NYC Budget Balanced, Deficit Reduced to Zero

New York City Mayor Zohran Mamdani said Tuesday his team has balanced New York City's budget, closing a budget gap of more than $12 billion that he says he inherited. Mamdani said his preliminary budget proposal released 12 weeks ago, "reflected a straightforward reality. New York City was reckoning with an historic budget gap." Watch the mayor's budget address To tackle it, Mamdani sought more money from Albany, and threatened to raise property taxes in NYC. "In the month that followed, we took aggressive steps to tackle the deficit, and drove it down to $5.4 billion. Today, after three more months of painstaking work, I am proud to announce that we have closed the gap entirely down to zero. It has not been easy, but we have balanced the budget, and we have done so without placing the burden on the backs of working New Yorkers," Mamdani said. "We pulled New York City back from an existential fiscal break" His new $124.7 billion budget proposal does not include property tax hikes, he said. "Here's how we did it. We scoured for savings and demanded greater efficiency from every part of city government. We partnered with Albany, securing billions in new funding, and reversing many of the cost burdens that Andrew Cuomo shifted to the city over his decade as governor. And we taxed the rich, asking those with the most to contribute a little bit more to support those with the least," Mamdani said. "We pulled New York City back from an existential fiscal break." Mamdani praised Gov. Kathy Hochul. "For years, the relationship between City Hall and Albany has been defined by dysfunction and infighting. Governor Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve. So we have worked together through every step of this process," Mamdani said. Mamdani went on to thank State Senate Majority Leader Andrea Stewart Cousins, Assembly Speaker Carl Heastie and City Council Speaker Julie Menin. "And finally, I want to thank the movement that carried us to City Hall, not only for winning an election, but for continuing to demand that the power we won be used to improve the lives of the many, rather than to protect the interests of the few," Mamdani said. Mamdani won't tap into the city's "rainy day fund" to balance the budget. Sources in Albany say New York City asked for a new tax on cash sales of luxury apartments valued over $1 million, which is expected to raise $100 million. Sources in the state legislature say approval of this tax is in play. Mamdani lauded the work of the chief savings officers his administration created in each agency. Cumulatively, they identified $1.75 billion in savings, the mayor said. Mamdani said his budget doesn't cut services, either, but saves money by finding efficiencies. "I see this as a win, not just for our administration, but for the city of New York. A win to ensure that the city is back on firm financial footing, and it's doing so by taxing the rich, by creating a fairer relationship with Albany, by finally accounting for the mismanagement we'd seen in prior years and embarking on a new chapter of an approach to budgeting that is honest and that is actually building for long term stability," Mamdani said. State helping to close NYC's budget gap Hochul and Mamdani announced the state secured an additional $4 billion to help with the deficit. This brings the total new state assistance to nearly $8 billion over two years. "With this latest agreement, the Mamdani administration will officially close the more than $12 billion deficit it inherited from the previous administration, stabilizing the City's finances while advancing investments that make New York more affordable for working people," a news release stated. Hochul's opponent in the New York governor's race, Republican Nassau County Executive Bruce Blakeman, blasted that move, calling it a "daylight robbery." "Kathy Hochul just committed the largest daylight robbery in New York history, looting $4 billion from your family's grocery and rent budget to bankroll Zohran Mamdani's socialist experiment," Blakeman said in a statement. "She's taking money from police and schools around the state to fund a radical agenda, but when I'm Governor, the stealing stops. I'll cut your taxes, slash your utility bills in half, and put your hard-earned money back where it belongs—in your pocket, not Mamdani's." While the state budget is still being negotiated, it already has $28 billion carved out in total aid for the city. "With this governor, what we've seen, however, is a commitment to the city, and in a moment where we inherited an incredible fiscal deficit, we've seen her partnership in helping us bridge that," Mamdani said. Mamdani's promises meet political reality It's a pivotal moment for New York City's new democratic socialist mayor, who ran - and won - on the idea of taxing the rich, which Hochul vowed not to support. Raising property taxes is the only increase the city could authorize without Albany, but without Menin's backing, sources say that plan is also hitting a dead end. Mamdani appears to have found a third path to close the $5.4 billion shortfall for the 2027 budget, which includes the newly-announced $4 billion in state aid. Education costs and the budget Mamdani says he has asked Albany to extend the deadline to meet the mandate to reduce class sizes. Sources in Albany say the legislature is looking to delay the implementation of the class size reduction, which would save as much as $1 billion. What's more, the mayor has asked for a 4-year extension on mayoral control of schools, but Albany sources say he'll only receive two. The city's movers and shakers will be keeping a close eye on the so-called pied-à-terre tax, targeting luxury, non-primary residences in the city. The tax proposal would add an estimated $500 million annually in city revenue, and is already drawing sharp criticism from billionaires like Citadel CEO Ken Griffin. Griffin became the poster boy for the tax when Mamdani called him out by name in front of his $238 million penthouse. "With 1% of New York taxpayers paying 45% of all the taxes, the city is in a precarious position if they make those who create value feel like they're best off moving their businesses and their lives to other jurisdictions," Griffin said in an interview on CNBC. Details like the tax rate, who exactly will pay, and whether it will be based on assessed value or actual market value have not been worked out. All morning, the mayor has been holding meetings with the city's top leaders, including Menin, Public Advocate Jumaane Williams, and borough presidents, trying to find common ground on the top budget priorities, with billions on the line. contributed to this report.