Mayor Zohran Mamdani on Wednesday painted a dire picture of the city’s finances, placing the blame for a $12 billion budget gap over two years on former Mayor Eric Adams.
The mayor also repeated his call for the state legislature and Gov. Kathy Hochul to raise taxes on the wealthiest New Yorkers and corporations and to provide the city with its fair share of the state budget.
While he promised transparency for New Yorkers, Mamdani was short on details when pressed for the ways he would fix the city’s budget woes.
“I will be blunt: New York City is facing a serious fiscal crisis,” he said during a press conference inside City Hall. “Former Mayor Eric Adams handed the next administration a poisoned chalice.”
Mamdani said Adams “under-budgeted services that New Yorkers rely on every single day – rental assistance, shelter and special education, while quietly leaving behind enormous gaps for the future.”
A spokesperson for Adams, Todd Shapiro, said the former mayor “inherited a city facing nearly $10 billion in debt, compounded by the worst public-health and economic crisis in New York City history.”
“Blaming him for decades-old city-state funding inequities is inaccurate and disingenuous,” he said.
But many fiscal experts agree with Mamdani.
State Comptroller Thomas DiNapoli noted in a statement that his office had repeatedly found that the Adams administration had underestimated expenses for police overtime and housing vouchers, to name only two areas.
The Citizens Budget Commission said no previous administration had engaged in under-budgeting to the extent the Adams administration did.
”It’s been really hard to follow the budget in recent years, and it’s already a complicated document,” said Rahul Jain, the deputy state comptroller who follows the city’s finances. “This is a positive step.”
When the city closes the books on the current fiscal year on June 30, it is likely to have spent more than it received in revenue for the last four years. Adams was able to balance the budget by using surpluses accumulated in previous years to cover the gap.
The new city comptroller, Mark Levine, sounded the alarm earlier this month about the budget gap, saying the city will end this fiscal year in June with around a $2 billion deficit and a $10 billion deficit next fiscal year.
Mamdani will release his executive budget on Feb. 17, when he promised to share more information on whether he’d institute any budget cuts – which Adams did a few times as mayor – or any other ways he would fill the gap.
What is helpful about the mayor’s approach is that it will focus on the reasons some of the city’s programs, like rental assistance, are increasing at such a rapid pace, said Jain.
The mayor, who has been strongly supportive of city vouchers, said Wednesday the program needs to be reevaluated.
“When you are understating the costs, there is no focus on why they are rising and what the city can do about it,” he said.
Mayor Zohran Mamdani speaks at City Hall about addressing a budget shortfall, Jan. 28, 2026. Credit: Ed Reed/Mayoral Photography Offi
Progressive groups like the Fiscal Policy Institute and Our Time for Affordable New York, a lobbying group supporting Mamdani proposals, immediately rushed to support Mamdani’s calls for higher taxes on the wealthy and corporations.
They have been beating the drum for tax increases for months and intensified their efforts after Hochul rejected the idea of hikes in her budget.
But the Citizens Budget Commission said a tax hike would increase what are already the highest tax rates for high income earners and corporations in the country.
“Tax increases would risk the city’s competitiveness at a time of domestic outmigration, declining international immigration, and stagnant jobs numbers,” said Ana Champeny, the organization’s research director.
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