On February 17, New York City Mayor Zohran Mamdani released his Fiscal Year 2027 Preliminary Budget, which includes $14 billion in new spending, bringing the grand total of what he wants to spend in FY 2027 to more than $127 billion.
Mamdani notes that he “inherited” a “fiscal crisis” “from the prior Administration,” which is true. However, his so-called solution is to increase discretionary spending far more while significantly raising New York City property taxes.
“There are two paths to bridge the city’s inherited budget gap. The first path is the most sustainable and fairest: raising taxes on the wealthiest and corporations, and ending the drain by fixing the imbalance between what the City provides the State and what we receive in return,” Mamdani said.
As of now, NYC is on the verge of bankruptcy—again. Believe it or not, NYC went “bankrupt” in 1975.
According to NYC Comptroller Mark Levine, “the City faces a $2.2 billion budget shortfall for FY2026 and a projected $10.4 billion gap for FY2027.” “This is the first time since the Great Recession that the City faces a budget shortfall of this magnitude,” he warned.
Despite the massive looming deficit, Mamdani is prioritizing several socialist spending priorities, like $11.9 million for “new Street Health Outreach & Wellness (SHOW) mobile units,” $43.3 million “to advance affordability efforts,” “more than tripling baseline funding for HRA’s Community Food Connection program with an addition of $54 million,” and $662 million “to modernize and preserve more than 3,200 affordable housing.”
Mamdani also wants to spend $3.27 billion on “green schools.”
Given the fact that NYC faces a $12 billion shortfall over the next two years and pays nearly $8 billion per year in debt service payments alone, it would seem obvious that adding more spending will just dig the hole deeper.
But like all socialists, Mamdani prefers “balancing the budget” with more revenue.
So far, NYC has been bailed out to some degree by Gov. Kathy Hochul’s decision to “allocate an additional $1.5 billion in operating expenses over two years to help address New York City’s fiscal challenges.”
Mamdani also wants to raid “$980 million from the city’s Rainy Day Reserve Fund in FY 2026 and $229 million from the Retiree Health Benefit Trust in FY 2027 in order to balance the budget as legally required.”
But Albany’s $1.5 billion bailout, robbing the rainy-day fund and plundering the public pension trust, will not come even close to bridging the present budget gap.
In order for the math to math, Mamdani needs to raise taxes.
Specifically, Mamdani proposes raising NYC property taxes by 9.5 percent.
Whereas Mamdani wants to tout his tax as soaking the rich and making the wealthy pay their fair share, it will actually increase an already excessive property tax burden on all New Yorkers.
In response, Comptroller Levine said, “To rely on a property tax increase and a significant draw-down of reserves to close our gap would have dire consequences. Our property tax system is profoundly unfair and inconsistent, and an across-the-board increase in this tax would be regressive. Drawing down reserves during a period of economic growth would leave us vulnerable to economic turbulence next year.”
Mamdani’s tax proposal, which would certainly fall upon middle- and lower-income residents, is also receiving backlash from the New York City Council.
“At a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever,” said New York City Council Speaker Julie Menin.
Even Gov. Hochul has said tax increases are a non-starter.
So, how will Mamdani pay for his democratic socialist agenda? The simple answer is that he cannot.
The only way for NYC to afford Mamdani’s socialist policies would be to raise taxes, which he alone cannot do.
It was easy for Mamdani to spout socialist slogans during the campaign. It was easy for him to promise freebies when he did not have to explain how he would actually pay for all the free stuff he promised.
But now, the rubber is meeting the road.
Mayor Mamdani is facing the reality that all socialists ultimately realize. As Margaret Thatcher so eloquently put it: “The problem with socialism is that you eventually run out of other people's money.”
Yes, even New York City, home to Wall Street and the financial hub of the world, cannot afford socialism.
Chris Talgo (ctalgo@heartland.org) is editorial director at The Heartland Institute.
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