NYC Mayor Zohran Mamdani calls for tax hike on richest residents, corporations to fix massive budget deficit

Mayor Zohran Mamdani is calling for a tax hike on New York City's wealthiest residents and corporations to close a massive budget gap.

At a town hall Wednesday morning, Mamdani demanded state approval of new taxes on the rich and corporations, setting himself up on a collision course with Gov. Kathy Hochul, who is facing reelection and has already pointedly said no to tax hikes.

"The time has come to tax the richest New Yorkers and most profitable corporations," he said.  

The mayor said he's not too worried about a business exodus if there is a tax increase. He said he's more concerned about working-class residents leaving the city because of the high cost of living.

"What we are going to do is exhaust every option to make it clear that the time has come to reset the relationship between the city, its wealthiest residents, its most profitable corporations and with Albany," Mamdani said.

"This is the Adams budget crisis"

While making his announcement, Mamdani went on a blaming spree, accusing, among others, former Mayor Eric Adams' administration of mismanagement, in part, for the massive $12 billion deficit.

"This crisis has a name and a chief architect. In the words of the Jackson 5, it's as easy as ABC. This is the Adams budget crisis," Mamdani said. "He systematically under-budgeted services that New Yorkers rely on every single day."

Mamdani also blamed former Gov. Andrew Cuomo for fiscal practices that shortchanged the city.

"Andrew Cuomo extracted our city's resources. The result is a stunning fiscal imbalance. New Yorkers contribute 54.5% of state revenue and receive only 40.5% back," Mamdani said.

The Adams and Cuomo camps did not take Mamdani's accusations well.

A spokesperson for Adams said the former mayor inherited a $10 billion debt that was compounded by the COVID-19 pandemic.

"Despite these challenges, Mayor Adams led a real recovery through steady leadership and tough decisions. Blaming him for decades-old city-state funding inequities is inaccurate and disingenuous," Todd Shapiro said.

Cuomo spokesperson Rich Azzopardi said Cuomo "hasn't been governor for the last five years ... the exact amount of time that Mamdani, as a state legislator, was in a position to correct any perceived inequalities -- except he couldn't even be bothered to show up for work."

Largest NYC budget gap since Great Recession

New York City Comptroller Mark Levine said on Jan. 16 that the city faces a budget shortfall of $2.2 billion this fiscal year and $10.4 billion in the 2027 fiscal year, adding it's the largest gap since the Great Recession in 2008.

Levine also blamed the Adams administration, saying its spending led to the high budget projections for the next two years.

"We're also calling out the cause of this gap, which was the budget practices of the previous administration, over-reliance on one-shot financial measures, such as drawing down on prepaid expenses, and especially by underaccounting for expenses that we know the city will [incur], such as overtime pay, such as shelter costs," Levine said.   

The state's comptroller, Thomas DiNapoli, said budget gaps were previously understated.

"Given federal funding uncertainty, New York City must plan defensively and be clear about the numbers. I commend Mayor Mamdani for speaking plainly about these stark fiscal realities," DiNapoli said.

Fulfilling a campaign promise

Mamdani's mayoral campaign centered around reducing the cost of living for residents. He promised to freeze the rent for the city's rent-stabilized units and to provide free bus services.

To pay for those proposals, Mamdani previously said he would raise taxes on corporations to 11.5%. He also said he would institute a 2% tax rate for individuals earning $1 million or more.