NYC Mayor Zohran Mamdani to call for tax hike, citing $12B budget deficit from Adams administration
NEW YORK (WABC) — Mayor Zohran Mamdani will call for a tax hike on the richest residents in the five boroughs of New York City.
The mayor made the announcement during a budget announcement at City Hall on Wednesday.
“I will be blunt. New York City is facing a serious fiscal crisis,” Mamdani said.
Mamdani spoke directly to New Yorkers saying the city faces an enormous $12B budget deficit.
“We are speaking about a fiscal crisis at this scale greater than the great recession. And so there will not be one single thing that can answer that crisis,” Mamdani said.
The mayor said City Hall will scrutinize city agencies and their spending, but he insists it will take more than that.
“That also means raising taxes on the wealthiest New Yorkers and those profitable corporations, and it means recalibrating the relationship with the state,” Mamdani said.
Mamdani repeated his campaign mantra-raising taxes by 2 percent on millionaires and raising the combined corporate tax rate to just over 22 percent.
He says it’s one of the only ways to erase the $12 billion deficit he inherited from the Adams administration.
The mayor said he is less concerned about a business exodus with a tax hike and more concerned with the exodus of working people who are being driven out of the city because of high costs of living.
Mamdani said housing and child care costs are the top retention issues for employers.
Critics in the city’s business community insist that’s a mistake.
“Somebody looking to open a new business, start a new corporation, the next Amazon, is never going to make the choice to open in an environment where their 22% tax rate is. They’re going to choose Florida. They’re going to choose Texas. And that’s death by 1,000 paper cuts,” Steven Fulop with Partnership for New York City said.
Any tax increase would have to be approved by the state legislature and signed by Gov Kathy Hochul.
Gov. Kathy Hochul said it is not a “news flash” that Mamdani wants to raise taxes, and raising income taxes on residents remains a non-starter.
“I have said, and the news flash may be to you if you haven’t heard me, we are not raising taxes in the state of New York, we are not raising taxes for the sake of raising taxes, so he will continue to say what he needs to say,” Hochul said.
But Mamdani believes he can persuade the governor and lawmakers. Cuts to essential services, like the NYPD, he said, are off the table.
“Right now, we are not entertaining the idea of cuts. What we are talking about are savings and efficiencies that can be made but not getting into the place where New Yorkers have to question whether essential quality services will be delivered to come back,” Mamdani said.
Mamdani blamed the deficit on former mayor Eric Adams ‘negligent budgeting.’ But Adams claimed that he left $8 billion in reserves, suggesting that the new administration doesn’t know how to read a balance sheet.
A spokesperson for former Mayor Eric Adams said he “inherited a city facing nearly $10 billion in debt, compounded by the worst public-health and economic crisis in New York City history. COVID devastated the economy, and the City was later forced to absorb billions in migrant-related costs that should not have fallen solely on local taxpayers.”
“Despite these challenges, Mayor Adams led a real recovery through steady leadership and tough decisions,” the spokesperson said. “Blaming him for decades-old City-State funding inequities is inaccurate and disingenuous.”
Mamdani also blamed former Gov. Andrew Cuomo.
A spokesperson for Cuomo released a statement that said in part, “Andrew Cuomo inherited an $11 billion deficit when he first took office and managed to close it through hard work and fiscal discipline — words that just aren’t in Mamdani’s vocabulary.”
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