![\"Mayor](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/03\/000-new-3-k-seats-123236979_3ee208.jpg\")
Mayor Zohran Mamdani\u2019s budget plan has spurred a series of potentially devastating financial outlooks. Luiz C. Ribeiro for NY Post<\/p>\nA drop in the Big Apple\u2019s credit rating will come with a price tag of up to $200 million right off the bat \u2014 and could trigger a disastrous chain reaction that costs the city more than $14 billion, a new analysis shows.<\/p>\n
The study by the City Council warns that if major bond-rating companies follow through with their recent threat of a city downgrade, the move could devastate the city\u2019s annual refinancing ability.<\/p>\n
The current potential credit hit, the first since 2020, would increase the city government\u2019s borrowing rates from 6% to 6.25% \u2014 raising the interest fees by $3.6 billion over the lifespan of the city\u2019s various bonds, which total $65.5 billion.<\/p>\n
Mayor Zohran Mamdani\u2019s budget plan has spurred a series of potentially devastating financial outlooks. Luiz C. Ribeiro for NY Post<\/p>\n
But the internal report, obtained by The Post, issued an even more dire warning, saying that it\u2019s \u201cnot unusual\u201d for a downgrade to spark future poor ratings, and those could prove even more costly down the line.<\/p>\n
If the interest rates to tick up to 7%, the annual cost for interest alone on loans would balloon to another nearly half-million dollars each, to a tune of $14.1 billion over the lifespan of the massive tranche of bonds the city currently has.<\/p>\n
\u201cThe reality is, if there is a downgrade, it both increases the city borrowing cost \u2014 and we certainly borrow a lot for capital projects \u2014 and reduces the city\u2019s opportunity to refinance, which it does often,\u201d said Andrew Rein, the CBC\u2019s president.<\/p>\n
\u201cIt will cost the city some real money every year.\u201d<\/p>\n
![\"NYC](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/03\/021926-nyc-mayor-zohran-mamdani-121739638_ee4e82.jpg\")
City Council Speaker Julie Menin has repeatedly spoken out against the plan to pull from the city\u2019s savings to cover the expected budget shortfall. Matthew McDermott for NY Post<\/p>\n
The analysis was commissioned earlier this month after Moody\u2019s changed the city\u2019s credit rating to negative, a first step in potentially\u00a0lowering its AA rating, in response to the Mamdani administration\u2019s proposed pulling of $2.6 billion from its savings to prop up his massive<\/a> $127 billion budget.<\/p>\n Hizzoner\u2019s team scrambled in the days before the warning was issued, pleading with the debt-rating agency\u00a0to keep it from releasing its report, according to sources, who said City Hall even created a PowerPoint presentation to try to convince Moody\u2019s not to go ahead with the move.<\/p>\n