New York City Mayor Zoran Mamdani said Wednesday that the city’s wealthy must pay more in taxes to close the staggering $12 billion budget deficit left by his predecessor.
“This is bigger than what we actually saw here in New York City during the Great Recession,” Mamdani said of the budget hole in an interview with CNBC’s “Squawk Box” co-anchor Andrew Ross Sorkin at City Hall.
The Democratic Party, which took office on January 1 after campaigning on the promise of higher taxes on the wealthy, blamed the huge deficit on “serious fiscal mismanagement.”
He pointed to actions taken by former Mayor Eric Adams and former New York Gov. Andrew Cuomo, who lost the general election in November, for causing the budget gap.
Mamdani vowed that his administration would be honest with New Yorkers about budget issues that have been “hidden from people for far too long.”
City Comptroller Mark Levin said earlier this month that the new mayor is expected to face a total budget shortfall of $12.6 billion over the next two fiscal years.
The city’s budget for fiscal year 2026, which ends on June 30th, is approximately $116 billion, with an expected deficit of $2.2 billion, resulting in a difference of $10.4 billion in fiscal year 2027.
Mamdani said on Wednesday that the plan to address the budget deficit also includes budget savings.
He cited the example of the Adams administration launching a “basically unusable” artificial intelligence chatbot that reportedly cost about $600,000 to develop.
“I think the scale of this crisis is such that we have to pursue all of these things,” Mamdani said.
“We have to show that city government is serious not only about public goods, but also about public excellence and public efficiency. So we have to make sure that every dollar spent is spent in a way that actually adds value,” he said.
The 34-year-old former state lawmaker pledged during last year’s mayoral campaign to raise the city’s corporate tax rate to 11.5%, the same level as New Jersey.
He also promised to impose a flat 2% tax on New Yorkers making more than $1 million a year.
Mr. Mamdani’s sudden rise in profile following his stunning upset victory over Mr. Cuomo in the 2025 Democratic mayoral primary and his identification as a democratic socialist has upset some in the city’s business elite.
Many of these leaders warned that his redistributionist policies could hold back cities, the country’s financial capitals.
Asked by Mr. Sorkin on Wednesday about concerns that billionaires, other wealthy people and corporations would flee in the face of his policies, Mr. Mamdani pushed back.
“When we talk about the possibility of increasing taxes on the wealthy, we always talk about capital flight,” Mamdani said.
He noted that the number of wealthy people has increased since New York state increased taxes on wealthy people in 2021.
And Mamadoni stressed that his revenue plan is aimed at improving the quality of city services.
“We are now sitting in one of the coldest regions in New York City’s weather history,” the mayor said.
“One of the reasons the city started to bounce back was because we had a health department with thousands of people,” he said.
“That’s only possible if we actually invest in public services.”
