Comptroller Mark Levine will offer a sobering assessment of New York City's fiscal health on Wednesday, warning the Mamdani administration’s preliminary spending plan takes an overly optimistic view of projected revenues and proposes risky paths for closing a looming budget gap.
“New York City is spending more money than it takes in,” Levine said, previewing his planned testimony at the City Council’s preliminary budget hearing.
Mayor Zohran Mamdani released his $127 billion preliminary budget proposal last month. He has urged state lawmakers to increase income taxes on the wealthiest New Yorkers and corporations, saying if that effort fails, the city would have to raise property taxes by 9.5%.
But both options face tough odds. In Albany, Gov. Kathy Hochul has steadfastly opposed an income tax hike, arguing such a move would drive wealthy people out of the state.
In the City Council, Speaker Julie Menin has called the property tax proposal a “nonstarter.” Many other councilmembers have also criticized the measure.
Levine’s office said the city faces a $6.5 billion gap next year, assuming neither option is adopted. That gap is worse than the Mamdani administration’s projected gap of $5.4 billion.
“We have a structural imbalance that this reveals right in a year where the economy is growing, where revenue is growing, income tax, property tax, all growing,” Levine warned.
He also cautioned that Mamdani’s proposed property tax increase approaches the ceiling of what’s permissible under the state constitution. Levine said raising property taxes might be an option best saved for a graver economic moment.
“We're once again leaving ourselves without a tool we might want to use if there's a true crisis ahead,” the comptroller said.
Levine cited the city’s rental assistance program, which he said was expected to cost nearly $2.6 billion next year, as an example of how the city’s expenses were growing faster than its revenues. That’s more than the Department of Housing Preservation and Development’s entire expense budget, which is currently just over $2 billion.
Levine’s analysis also warned of looming fiscal threats, including geopolitical instability and the possibility of an artificial intelligence bubble in the stock market that could cause major job losses if it bursts.
The comptroller did praise Mamdani for a budget Levine said more accurately reflects the true cost of key programs. He said former Mayor Eric Adams' administration underestimated expenses and “papered over” structural problems. Mayors have long been criticized for playing games with preliminary budgets so they can later cast themselves as heroes saving the city from fiscal disaster.
