This post was originally published on this site.
The Big Apple was in the red — even before the socialist takeover.
New York City is facing a mammoth $12 billion budget deficit in the next two years, new City Comptroller Mark Levine warned Friday — grimly comparing the outlook to the 2008 financial crisis.
Mayor Zohran Mamdani quickly used the dire forecast to push to his “tax the rich” dream, despite the comptroller’s numbers showing that spending is the problem, not the city’s revenue.
The city’s mid-year budget gap for the 2026 fiscal year ending in June is an “extremely unusual” $2.2 billion, Levine said.
The coming 2027 fiscal year faces an even-worse $10.4 billion shortfall, the comptroller said — even before the Democratic socialist mayor unveils his first spending plan.
“This is far beyond what we saw last year and I believe in any year since the 2008 financial crisis,” Levine said during a briefing in the city’s Municipal Building.
“We’re not going to sugarcoat this. This is a challenging budget outlook to have a mid-year gap. Again, this is quite unusual to have a gap of the scale that we’re projecting for next year,” he said.
“[It’s] something we haven’t seen outside of an economic slowdown in New York City,” Levine added. “Certainly not in an environment where we have such strong tax receipts.”
Indeed, city tax revenues increased nearly 7% during the 2026 fiscal year, the financial oversight boss said.
“This wasn’t caused by a bad economy — it’s the result of budgeting decisions from the previous administration that we must now deal with,” Levine said.
Mamdani is poised to deliver his first budget plan as mayor by February. His ambitious agenda ultimately promises $10 billion in freebies, from universal child care to free buses, largely relying on hypothetical state funding from higher taxes on the wealthy.
But Gov. Kathy Hochul has repeatedly made clear she won’t support Mamdani’s push to tax the rich, even as she jumped onto his universal child care push during her “State of the State” address Tuesday.
After the Hochul’s agenda-setting speech, Mamdani publicly split with the governor over taxes.
He did so again when faced with Levine’s projections.
“As I said on Tuesday, we believe raising taxes on the wealthiest New Yorkers and corporations will be necessary,” Hizzoner said in a statement Friday.
He blamed his predecessor, former Mayor Eric Adams, for the combined $12 billion budget hole, accusing his administration of deep fiscal mismanagement.
Mamdani, a former Queens state Assemblyman, also trained his fire at his mayoral election rival Andrew Cuomo, arguing the former governor and Albany used the city as a statewide piggy bank.
“We have long said that what we are inheriting is not just an administration that exhibited incredible fiscal mismanagement, but also a decades-long effort from former Governor Cuomo to pilfer from city coffers at each and every turn,” he said.
“And what that has left this city with is, as described by the comptroller, not only a fiscal hole, but frankly, a relationship between city and state, where the city contributes 54.5% of the state’s tax revenues, but only receives 40.5% in return.”
Levine, the city’s main financial watchdog and former Manhattan borough president, squarely blamed Adams, saying his administration relied on one-shot spending tricks and chronically underbudgeting expenses to paper over fiscal hitches.
Even though tax revenues have consistently grown year-over-year — hitting $81.4 billion in the 2025 fiscal year — expenditures swelled even more, Levine’s analysis found.
The city has layered new programs on top of others without eliminating lower-priority or lower-impact spending for years, argued Andrew Rein, president of the Citizens Budget Commission.
“The result is spending growth twice the rate of inflation,” he said in a statement. “City spending would be $14.5 billion lower today if it had tracked inflation.”
Rein noted his group’s projection of an $8 billion budget gap for the 2027 fiscal year is lower than Levine’s, but contended the problem still won’t disappear on its own.
He said Mamdani’s first task should be to comb through city program and shrink those that don’t deliver. The state should also repeal a costly class-size mandate for schools, he argued.
“It is important that New York deliver high-quality cost-effective services,” he said. “That requires making smart but tough choices—prioritizing what works and shrinking what doesn’t—before turning to the easier option of raising taxes.”
Levine’s analysis found the problem was made worse by Adams officials understating expenditures with each bite at the budgetary apple, according to the analysis.
The underbudgeting in the 2026 fiscal year included $795 million for rental assistance, $727 million for city employees’ overtime and $630 million for homeless shelters, according to the comptroller’s office.
Altogether, $3.8 billion was simply not budgeted during the current fiscal year — and those amounts will increase drastically in the years to come, the analysis found.
Adams’ spokesman Todd Shapiro argued the former mayor inherited billions of dollars in debt after the COVID pandemic. He noted the city also absorbed further billions during the migrant crisis.
“Despite these unprecedented challenges, Mayor Adams led a historic comeback,” Shapiro said.
“Blaming Mayor Adams for long-standing structural budget gaps and fiscal pressures ignores the reality of what this administration took on and what it has delivered.”
The comptroller’s estimates didn’t even include a multi-billion dollar spending commitment from expanding the City Fighting Homelessness and Eviction Prevention Supplement rental assistance program, better known as CityFHEPS — an expense Adams fought to avoid.
The City Council overrode Adams’ veto in 2023 of legislation to greatly expand who qualifies for program.
Depending on a future court ruling, putting the program in place could cost an estimated $6 to $20 billion, according to the comptroller’s office.
A deficit of more than $100 million could trigger action by the state’s Financial Control Board — a body created after the city’s near-bankruptcy in the 1970s.
Cuomo’s dogged mouthpiece Rich Azzopardi refuted Mamdani’s claims that the former three term Democratic governor was to blame.
“As usual, Zohran Mamdani’s claims are untethered from the facts,” he said in a statement, noting state aid to city schools rose under Cuomo and that the state “absorbed billions in New York City Medicaid cost increases.”
“If Mamdani thinks the system is unfair, he’s had five years in office to do something about it.”
— Additional reporting by David DeTurris