Mamdani Asks State to Help Close $7 Billion Budget Deficit

Mayor Zohran Mamdani journeyed to Albany on Tuesay Feb. 10, to plead with lawmakers to send the city more money even as he said the projected two year budget deficit is now projected at $7 billion, down from the $12 billion he was projecting only weeks earlier. Because the city is not allowed to operate in the red so the gap must be closed in the new fiscal year that begins on July 1.

The Mayor’s annual pilgrimage to the capital is colloquially known as “Tin Cup Day,” referring to the money-catching vessel once favored by streetside beggars.

“We have made some meaningful progress towards shrinking the gap,” Mamdani said, “However, New York City is still placed on a ledge.”

And he wants help from the state in many forms, from a 2 percent tax on people earning over $1 million a year to more state money flowing our way. Gov. Kathy Hochul has proposed extending the tax on high earners, but not adding new taxes. She also had indicated she is not on board with an Adams plan to offer free buses, but conceded recently it is “not a permanent no.”

Mamdani, the former Assembly member from Astoria tried to strike a concilatory tone with his former colleagues. .

“For too long, the relationship between City Hall and the State has been defined by pettiness instead of partnership, power struggles instead of problem-solving.,” he said in remarks to a joint legislative session of the Assembly and the NYS Senate.

“I look forward to something different: a productive relationship with Governor Hochul, and a collaborative relationship with the legislature,” he said.

He continued to blast the Adams administration for the fiscal crisis the city now finds itself in and former Governor Andrew Cuomo, who defeated in the mayoral race for many of the past fiscal problems.

“Today, New York City is contending with the consequences of budgetary failures of the past. We are confronting a multi-billion-dollar budget deficit,” he said. “I’m talking about the ABC—the Adams Budget Crisis.

“For four years, former Mayor Adams engaged in gross fiscal mismanagement. Budget gaps are twice as large as what he said they would be, to the tune of billions of dollars.“

In a press conference after this address, reporters pressed him on whether he had cried wolf two weeks ago warning that the city was facing a two year $12 billion budget deficit.

Mamdani insisted he was relying on numbers from the past and current city comptroller as well as the state comptroller. He estimated $5 billion was shaved from the city budget deficit a combination of found savings, tapping onto reserve funds as well as new revenue coming from the Wall windfall of the income tax on Wall Street bonuses. Bonuses can be doled out in December and January and city often does not know how much will flow into its coffers.

In his talk to the legislature, Mamdani said that Adams seriously underestimated some costs. The cost for shelters was closer to $2 billion, not the $1.5 billion Adams set aside. Adams had said the migrant crisis cost the city close to $8 billion over more than two years, but costs are coming down as many of the emergency shelters close. But as Mamdani pointed out the cost among those that remain is still enormous.

“He budgeted $860 million for cash assistance, when the need was $1.6 billion” pointing out a $740 million shortfall. And he said Adams budgeted “$1.1 billion for rental assistance, when the need was $1.8 billion. And when combined with the systemic imbalance that has long characterized the fiscal relationship between the City and the State, we face an even more alarming budget situation.”

Mamdani was also called out for saying that New York was looking at “Great Recession” numbers in the upcoming fiscal year. “We compared it with the Great Recession only because it dwarfs the budget gaps that we saw during the Great Recession. And we also said that we will continue to keep New Yorkers abreast. This $7 billion figure is not just a reflection of updated forecasts. It’s also a reflection of the actions we’ve taken since announcing that first fiscal gap.”

Not addressed in his talks with the joint legislature is the problems caused by the state mandated cuts in classroom size. The city was given five years to bring its classroom sizes in line with the state mandated levels, decreasing classroom sizes by 20 percent each year until it reaches class sizes of 25 students or less by 2028 school year. Last year, the third in the new mandate, the city had matched the state requirement in 63 percent of its schools, slightly ahead of the state mandate to get to 60 percent.

This year the city was supposed to have 80 percent of its classroom conforming to the smaller requirements. Reaching that goal is estimated to cost $700 million a year to hire the additional teachers needed to meet the state mandated goal according to the city’s Independent Budget Office (IBO).