Mayor Zohran Mamdani is amping up pressure on Governor Kathy Hochul to hike taxes for the richest residents and corporations, asking the state to send billions more in aid to New York City as he faces mounting budget holes.
Mamdani, the newly-sworn in democratic socialist, is arguing additional money from the state is necessary because the city faces a fiscal “crisis” created by his predecessor Eric Adams and by a push from former Governor Andrew Cuomo to shift costs from the state onto the city. Both Cuomo and Adams ran against Mamdani in last year’s mayoral election.
Over two years, New York is staring down a $12.6 billion budget gap, facing what Mamdani has described as the largest deficit since the Great Recession in 2008.
“These budget gaps did not arrive by accident — they are the direct consequence of Eric Adams staggering fiscal mismanagement,” Mamdani said in an interview. He said aid to the poor and rental assistance funding for the city’s homeless have been underbudgeted.
The Adams administration when in office defended its fiscal management, saying the city rebounded from the Covid-19 downturn to one of its strongest economies in years.
Mamdani is launching a new campaign on Wednesday to lobby Albany for increased annual aid, emphasizing that New York generates $21 billion more in revenue for the state than it receives. That push sets up a potential conflict with Hochul, who didn’t include new taxes on companies or high-income residents in her budget proposal.
Hochul is running for reelection in November and has insisted for months she would not raise levies, facing pressure from the business community and her likely gubernatorial opponent Republican Nassau County Executive Bruce Blakeman.
Meanwhile, Mamdani campaigned on raising income tax rates by 2 percentage points on people earning more than $1 million a year, and for lifting corporate tax rates by 4 percentage points. New York City businesses already pay a top tax rate of 17.44%, according to new data set to be released this week by the Citizens Budget Commission, an advocacy group. The CBC also found the state has the highest per capita tax rate in the country.
“We must raise taxes on the wealthiest few in New York City so that we can invest in the many,” Mamdani said. “No longer can this city, the economic engine of our state, sustain this kind of an imbalance.”
Mamdani also said he is open to the possibility of a wealth tax, similar to the one proposed in California, that would levy a one-time 5% tax on billionaires, if it qualifies for the ballot and is approved by voters this year.
State Budget Funds
Hochul has already delivered a key win to Mamdani in the first month of his term — committing state money to fund two years of childcare for New York City’s two-year-olds. That fulfills at least part of one of his marquee campaign pledges — to enact a universal childcare program for all New York City children aged six weeks to 5 years.
Mamdani and Hochul have so far been friendly, with the mayor praising her for adding millions of dollars into the spending plan to replace federal funding for SNAP benefits cut by President Donald Trump’s administration.
The state’s budget coffers are overflowing this year — New York garnered $17 billion more in tax revenue than it anticipated it would get a year ago — largely because of plentiful income tax receipts and Wall Street bonus revenue, as well as the performance of the stock market, which was buoyed by artificial intelligence companies.
State budget officials said last week they were keeping some funds in reserve in the event of an economic downturn or further federal cuts, but Mamdani argued the state could simultaneously spare funds for the city and also save for the future.
“It’s important for all of us to be fiscally responsible in a moment such as this,” Mamdani said. “That fiscal responsibility also extends to ensuring that the city has a balanced budget for two fiscal years.”
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