The Big Apple was in the red \u2014 even before the socialist takeover.<\/p>\n
New York City is facing a mammoth $12 billion budget deficit in the next two years, new City Comptroller Mark Levine warned Friday \u2014 grimly comparing the outlook to the 2008 financial crisis.<\/p>\n
Mayor Zohran Mamdani quickly used the dire forecast to push to his \u201ctax the rich\u201d dream, despite the comptroller\u2019s numbers showing that spending is the problem, not the city\u2019s revenue.<\/p>\n
City Comptroller Mark Levine warned Friday the Big Apple faces a combined $12 billion budget deficit. NYC Comptroller Mark Levine<\/p>\n
The city\u2019s mid-year budget gap for the 2026 fiscal year ending in June is an \u201cextremely unusual\u201d $2.2 billion, Levine said.<\/p>\n
The coming 2027 fiscal year faces an even-worse $10.4 billion shortfall, the comptroller said \u2014 even before the Democratic socialist mayor unveils his first spending plan.<\/p>\n
\u201cThis is far beyond what we saw last year and I believe in any year since the 2008 financial crisis,\u201d Levine said during a briefing in the city\u2019s Municipal Building.<\/p>\n
\u201cWe\u2019re not going to sugarcoat this. This is a challenging budget outlook to have a mid-year gap. Again, this is quite unusual to have a gap of the scale that we\u2019re projecting for next year,\u201d he said. <\/p>\n
\u201c[It\u2019s] something we haven\u2019t seen outside of an economic slowdown in New York City,\u201d Levine added. \u201cCertainly not in an environment where we have such strong tax receipts.\u201d<\/p>\n
Indeed, city tax revenues increased nearly 7% during the 2026 fiscal year, the financial oversight boss said.<\/p>\n
\u201cThis wasn\u2019t caused by a bad economy \u2014 it\u2019s the result of budgeting decisions from the previous administration that we must now deal with,\u201d Levine said.<\/p>\n
Mamdani is poised to deliver his first budget plan as mayor by February. His ambitious agenda ultimately promises $10 billion in freebies, from universal child care to free buses, largely relying on hypothetical state funding from higher taxes on the wealthy.<\/p>\n
But Gov. Kathy Hochul has repeatedly made clear she won\u2019t support Mamdani\u2019s push to tax the rich, even as she jumped onto his universal child care push during her \u201cState of the State\u201d <\/a>address Tuesday.<\/p>\n After the Hochul\u2019s agenda-setting speech, Mamdani publicly split with the governor over taxes<\/a>. <\/p>\n He did so again when faced with Levine\u2019s projections.<\/p>\n \u201cAs I said on Tuesday, we believe raising taxes on the wealthiest New Yorkers and corporations will be necessary,\u201d Hizzoner said in a statement Friday.<\/p>\n He blamed his predecessor, former Mayor Eric Adams<\/a>, for the combined $12 billion budget hole, accusing his administration of deep fiscal mismanagement.<\/p>\n Mamdani, a former Queens state Assemblyman, also trained his fire at his mayoral election rival Andrew Cuomo, arguing the former governor and Albany used the city as a statewide piggy bank.<\/p>\n \u201cWe have long said that what we are inheriting is not just an administration that exhibited incredible fiscal mismanagement, but also a decades-long effort from former Governor Cuomo to pilfer from city coffers at each and every turn,\u201d he said.<\/p>\n \u201cAnd what that has left this city with is, as described by the comptroller, not only a fiscal hole, but frankly, a relationship between city and state, where the city contributes 54.5% of the state\u2019s tax revenues, but only receives 40.5% in return.\u201d<\/p>\n Levine, the city\u2019s main financial watchdog and former Manhattan borough president, squarely blamed Adams, saying his administration relied on one-shot spending tricks and chronically underbudgeting expenses to paper over fiscal hitches.<\/p>\n Mayor Zohran Mamdani argued the shortfall shows the need to tax the rich. Angus Mordant for NY Post<\/p>\n Even though tax revenues have consistently grown year-over-year \u2014 hitting $81.4 billion in the 2025 fiscal year \u2014 expenditures swelled even more, Levine\u2019s analysis found.<\/p>\n The city has layered new programs on top of others without eliminating lower-priority or lower-impact spending for years, argued Andrew Rein, president of the Citizens Budget Commission.<\/p>\n \u201cThe result is spending growth twice the rate of inflation,\u201d he said in a statement. \u201cCity spending would be $14.5 billion lower today if it had tracked inflation.\u201d<\/p>\n \t\t\t\t\t\t\tStart your day with all you need to know\t\t\t\t\t\t<\/p>\n \n\t\t\t\t\t\t\tMorning Report delivers the latest news, videos, photos and more.\t\t\t\t\t\t<\/p>\n \t\t\t\t\t\tThanks for signing up!\n\t\t\t\t<\/p>\n Rein noted his group\u2019s projection of an $8 billion budget gap for the 2027 fiscal year is lower than Levine\u2019s, but contended the problem still won\u2019t disappear on its own. <\/p>\n He said Mamdani\u2019s first task should be to comb through city program and shrink those that don\u2019t deliver. The state should also repeal a costly class-size mandate for schools, he argued.<\/p>\n \u201cIt is important that New York deliver high-quality cost-effective services,\u201d he said. \u201cThat requires making smart but tough choices\u2014prioritizing what works and shrinking what doesn\u2019t\u2014before turning to the easier option of raising taxes.\u201d<\/p>\n Levine\u2019s analysis found the problem was made worse by Adams officials understating expenditures with each bite at the budgetary apple, according to the analysis.<\/p>\n Levine and Mamdani blamed former Mayor Eric Adams for the looming deficits. James Keivom<\/p>\n The underbudgeting in the 2026 fiscal year included $795 million for rental assistance, $727 million for city employees\u2019 overtime and $630 million for homeless shelters, according to the comptroller\u2019s office.<\/p>\n Altogether, $3.8 billion was simply not budgeted during the current fiscal year \u2014 and those amounts will increase drastically in the years to come, the analysis found.<\/p>\n Adams\u2019 spokesman Todd Shapiro argued the former mayor inherited billions of dollars in debt after the COVID pandemic. He noted the city also absorbed further billions during the migrant crisis.<\/p>\n \u201cDespite these unprecedented challenges, Mayor Adams led a historic comeback,\u201d Shapiro said. <\/p>\n \u201cBlaming Mayor Adams for long-standing structural budget gaps and fiscal pressures ignores the reality of what this administration took on and what it has delivered.\u201d<\/p>\n The comptroller\u2019s estimates didn\u2019t even include a multi-billion dollar spending commitment <\/a>from expanding the City Fighting Homelessness and Eviction Prevention Supplement rental assistance program, better known as CityFHEPS \u2014 an expense Adams fought to avoid.<\/p>\n