Mayor Zohran Mamdani told New Yorkers in late January that the city is staring down a fiscal deficit of at least $12 billion, and that closing it will require the state to raise taxes on the wealthy. Standing in City Hall’s Blue Room flanked by First Deputy Mayor Dean Fuleihan and budget director Sherif Soliman, Mamdani said the city faces a budget gap of $2.2 billion this year that would balloon to $10.4 billion the following year, the largest shortfall the city has confronted since the Great Recession, according to an account of the briefing published by Hell Gate.
Mamdani placed the blame squarely on his predecessors. “There is a massive fiscal deficit in our city’s budget to the tune of at least $12 billion,” he said, according to Hell Gate. “We did not arrive at this place by accident. This crisis has a name and a chief architect. In the words of the Jackson 5, it’s as easy as A-B-C. This is the Adams Budget Crisis.” The mayor also blamed former Governor Andrew Cuomo, who left office in 2021, for what he characterized as years of shortchanging the city. Mamdani said he would pursue “efficiencies” in city government to chip away at the gap, but that bridging it would ultimately demand far more support from Albany, specifically state legislation to raise taxes on high earners.
In an appearance on Bloomberg TV that same week, Mamdani was pressed on how the city would reconcile that deficit with Wall Street’s report of unusually strong bonuses. The mayor called the bonus news “very encouraging” and said it “frankly, will be helpful in dealing with a $12 billion fiscal deficit,” but cautioned that the sheer scale of the shortfall meant he could not point to Wall Street and declare the problem solved. The Bloomberg interview opened on the deadly cold snap then gripping the city, which Mamdani said might become the coldest period in New York City’s recorded history. He said the city had declared a Code Blue, rerouting 311 calls to 911, and that city workers had connected more than 600 homeless New Yorkers to shelters, safe havens and warming centers, while outreach teams worked around the clock to bring people inside.
The campaign tax proposals at the center of Mamdani’s pitch are substantial. The fiscally conservative Empire Center, in an analysis by Bill Hammond titled “Seven Reasons Not To Raise Taxes in New York,” said Mamdani’s platform included two major tax hikes: a 52 percent increase in the city’s income tax rate on the top 1 percent of earners and a 59 percent increase in the state corporate tax rate on roughly 1,000 of the largest companies. The Empire Center said Mamdani estimated those levies would raise $9 billion a year, an 11 percent increase in city revenues. The group noted that Democratic majorities in the state Assembly and Senate have backed similar proposals in recent years and might advance them again during negotiations over the 2026-27 state budget, which begins April 1.
On February 11, Mamdani took that argument directly to Albany, testifying at the 2026 Joint Legislative Budget Hearing in the Hamilton Hearing Room of the Legislative Office Building, according to a public schedule released by the mayor’s press office. In remarks prepared for delivery and distributed by his office, Mamdani struck a conciliatory tone toward the state leaders whose votes he needs. “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. The mayor, a former state assemblyman, thanked budget chairs Liz Krueger and Gary Pretlow, Speaker Carl Heastie and Majority Leader Andrea Stewart-Cousins, and said he looked forward to “a productive relationship with Governor Hochul, and a collaborative relationship with the legislature.”
At a media availability after the hearing, Mamdani said he was heartened by the day and by the previous six weeks of what he described as a new city-state dynamic that “places partnership before pettiness,” crediting that cooperation with already setting the city “on a course for universal childcare.” He thanked legislators for what he called thoughtful questions and reiterated his goal of a city where all 8.5 million residents “can afford to live a dignified life.”
Mamdani also faced skepticism about his deficit math. A reporter at the availability noted that budget watchers say the administration relied on November estimates that do not account for revenue that typically arrives in December and January, including Wall Street bonuses, and asked how New Yorkers could trust figures produced with what the questioner called tactics similar to those of Mayor Eric Adams and earlier mayors. The exchange underscored the central tension of Mamdani’s case: a $12 billion alarm that doubles as the justification for the tax increases he campaigned on.
Mamdani’s allies on the left moved to keep the pressure on Albany. State Senator Julia Salazar, who represents Bushwick and surrounding neighborhoods, said the February 11 budget hearing made clear that “the most viable path toward ensuring New Yorkers can live a dignified and affordable life is by taxing corporations and the ultra-wealthy their fair share.” In a statement, Salazar said, “it is time to require that billionaires, millionaires, and corporations contribute their fair share to society. They became this wealthy because of the labor of working-class New Yorkers, and it’s only right that they finally give back. Let’s tax the rich, close our budget gaps, fund our social programs, and ensure our communities have what they need and deserve.”
The New York City chapter of the Democratic Socialists of America, the organization that helped power Mamdani’s rise, pressed the same demand through a series of February statements, including one responding to Mamdani’s endorsement of Governor Kathy Hochul and another asserting that, in the group’s words, Hochul “won’t tax the rich unless we make her.” The group escalated in late March, announcing in a media advisory that U.S. Senator Bernie Sanders would headline a Sunday rally in the Bronx to tax the rich, joined by NYC-DSA, the health care union 1199SEIU, the New York State Nurses Association, the Professional Staff Congress-CUNY and elected officials.
The mayor’s tax agenda faces a steep climb in Albany, where the governor controls much of the outcome. The Empire Center said Hochul is rejecting tax hikes, consistent with her public statements, and Hammond’s analysis laid out seven arguments against raising New York’s tax burden, contending that state revenues have grown robustly in recent years. With the state budget deadline of April 1 looming when the mayor testified, the question of whether the legislature would move on the income and corporate tax increases Mamdani wants, over the governor’s objections, remained the decisive variable in how New York City closes a gap its new mayor pegs at $12 billion.
