Mayor Zohran Mamdani makes a show of budget cuts, with videos of himself looking for millions under sofa cushions.
He pretends he is leaving no stone unturned to close the $5.4 billion budget gap.
Don’t buy it. These are signs meant to suggest the city has pulled out all the stops, giving Albany cover to secure what it hopes will come next: Mamdani’s tax hike on high earners and renters.
Of course, reducing government spending at a low rate requires borrowing, but the problem is that Mamdani’s savings are often speculative or trivial.
Even the biggest cut to date, $100 million in cuts to ineligible health care dependents, will only happen. if auditors find such people.
And even if he reaps all the $1.7 billion in savings he wants, so be it still leave that $5.4 billion hole untouched.
In other words, his budget assumes those savings are real, even though they may not be visible, leaving not a $5.4 billion but a $7.1 billion gap.
Meanwhile, he will be spending on things like a three-year, $1.86 billion, no-bid agreement with the hotel industry to provide shelters for the homeless, including immigrants, who now have no time to stay.
Somehow he got another $260 million for the “Mayor’s Office of Public Safety,” an office with only two employees.
But don’t worry: You’re worth $20,000 taken out of Slack for taxi commissions. Give me a break.
New York City can’t raise income or business taxes on its own, so he’s asking for a little help from his remaining friends in Albany.
With the state’s April 1 budget deadline looming, legislative leaders and Gov. Kathy Hochul will kick negotiations into high gear, including tax talk.
The Legislature’s one-house budget plans will add nearly $17.5 billion in new federal spending next fiscal year — despite a $20 billion structural deficit — according to a new report by the Citizens Budget Commission.
To pay for it, lawmakers are pushing aggressive tax increases, including the city’s top four taxes directly on Mamdani’s wish list.
The Tax Foundation already rates New York last in tax competitiveness among the states.
The Legislature’s doubling down on business taxes — literally, at a combined city-state rate nearly double that of New Jersey — will only pressure firms to scale back work or avoid New York altogether.
Those who earn millions already face the highest state and local income tax rates in the country.
As EJ McMahon of the Manhattan Institute recently pointed out, once federal funds are accounted for, New York’s combined tax rate is higher than ever.
To his credit, Hochul gets this. This month, he told a crowd to bring New York immigrants back to Palm Beach, noting that federal taxes have eroded.
He knows that any new taxes will hurt the state’s already flagging economy, reducing any good – if any – from Mamdani’s spending.
There is more than enough room in the city budget to prevent tax increases and deterioration in existing services.
Even so, Mamdani tied the knot to avoid being called a difficult mayor.
He can’t cut labor costs — wages, health benefits, pensions — that make up a large portion of the city’s budget. Hochul has to do it.
The mayor hasn’t even started talking about hiring freezes, let alone cutting 330,000 city workers or using technology to become more efficient.
Then, any tax increase would effectively subsidize low-productivity jobs that would be the first in a bid to decide if the mayor should really cut back and use the city’s workforce in ways that deliver better public value.
If Hochul agrees now, it will take a New York moment before the mayor returns with his tin cup.
After all, Mamdani is asking to ride horses that won’t even fund his expensive campaign promises like free buses and childcare all over the world.
Nor should City Council Speaker Julie Menin — who has so far shown admirable courage against the mayor and his friends in the Democratic Socialists of America — allow his attempt to raid the rainy-day fund or trick him into raising property taxes by 9.5%.
If Mamdani will not make transactions that bring spending in line with the city’s already large income, at a time when there is no recession or financial crisis, it will only make future budgets ineffective – especially those coming soon that will require billions of labor negotiations.
For the far left, of course, there is no money and no tax rate always enough. They have to be told no – over and over again.
Hochul and Menin cannot allow Mamdani to skip the hard parts of his job and force hardworking taxpayers to do hard work.
John Ketcham is director of cities and legal policy fellow at the Manhattan Institute.
