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<\/a>New York City Mayor Zohran Mamdani (Lori Van Buren\/Times Union)<\/p>\nNew York City Mayor Zohran Mamdani said last month that his administration was facing a $12 billion budget gap and needed state assistance to fill it.<\/p>\n
He\u2019s attributed that gap to under budgeting by former Mayor Eric Adams, referring to the deficit as ABC \u2014 the Adams Budget Crisis. But without the invention of a time machine, there\u2019s nothing Mamdani can do about that.<\/p>\n
Two weeks later, the city\u2019s budget gap has changed by quite a bit. Mamdani said it\u2019s now $5 billion smaller, leaving the city\u2019s two-year deficit at $7 billion (he will release updated figures on Feb. 17).<\/p>\n
About $3 billion of that $5 billion is due to higher income tax receipts than the city expected. Another $1 billion came from \u201can aggressive savings plan,\u201d and the remainder is being taken from the city\u2019s reserves.<\/p>\n
First Deputy Mayor Dean Fuleihan said that picture could continue to improve in the coming months if income tax receipts remain higher than expected. That doesn\u2019t mean the city is out of the woods, Mamdani said.<\/p>\n
\u201cHowever, New York City is still placed on a ledge,\u201d Mamdani said. \u201cThe most responsible way off is with dedicated recurring revenue that can provide the services New Yorkers deserve.\u201d<\/p>\n
It\u2019s not news that Mamdani is seeking a 2% increase in the New York City personal income tax rate to generate that revenue. He\u2019s also asking for an increase in the corporate tax rate.<\/p>\n
Both options would require permission from the state Legislature, which has supported tax hikes on high-income earners in recent years, and Gov. Kathy Hochul, who\u2019s opposed those tax hikes but hasn\u2019t ruled out a corporate tax increase.<\/p>\n
But Mamdani isn\u2019t asking solely for the state Legislature to allow those tax increases. He\u2019s also seeking an overall reset between New York City and the state government.<\/p>\n