permits and late fee re-estimates in FY26.

Right-sizing the total wages and salaries budgeted across the agencies and also recognizing an additional, for example, 42 million across FY26 and '27 in rental revenues from different authorities. These are the things that we put into our response that start to close the gap and minimize the gap. It's re-estimations, it's recognizing revenues that we know have already come in. It's actually taking a smart approach and really doing the work to dig. Because a lot of these savings that we see across city agencies, once you start to add them up, it really starts to close the gap.

Then also, in the future, looking at ways to-- The speaker has spoken about the no-bid contracts, looking at ways to save on money with that. In the DOE, for example, budget hearing, we heard about how they have a contract with Ernst & Young for 17 million, but that contract has never been audited. How do we look at our budget in a much smarter way to find the actual savings inefficiencies, which actually will, we feel strongly, will add up to close the budget gap.

Brian Lehrer: On all these vacancies that would go unfilled, at least for now, Barbara in Chelsea has a question. Barbara, you're on WNYC. Hello.

Barbara: Hi. Good morning. Thanks for taking my call. Yes, I want to go back to that issue because I'd like to know more specifically, or maybe the Council will issue an actual list. What are these positions that would go unfilled? In the end, if you don't fill them, isn't that, in a sense, a tax on the rest of us? It's not a tax on the rich because they can pay privately for everything, but isn't it a tax on the rest of us that depend on whatever work it is that people in these positions would be doing?

Brian Lehrer: Right. That's an interesting question. Councilmember.

Councilmember Linda Lee: Sure. Currently, the services that the city receives, whether it's picking up the garbage on a daily basis, trimming the trees in the parks, those are positions that are already filled. The services that are happening right now would not be compromised. However, what we're looking at is what are some ways where we can get better estimates on what those empty and unfilled positions are?

I know that the mayor himself campaigned on finding waste within the city agencies. One of the things that he did is to hire chief savings officers and appoint chief savings officers in all the city agencies, which are supposed to find savings of 1.5% in FY26 and then 2.5% in FY27. The reports were due on March 20th. We have not actually seen the reports yet. We are hoping to get some of those numbers and what the actual savings are going to be before the executive budgets start in May.

It'll be interesting to see what each city agency comes back with in terms of how many of those positions have been filled and which ones are still empty. In terms of the services that are provided, that is not something that we see as compromise now. However, as we start to see perhaps more increases, those are things that will have to be adjusted in terms of what we want to see in the future.

Brian Lehrer: Would you say there is--

Barbara: Brian, I have follow up.

Councilmember Linda Lee: Oh, sorry.

Brian Lehrer: Oh, Barbara in Chelsea, go ahead.

Barbara: Yes. I find that response a little bit disingenuous. These are roles-- I mean, it's one thing to say, let's see what the departments themselves would agree could go, but that is very different than saying we have a bunch of positions that don't happen to be filled. I'd like to know what those are. Because maybe they are things that are not the ones that should go because they're wasteful. It seems as if the proposal that's out there now just says, "Yes, these could be on the chopping block."

Brian Lehrer: Barbara, thank you.

Councilmember Linda Lee: Sorry. Just to respond to that. No, I totally agree that we are looking forward to seeing exactly what the city agencies come back with, because that's not information we currently have right now that'll be coming up in the executive budget for FY27. What we do know is that there were vacancies reported at the end of January and February, and we are hoping that they would get filled, especially in the agencies that need the services. In terms of a breakdown by agency, that's something we're going to look forward to in FY27.

Brian Lehrer: Would you say, Councilmember, that there is currently a feud between the mayor and City Council? The New York Times says this, for example, "An episode that began as a fiscal flare-up mushroomed into perhaps the most pointed political feud of Mr. Mamdani's mayoralty, positioning Ms. Menin, a fellow Democrat, as a willing adversary." About Speaker Menin, that Times article says, "She has raised concerns about some of Mr. Mamdani's public safety agenda and embracing her identity as the City Council's first Jewish speaker. She quickly moved to mandate buffer zones around houses of worship and schools after a protest outside a synagogue erupted last year."

Do you support the speaker on the buffer zones and the public safety agenda? Do you think it's gotten to that point already between the mayor and Speaker Menin, or you as all of City Council as a whole, that it's a feud?

Councilmember Linda Lee: Yes, to answer your first question, I do support the speaker on the buffer zone bills. I think this was a way to protect folks in their houses of worship while also protecting First Amendment rights. We were very clear about that. I do think that the mayor's comments towards the speaker was inappropriate. I think it's a bit premature because right now we're still in the beginning of the budget process. There's a long way to go. We still have a lot of conversations that need to be had.

I think there were a lot of us on the Council that were a bit surprised, to be honest, at his statement that came out. It came out pretty quickly after our budget response came out. A lot of us were a bit surprised that it was that aggressive so early on in the process. This is a partnership. We have to make sure that we are partnering with both Albany as well as the mayor to get this budget closed.

We have 51 members on the Council that will have to vote on this budget to get passed for FY27. We still have a long way to go. We're looking forward to having conversations in the future. I do think that-- I don't know if I would categorize it as a feud just yet, but we are, like I said, working very hard in terms of the next steps of negotiation. Definitely, we're surprised.

Brian Lehrer: We have a couple of interesting listener comments on property taxes. One listener writes, "The fairest taxes by far are property taxes." In this listener's opinions. "If you don't provide forgiveness and other programs that distort how they're actually paid for, why not fix that thicket of special interest programs?" I think we're going to hear something similar from Maura in Bay Ridge. Maura, you're on WNYC with the City Council Finance Chair, Linda Lee. Hello. Maura, turn the radio off. Okay? So we don't get the delay in the background. You're there?

Maura: I am. I was just curious. My understanding is that it's very difficult to make the property taxes for luxury buildings any higher than the rest of us. As a homeowner in Brooklyn, I am very happy to pay my fair share of taxes. It's a great thing that I'm able to do to contribute to my community the way the community gives back to me. I don't understand why luxury buildings, why can't we target those buildings to have just even a slightly higher property tax rate so that we can make up what I imagine would be a huge gap right there.

Brian Lehrer: Thank you, Maura. Councilmember.

Councilmember Linda Lee: Sure. As I mentioned earlier, to your point, our property tax system is broken. What we see across the city is that there are certain modest homeowners, let's just say, in parts of my district in Southeast Queens that are getting taxed at a higher rate than some of the more luxury buildings that you're talking about. What we are trying to say is, especially now in an affordability crisis, we do not want to raise property taxes because it's going to hit hardest on a lot of the homeowners that cannot afford to increase taxes at this point. I think what our approach should be is really taking a deeper dive at looking at the system and trying to fix that before we even have a discussion on raising property taxes.

Brian Lehrer: What about economic growth? Maura, thank you for your call. The Times has an article today citing the city's net loss of around 20,000 private sector jobs last year. That was under Mayor Adams, but Mayor Mamdani has to deal with it. The Times notes, he changed-- Mayor Mamdani changed an economic development deputy mayor position to one for economic justice and hasn't yet named a head of the city's economic development corporation. Do these things bother you as bad for the city, or is it the kind of reorientation that the city maybe needs, given the vast inequalities?

Councilmember Linda Lee: Actually, if you look at some of the proposals that we have in terms of putting funding back into the preliminary budget, a couple of those things address that because I know that the economic growth and jobs have been slowing down. One area that I think we could really focus on is making sure that we increase, for example, our youth employment programs, which actually puts a lot of our youth in the pipeline to receive a lot of these jobs that are not being filled.

How can we boost those types of jobs to actually build the pipeline for the future? How do we look at FIFA, which I know a lot of folks are talking about, and how do we use these opportunities to see how we can increase revenue and boost the economy? I think a lot of what is not being talked about also is the small business owners, because our city is really built on the backs of the small business owners. How do we use these job opportunities, for example, that I mentioned with youth employment, to actually boost a lot of the small businesses in the areas where they're actually working?

I think there's a lot of industry sectors, for example, with the AI sector, tech, and all of those things that we can look at as new job opportunities. Also, how do we use those tools to improve, I would say, good governance? How do we use that to improve the efficiencies on our end? Even looking at solutions like group purchasing, how do we use that to make sure that we're saving in the city's budget? Which, honestly, when I asked a lot of the city agencies during our preliminary hearings about that, that is not something that they have done. How do we use all these tools in our toolbox to actually provide good governance as well as efficient programs?

Brian Lehrer: On the loss of private sector jobs, here's JPMorgan Chase CEO Jamie Dimon, interviewed by Steve Inskeep for Morning Edition this week. Dimon says New York has some very attractive things going for it, like the arts, but--

Jamie Dimon: It also has the highest individual rates, the highest corporate rates, the highest estate tax rates. That tends to drive people out if you want to be competitive. It's people vote with their feet. That's not a moral statement. That's an actual what's actually happening and why is it happening.

Steve Inskeep: You also point out that you now, as a company, have more employees in Texas than in New York.

Jamie Dimon: Yes.

Steve Inskeep: Why?

Jamie Dimon: Because they're hugely hospitable. It's conducive to business. The mayor calls you up, you need a big plot of land, they'll change the bus lanes for you. They do a whole bunch of things. I think their tax rates are very low, both corporate and individual. People want to work there.

Brian Lehrer: Councilmember, how much are you and Jamie Dimon on the same page?

Councilmember Linda Lee: I think to the Council's response, this is exactly why we want to be mindful of not draining the rainy day funds, not increasing property taxes, and also not cutting services. Because, to Jamie Dimon's point, we want to make sure that people are staying in New York City, that businesses are staying here. Just as an example, for the rainy day fund, if we-- and the speaker alluded to this in the beginning clip that you played, which is that if we drain the rainy day funds, it's going to impact our borrowing costs, it's going to increase-- it's almost like a taxation on future generations because it's going to make it harder for the city to borrow.

When we look at opportunities to keep businesses here and also provide new opportunities like housing projects, it will be much, much harder for folks to do that in New York City if we continue to raise taxes. I think that, again, there's a balance. We can talk about progressive taxes, we can look at those options in terms of making sure that we're finding savings and increasing revenues. We want to make sure that we're doing it in a very thoughtful way so that the folks who are here are not being hit the hardest, the working-class and middle-income class folks.

Brian Lehrer: One last question, and I guess it's a way that the mayor might push back on what you just said. He says childcare is what's going to make the city attractive enough to grow the labor market, make workers want to live here, and therefore make companies with choice, like Jamie Dimon was referring to, want to locate here more than raising taxes on the wealthiest individuals and corporations will scare them away, and you can't provide that universal childcare without that tax increase on them. True, in your opinion?

Councilmember Linda Lee: I think there's a way where we can look at how to align ourselves with the mayor on this. I know that the Council, as well as the mayor, we do agree that this is an area that we would like to work on in terms of universal childcare. How we get there, I think perhaps may be different, but I think there are ways to, again, look at the budget and find enough savings without having to drain the rainy day funds to be able to get there.

For FY26 as well as FY27, as well as in the out years, we believe that we can do this by looking at multiple different options that are outlined in the prelim budget that are response to the preliminary budget. Yes, obviously, if we can have more funds in the parents' pockets, that will be better and allow folks to work in their jobs without having to have increases in their personal expenses. These are all areas that we're looking into right now.

Brian Lehrer: New York City Council Finance Committee Chair, Linda Lee. Her district is in Eastern Queens. On the budget proposal disagreements between the mayor and City Council, again, what the New York Times says is an episode that began as a fiscal flare-up but has mushroomed into perhaps the most pointed political feud of Mr. Mamdani's mayoralty, positioning Ms. Menin, the speaker of the Council, a fellow Democrat, as a willing adversary. Linda Lee, thanks so much for coming on and sharing your numbers with us and having this conversation.

Councilmember Linda Lee: Thank you so much, Brian.

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