On Tuesday, Mayor Zohran Mamdani and City Council Speaker Julie Menin reached a record $125.8 billion budget deal for fiscal 2027 that began the following day.<\/p>\n
The mayor boasted<\/a>: \u201cSocialists not only understand economics just as well as the capitalists who came before, but . . . we can solve their years of mismanagement through an embrace of our principles.\u201d<\/p>\n Spare us the propaganda, Mr. Mayor. The city budget isn\u2019t in great shape.<\/p>\n Lest anyone be fooled, Mamdani\u2019s supposedly balanced budget rests on a series of one-time tricks that got him through this year \u2014 and won\u2019t be available in the next.<\/p>\n Remember back in January when he claimed he\u2019d inherited a $12 billion deficit<\/a>?<\/p>\n A prudent budgeter would have identified the lowest-value uses of money and trimmed accordingly.<\/p>\n Not Mamdani.<\/p>\n Despite robust tax receipts, he labeled his inability to grow government even more of a \u201cfiscal emergency.\u201d<\/p>\n He started demanding higher taxes<\/a> on corporations and high earners from the state \u2014 which, thanks to Gov. Kathy Hochul\u2019s caution, he didn\u2019t get.<\/p>\n Now he claims he balanced the budget with the help of pension-contribution \u201csavings,\u201d but in truth, as Manhattan Institute\u2019s Ken Girardin explained<\/a>, he merely dodged today\u2019s bill by dumping a bigger one on tomorrow\u2019s taxpayers.<\/p>\n To avoid making $2 billion a year in pension contributions over his two possible terms, Mamdani is forcing his successor to absorb about $7 billion in unnecessary interest costs between 2033 and 2037.<\/p>\n What kind of financial whiz makes smaller credit-card payments today just to get killed on interest later?<\/p>\n Mamdani also re-estimated expenses lower and agreed to Albany\u2019s delaying its school class-size mandate<\/a>.<\/p>\n In the end, he and the council wound up spending 8.5% more than last year\u2019s $116 billion budget<\/a>.<\/p>\n Just between the mayor\u2019s proposal in May and the final deal, fiscal 2027 spending grew by $1.4 billion on various agency programs.<\/p>\n Some \u201cemergency.\u201d<\/p>\n Meanwhile, City Comptroller Mark Levine\u2019s latest report reveals the city\u2019s mounting cash-flow issues.<\/p>\n During the first nine months of fiscal 2026, average cash balances declined by over $2.4 billion from the year-ago period.<\/p>\n Expenditure growth of 8% far outpaced receipt growth of 2.8%.<\/p>\n \t\t\t\t\t\t\tStart your day with all you need to know\t\t\t\t\t\t<\/p>\n \n\t\t\t\t\t\t\tMorning Report delivers the latest news, videos, photos and more.\t\t\t\t\t\t<\/p>\n \t\t\t\t\t\tThanks for signing up!\n\t\t\t\t<\/p>\n By failing to address this unsustainable structural imbalance, Mamdani will be back where he started come January.<\/p>\n By the mayor\u2019s own estimate, he\u2019ll face a $6.4 billion hole in the next fiscal year. Levine puts the figure at $8.8 billion.<\/p>\n Worse, private-sector jobs growth is stagnating<\/a> \u2014 and next year, the one-time gimmicks won\u2019t be available.<\/p>\n Yet the mayor will need to come up with even more money.<\/p>\n Municipal-employee contracts are expiring, so the unions will soon have their hands out for a good deal \u2014 and currently, the city\u2019s labor reserve only has enough for paltry 1.25% raises.<\/p>\n To give workers more, Mamdani will need to raise additional cash, or demand productivity gains to make up the difference.<\/p>\n It\u2019s easy to predict that he\u2019ll run back to Albany to rattle the tin cup harder.<\/p>\n With Hochul free from the pressures of an election year, the mayor will almost certainly press her again to tax the rich and give him more funding.<\/p>\n The similarly ballooning state budget, however, is facing down an $18 billion structural imbalance between now and 2030, according to the Citizens Budget Commission.<\/p>\n Despite adding $350 million to reserves in the budget deal, Mamdani might seek to raid the rainy-day fund again next year.<\/p>\n Even if he doesn\u2019t, though, it\u2019s woefully underfunded to weather a potential recession or even a revenue downturn.<\/p>\n Despite his general reluctance to trim headcount, Mamdani understands that not hiring new employees yields fiscal benefits \u2014 at least when it comes to cops.<\/p>\n In response to pressure from his radically anti-police democratic socialist base, Mamdani reversed plans to add 580 officers<\/a>, overriding strong disagreement from Menin.<\/p>\n But both Mamdani and the City Council must internalize that budgetary health depends on controlling expenses.<\/p>\n