New York City’s mayor, Zohran Mamdani, a self-proclaimed democratic socialist, has made waves, albeit not for reasons he might want to celebrate. Just months into his tenure, Mamdani has missed a statutory budget deadline—a first since 2015—and declared a fiscal crisis of “historic magnitude.” Faced with a daunting $5.4 billion budget shortfall, he has turned to others for a financial lifeline, a move some might say aligns with his socialist principles.
On Tuesday, Mamdani and City Council Speaker Julie Menin stood at City Hall to announce a delay in the city’s executive budget. Initially due on May 1, the budget’s release has been postponed to May 12 as they urge Albany to provide a financial rescue for the city, which, under their preferred ideology, was expected to prosper.
The duo is advocating for increased direct state assistance and a reduction in the state’s pass-through entity tax credit. This adjustment, they argue, could bring nearly $1 billion in new revenue. Essentially, their plan involves slightly increasing taxes on business leaders, hoping it goes unnoticed.
Mamdani, known for his dramatic flair, set the stage with his characteristic rhetoric.
The term “inherited” plays a crucial role in his narrative. It’s like setting a kitchen ablaze and then faulting the previous owner for installing the stove. Former Mayor Eric Adams left behind $8 billion in reserves, but Mamdani’s administration contends these figures obscured more profound structural issues tied to persistent expenditures. Conveniently, Mamdani and his supporters assert that the former administration “tainted” the budget by underestimating future costs.
In response, Adams delivered a succinct two-word critique of Mamdani’s overarching governance approach.
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“New York City faces a budget crisis of a historic magnitude. We inherited a deficit larger than any since the Great Recession.”
Yes, he inherited it. That word, “inherited,” is doing an enormous amount of heavy lifting here. It’s the rhetorical equivalent of burning down a kitchen and then blaming the previous owner for installing a stove. Former Mayor Eric Adams left the city with $8 billion in reserves; Mamdani’s team has since claimed those numbers masked deeper structural issues tied to recurring expenses. Conveniently, Mamdani and his allies have argued that the prior administration “poisoned” the budget by underestimating long-term costs.
Adams, for his part, offered a pointed two-word rebuttal to Mamdani’s broader governing philosophy.
“Free is a lie.”
Truer words have rarely been spoken in New York City politics.
Mamdani insists the gap cannot be closed through cuts alone.
“We cannot close this deficit with savings alone. We need new revenue, and we need a structural reset in our relationship with the state.”
A “structural reset” means the city wants more money from Albany. The centerpiece of that ask is reducing the pass-through entity tax credit from 100 percent to 75 percent, a move Mamdani cheerfully framed as making “the wealthiest pay their fair share,” and which city officials claim would generate nearly $1 billion in new revenue. Governor Kathy Hochul, a Democrat who has nonetheless managed to retain a passing familiarity with economic reality, was having none of it.
“It’s not happening. We’re not changing PTET [Pass-Through Entity Tax].”
She also pushed back on the idea that the state’s delayed budget should dictate the city’s timeline.
“We don’t have to be done in order for you to do yours. We’re on different timetables.”
Hochul noted that the state has already handed the city more than $4 billion in assistance, including $1.5 billion in direct aid, $1.2 billion in child care funding, and a proposed pied-à-terre tax on expensive second homes expected to generate another $500 million. She has also, by her own count, urged city leaders to find spending reductions in “January, February, March, and April.” The advice, apparently, has yet to land.
To be fair, Mamdani and Menin do point to a measurable imbalance. New York City contributes 55.6 percent of state revenue but receives 41.7 percent of state expenditures.
But the mayor has also made clear he has no intention of scaling back his sweeping progressive agenda, one that, by his own admission, would require billions in additional spending beyond the $12 billion needed to close the current gap. He said as much in January: “We will not allow the failures of the prior administration to dull the ambitions of our own.”
So to recap: New York City has a $5.4 billion hole, a mayor who won’t cut spending, a governor who won’t raise taxes, and a budget deadline quietly pushed to mid-May. The first act of the Mamdani administration’s grand socialist experiment has produced exactly what critics predicted: not abundance, but a very expensive bill handed to everyone else.
As Adams put it: Free is a lie.
Editor’s Note: New York City is now facing the consequences of Mayor Zohran Mamdani’s socialist takeover.
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