(The Center Square) — New York City’s budgetary woes are worse than projected by Mayor Zohran Mamdani’s administration, according to a report by the city’s fiscal watchdog, which calls for reining in spending to reduce a projected $7.3 billion shortfall over the next two years.
The analysis by City Comptroller Mark Levine, released Wednesday, found the Big Apple is spending more money than it’s taking in and said the estimated revenue gap over the next two years is $2 billion more than projected in Mayor Zohran Mamdani’s inaugural budget.
“What the Mayor’s Preliminary Budget and February Financial Plan also lays bare is the stark reality that the City is spending far more than it takes in, a structural imbalance between operating expenditures and revenues that this Office has documented and projected,” Levine wrote in the report.
Levine, who took over the office in January, largely attributed the city’s financial difficulties to sluggish economic growth and poor fiscal mismanagement under former Mayor Eric Adams and credited Mamdani’s budget writers for “a more transparent and accurate accounting” of expenditures than his predecessor.
But he also faulted Mamdani for “optimistic projections” of incoming revenues and yet-to-be-approved state aid for the next two years. The mayor’s Office of Management and Budget has projected a $5.4 billion budget gap over two years, down from a previous estimate of about $12.5 billion.
Mamdani unveiled his $127 billion preliminary budget proposal last month. He has called on state lawmakers to increase income taxes on New York City’s wealthy and corporations, threatening to increase property taxes by 9.5% if they don’t approve the plan.
But Levine said even if Mamdani raises property taxes, taps into the city’s reserves and gets a bailout from state lawmakers this year, his preliminary budget proposal still comes up short.
He cautioned against raiding the city’s reserves or increasing property taxes to reduce the shortfall.
“Raising the city’s already deeply inequitable property tax and drawing down long-term reserves to close budget gaps, are troublesome actions that would bring harm to the city’s most vulnerable residents and the overall fiscal health of the city, respectively,” he wrote in the report.
Levine said the city needs to make an estimated $6 billion in cuts over the next two years to balance the budget. He said New York City’s expanding housing voucher program and the Education Department’s $42 billion budget are two areas that the Mamdani administration needs to look at for cuts and spending.
