{"id":27845,"date":"2026-05-12T21:30:11","date_gmt":"2026-05-12T21:30:11","guid":{"rendered":"https:\/\/www.europesays.com\/news\/27845\/"},"modified":"2026-05-12T21:30:11","modified_gmt":"2026-05-12T21:30:11","slug":"how-mamdani-and-hochul-are-solving-new-york-citys-budget-crisis","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/news\/27845\/","title":{"rendered":"How Mamdani and Hochul Are Solving New York City\u2019s Budget Crisis"},"content":{"rendered":"

Three months after Zohran Mamdani claimed<\/a> New York City was facing a budgetary crisis of generational proportions, the mayor announced on Tuesday that he had closed the gap, thanks to an infusion of state resources from Gov. Kathy Hochul and some routine belt tightening.<\/p>\n

The announcement came as the mayor released his first executive budget, which totals about $125 billion for the coming fiscal year. The spending plan, which is still subject to change before the City Council ratifies it by a June 30 deadline, comes amid a lackluster job market and an uncertain economic forecast made hazier by the war with Iran.<\/p>\n

Like any budget, and particularly any mayor\u2019s first, this budget has also come with its share of drama, political missteps and unfulfilled campaign promises.<\/p>\n

As she runs for re-election, Hochul comes to the rescue<\/p>\n

Past mayors and governors allowed poisonous interpersonal dynamics<\/a> to hamper their ability to deliver for city residents. By endorsing<\/a> Ms. Hochul early for re-election this year, and working with her to expand child care funding, Mr. Mamdani is now enjoying the fruits of a relatively positive relationship<\/a> with the governor.<\/p>\n

Earlier this year, Ms. Hochul committed $1.5 billion in state aid for a host of municipal services. The state budget<\/a>, which has not yet been finalized,<\/a> is also expected to include a host of policy changes and revenue increases that will funnel another $4 billion to the city over the next two years.<\/p>\n

The largest share \u2014 about $2.3 billion over two years \u2014 is expected to come from the city\u2019s delaying<\/a> certain pension payments, a change that requires state approval and buy-in from municipal unions.<\/p>\n

The mayor and governor also expect another half-billion dollars to flow from the new tax surcharge on second homes worth more than $5 million that Ms. Hochul recently announced.<\/a> But the city comptroller recently argued<\/a> that number might be overly optimistic, and New York City\u2019s byzantine property valuation system means that the new tax would come with substantial implementation challenges.<\/a><\/p>\n

The city is expected to save another $1 billion over two years from several changes, including the state\u2019s expected agreement to delay a class-size mandate in public schools (despite Mr. Mamdani\u2019s support for the mandate as a candidate); more school aid from the state; and the assumption by the state of a larger share of death benefits for families of police officers, firefighters and emergency medical workers.<\/p>\n

State officials said the city will gain another $361 million from \u201cother actions\u201d that they have yet to explain.<\/p>\n

The developments appeared to show that Ms. Hochul and Mr. Mamdani had gotten through a somewhat bumpy period and were<\/a> eager to highlight their constructive and mutually beneficial partnership. The city, as a creature of the state, needs Ms. Hochul\u2019s support on many matters. Ms. Hochul, who is facing re-election this year, needs Mr. Mamdani\u2019s help in turning out Democratic voters in New York City.<\/p>\n

\u201cFor years, the relationship between City Hall and Albany has been defined by dysfunction and infighting,\u201d Mr. Mamdani said in a statement. \u201cGovernor Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve.\u201d<\/p>\n

But a fiscal watchdog, the Citizens Budget Commission, warned against the mayor\u2019s proposal.<\/p>\n

\u201cThe pension gimmick balances this budget on the backs of future New Yorkers \u2014 making residents in the mid-2030s pay for closing the fiscal year 2027 budget gap,\u201d the organization said in a statement.<\/p>\n

Mamdani fixes a political misstep, but backtracks on two campaign promises<\/p>\n

Mr. Mamdani ended his threat to raise property taxes on New York City homeowners by nearly 10 percent if the state failed to raise taxes on wealthy individuals and big corporations.<\/p>\n

The tax increase would have brought in almost $15 billion over four years, but ran into pushback from the moment Mr. Mamdani raised the idea. It sparked outrage among politicians representing Black homeowners, including some City Council members who would have had to approve the measure. From the beginning, the Council speaker, Julie Menin, said it was a nonstarter, and Mr. Mamdani began backing away from the threat nearly as soon as he made it<\/a>.<\/p>\n

This budget also highlights the extent to which Mr. Mamdani has had to backtrack on several campaign promises, as he has transitioned from an insurgent democratic socialist candidate to mayor of New York City.<\/p>\n

Though he promised on the campaign trail to drop City Hall\u2019s opposition to the expansion of a rental voucher for poor New Yorkers, the cost of the program prompted him to reverse that stance.<\/p>\n

As a candidate, he also expressed support for the state\u2019s requirement that New York City reduce the number of students in classrooms. As mayor, he now backs the state\u2019s intention to delay implementation of that mandate.<\/p>\n

Asked about his shifting position on the rental voucher program<\/a>, which the mayor is negotiating with the City Council, Mr. Mamdani called the service an \u201cinvaluable tool to help homeless New Yorkers who are getting out of shelter.\u201d<\/p>\n

He and his budget director, Sherif Soliman, insisted they are not cutting the program, but did not address in detail their decision not to expand it.<\/p>\n

After cutting funding for libraries, Mamdani restores it<\/p>\n

It was a modest cut in the context of the city library systems\u2019 budgets, but when Mr. Mamdani slashed $29 million from them, uproar ensued. In part, that is because the move was so at odds with Mr. Mamdani\u2019s democratic socialist political brand and evoked the library budget battles of his predecessor, Eric Adams.<\/p>\n

Those cuts have since vanished.<\/p>\n

Even so, the mayor has yet to live up to his campaign trail promise<\/a> to devote .5 percent of the city\u2019s budget to libraries.<\/p>\n

\u201cPreserving these crucial funds makes it possible for the city\u2019s public libraries to maintain the vital services and programs New Yorkers want and deserve,\u201d said the Brooklyn Public Library president, Linda Johnson; the New York Public Library president, Anthony Marx, and the Queens Public Library President, Dennis Walcott, in a joint statement.<\/p>\n

Mamdani\u2019s budget relies on a politically risky pension-funding gambit<\/p>\n

To balance this year\u2019s budget, Mr. Mamdani is proposing to delay payments<\/a> into New York City\u2019s pension funds.<\/p>\n

The city has five pension funds representing teachers, police officers, firefighters and other unionized municipal workers. The returns, which are invested, total about $300 billion.<\/p>\n

The mayor\u2019s plan, which would save $2.3 billion through the end of the upcoming fiscal year, would involve restructuring the city\u2019s contributions to the funds following an overhaul instituted in 2013 by Bill de Blasio, then the mayor of New York City, and Andrew M. Cuomo, then the governor. At that time, the mayor changed the city\u2019s pension payment obligations following a drop in the assumed rate of return, to 7 percent from 8 percent.<\/p>\n

City and state leaders agreed to stretch out payments for future bills through 2032.<\/p>\n

Police officers\u2019 pensions would be unaffected by the proposed change, as their union, the Police Benevolent Association, is opposed to the plan.<\/p>\n

John Nuthall, a spokesman for the P.B.A., said that neither the P.B.A. nor the fund that administers police pensions have agreed to the amortization. Representatives for the Uniformed Firefighters Association and District Council 37 had no immediate comment.<\/p>\n

Michael Mulgrew, president of the United Federation of Teachers, said pension board trustees would review the proposal.<\/p>\n

The city comptroller, Mark Levine, a Democrat, said there was a logic to the mayor\u2019s proposal on pensions. \u201cOtherwise we\u2019d hit a big cliff in 2032,\u201d he said.<\/p>\n

\u201cThis really is once-in-a-generation windfall,\u201d Mr. Levine added. \u201cI\u2019d want to use it to bolster our reserves, ideally, or prepare some way for the long term \u2014 not just cover expenses for today.\u201d<\/p>\n

Mamdani\u2019s budget cuts into reserve fund<\/p>\n

In Mr. Mamdani\u2019s first budget proposal<\/a> in February, he drained several of the city\u2019s reserve funds, which are meant to provide a cushion during economic turmoil. This version replenishes some of them, but leaves one with only the legally required minimum of $100 million \u2014 its lowest level since the pandemic.<\/p>\n

The partial reinstatement of reserves seems designed to win favor with the bond ratings agencies, who have for weeks suggested they might downgrade the city\u2019s credit ratings, if the mayor was to tap into the reserves.<\/p>\n

Any such downgrade would have made it more expensive for New York City to borrow.<\/p>\n

Ana Champeny, the Citizen Budget Commission\u2019s vice president for research, noted that the $100 million minimum was established in 1975. \u201cThere\u2019s no way that is enough money in 2027,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"Three months after Zohran Mamdani claimed New York City was facing a budgetary crisis of generational proportions, the…\n","protected":false},"author":2,"featured_media":27846,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[13421,8,14550,14551,10725,2097,9,17004,14547,7,13402],"class_list":{"0":"post-27845","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-stories","8":"tag-budgets-and-budgeting","9":"tag-headlines","10":"tag-hochul","11":"tag-kathleen-c","12":"tag-mamdani","13":"tag-new-york-city","14":"tag-news","15":"tag-pensions-and-retirement-plans","16":"tag-property-taxes","17":"tag-top-stories","18":"tag-zohran"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@news\/116563740160717818","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/27845","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/comments?post=27845"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/27845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media\/27846"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media?parent=27845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/categories?post=27845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/tags?post=27845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}