[music]

Bloomberg Audio Studios, podcasts,

radio, news.

>> The city's relationship with its

wealthiest residents, most profitable

[music] corporations also has to change

so that we can bring this city back to

firm financial footing. You know, as the

mayor, I am legally required to balance

the budget of this fiscal year and the

next. That is something we are [music]

fully going to do. In order to do so, we

have to deal with these structural

problems. That was New York City Mayor

Zon Mani speaking [music] with Bloomberg

just a few weeks ago warning of the

city's $ 122.6 billion budget gap over

the next two years. Mark Lavine, he is

New York City controller. He joins us

now on set to discuss. Mark, it's great

to see you.

>> Great to see both of you. Thank you.

>> So, let's start exactly there. The

budget gap. I mean, when you take a look

at how that possibly could be fixed, is

there any hope of fixing that from the

revenue side or is it going to be

cutting costs? You know, our revenues

are pretty good right now, partly

because the finance industry is doing so

well, but more than that, commercial

real estate's doing the best it's been

for 20 years. The problem is that we

have some expenses that are growing very

fast that have not been accounted for in

the budget. And when we took a look at

the books, what we've seen is a very big

gap, which is something we haven't seen

in New York City since at this scale

since the financial crisis. How are we

going to solve it? It's going to require

help on many fronts. We're going to

definitely need to find efficiencies

within city government. We're going to

need some help from Albany. I hope I'll

be going there Wednesday to plead that

case. I think we can get through this,

but this is beyond what we have seen in

a budget cycle in uh probably 15 years.

>> Let's talk about what you're seeing when

it comes to cost because taking a look

at some of them, it seems like there's

sources that are constantly under

budgeted, if you want to call it that,

uh over time for uniform officers, for

example, comes to mind. But where are

you seeing the biggest growth when it

comes to that side of the ledger?

>> Yeah, so that we have a an equivalent of

a section 8 housing voucher in New York

City. It's it's got a weird acronym.

It's called CityFaps. We're one of the

only places in the country that has a

local version of this. Great program,

guys. It's growing by 4% a month. And I

think your audience understands

exponentials. And so it's doubling every

18 months. And we project that it'll be

over $3 billion next year.

>> Hang on. I back up. Section 8 to me

means something uh different than I'm

sure what you're talking about because I

think of MASH and Corporal Clinger,

right? You're talking about money that

we pay people to afford to be able to

live here.

>> Yeah. This is a voucher you can use to

to rent housing in a private building,

right? So, not public housing. You can

go to a home you can find throughout New

York City. Uh section 8's a limited

supply from the federal government. Um

we have a local version. Uh great

program. It's growing at an astounding

pace. What? We just give that we give

out more and more. You're saying?

>> Yes. Uh we've we've expanded the

qualifications. It's designed for people

who are in homeless shelters or in

danger of homelessness to help them get

out of the shelter. Exactly.

>> We don't want them to get out of New

York City. I mean, why have in the most

expensive city in America? [laughter]

Why are we putting people up here? Why

not move them to places that are cheaper

to live?

>> Well, we we want them to be New Yorkers.

This is they're part of our city and our

community and they have family ties here

and more. And we can do this, but we're

not budgeting for it. and has blown a

hole in our budget that is billions of

dollars. Reigning in or updating

programs like that is going to be key to

getting out of this hole.

>> Well, you mentioned, for example, the

performance of Wall Street. You think

about how well Wall Street did uh how

well the stock market did over the past

year. Would you expect that uh to shrink

the deficit when we get those updated

numbers or some of the costs that you're

talking about that are growing

exponentially going to just have that

come out in the wash?

>> Yeah, I think it will. Look, New York

City's economy on the whole is doing

very well. Also, real estate taxes are

producing more revenue than we expected.

Sales tax again, personal income tax,

but uh and we do expect to further

revise those numbers because the bonus

season we had um one Wall Street person

told me it's the second best they've

seen in their entire career this year

for December of 2025. But even factoring

that in, we're going to be left with a

hole. M and so while we want to keep the

economy going, we want to grow New York

City's economy. That is the ultimate

solution to our budget problems and I'm

going to be a voice for that as

controller. Um we have a complete freeze

on hiring in New York and the private

sector in New York uh in New York City

with the exception of home healthcare

aids. It's all come to a screeching halt

over the past year. We've got to get

that going as well. So I'm going to be a

voice for getting uh jobs growing again

because it's going to drive tax revenue.

That won't be enough. We're also going

to have to have some efficiencies in

government and a little help from

Albany.

>> There is the line of thinking out there

that uh Mayor Mani might be exaggerating

the scope of the budget problems to

really make his case for tax hike which

is popular with his base of supporters

and then very unpopular uh with [snorts]

people outside his base. I mean, what do

you make of some of that?

>> We we have a real gap. Uh, and I'd

rather have a mayor who embraces it so

we can fix it than a mayor who just

tries to keep kicking the can down the

road. So, I I think this is good news.

Um, look, uh, I think that we've got to

get our fiscal house in order. I do

think we need more help from Albany. U,

everything needs to be on the table, I

would think, potentially including tax

increases. But, uh, you've hear you hear

me talk about some other priorities.

This is what I'm pushing for. I think

this is solvable. This is I don't use

the word crisis. I think this is a

challenge that we can solve with smart

policy.

>> I I just wonder you know even if you

agree that um you know prek uh should be

free and in a in a good wealthy society

it probably should be. Even if you agree

that uh local transportation should be

free which is I guess a nice to have.

even if you want to continue to pass out

an ever growing at 4% a month amount of

housing vouchers for people to live

here.

>> Isn't it uh when you're in a budget

deficit like this time to stop just

giving away so much money?

>> Look, we are definitely going to need a

little more discipline in New York

City's budget. You've heard me talk

about one of the programs and there's

many others. Um that doesn't mean we

can't do bold things and in the case of

child care, which I really do think New

York City needs. I think every place

should have it. Um the governor put

about a billion on the table to help us

start on that and and we can begin to

phase in a program like that. It's going

to take several years just building it

out logistically, but this is going to

be a tougher budget and uh I think we

can confront that. Still try to be

creative on addressing affordability and

more. Look, some of what we need to do

is not about the budget. We got to build

more housing.

>> We need a half million more units in New

York City. That's going to require in

part unleashing private sector

development as well. Uh it's not only

about what the public sector can do. We

need a partnership,

>> right? And we also need uh probably

better transportation from outside in so

that we don't build all that housing on

this tiny island, right? Uh there was

just uh uh and has been a a court case

about um building this new tunnel

project. Um have you thought about just

naming Penn Station or the Empire State

Building after President Trump and

trying to get money like that? I'm going

to be honest. I would take that trade

because we desperately need to invest in

this infrastructure and we could also

rename it after uh [laughter] this guy's

out of office. Uh what whatever it

takes. We need regional transportation

infrastructure and every single commuter

train stop should have residential

density around it. That would also help

alleviate the housing affordability

crisis within the five burrows of New

York