NEW YORK (WABC) — Mayor Zohran Mamdani is in a pickle – he needs to close a $5.5 billion budget shortfall while still funding the popular social programs he was elected on – including expanded child care and affordable housing.<\/p>\n
It’s a tough balancing act that has him now grappling with Albany, the City Council and the expectations of voters.<\/p>\n
One of Mamdani’s initial proposals – a 9.5% property tax increase – was so immediately unpopular he appeared to back off.<\/p>\n
“I shared in the rejection of a property tax hike when we put forward our preliminary budget on February 17, I said then, what I’ll say now, which is that it is a path of last resort,” Mamdani said earlier this week.<\/p>\n
The City Council speaker has taken a clear stance.<\/p>\n
“We have said a hard no to raising property taxes,” said council speaker Julie Menin. “If we were to do that, we would be hurting Black communities across our city.”<\/p>\n
The City Council even responded with an alternate budget, but it’s one that Mamdani says doesn’t add up.<\/p>\n
But what are his preferred methods of raising revenue?<\/p>\n
They include a 2% personal income tax increase for those earning $1 million or more to 5.88%.<\/p>\n
And a 1.8% corporate tax raise for financial firms to 10.8%.<\/p>\n
When state and city taxes are combined, New York City has the highest marginal income tax rate in the U.S., but it’s in range for economic powerhouses.<\/p>\n
Even so, business leaders warn of flight.<\/p>\n
“Jamie Diamond, David Solomon, you had Apollo, a week ago talking about opening a second headquarters,” said Steve Fulop, CEO of Partnership for the City of New York. “These are people that love New York City. Jamie Diamond grew up in New York City. I mean, there’s probably no bigger cheerleader here. So when he’s telling you that there are risks to the city, people would be wise to listen.”<\/p>\n
Political strategist Hank Sheinkopf has worked on hundreds of pollical campaigns. Eyewitness News asked him what happens if Mamdani doesn’t make the budget work and continues to kick it down the road.<\/p>\n
“He can’t. That’s the point. That’s a function of the 1975 fiscal meltdown of New York City,” Sheinkopf said. “He has to have a balanced budget. If he doesn’t, the governor has to intervene by law.”<\/p>\n
And that’s something that Sheinkopf says Mamdani won’t want.<\/p>\n
“He’s extraordinarily smart and he’s got to somehow meet the plans, even symbolically, that he told people he would, to get elected,” Sheinkopf said.<\/p>\n
So what’s an idealistic, popular young mayor to do?<\/p>\n
“Cut the budget, cut some of the things you don’t need,” Sheinkopf said.<\/p>\n
Without any cuts, the mayor needs Albany for his tax plan, but so far, Gov. Kathy Hochul, who is doing her own budget dance, has not warmed to any tax hikes.<\/p>\n
The only tax increase Mamdani can unilaterally impose without Albany’s approval is the unpopular property tax – which is why he’s calling it the nuclear option.<\/p>\n
But there’s still plenty of time for haggling ahead as the budget typically comes together in June, with a deadline at the end of that month.<\/p>\n
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