Mayor Mamdani put out another video today to celebrate the fact that he has balanced the budget. At first glance this is somewhat impressive given that as recently as a few months ago the expected shortfall was more than $12 billion. However, as with everything Mamdani puts out, it's less impressive when you look at the details. Before we get into that, here's his new video in which he's shouting the good news from the rooftops.
When we came into office, we uncovered a $12 billion budget deficit.
— Mayor Zohran Kwame Mamdani (@NYCMayor) May 12, 2026
Today, I’m proud to say we brought it down to zero.
We didn’t close the gap on the backs of working people.
We closed it while funding parks, libraries, safer streets and making historic investments in public… pic.twitter.com/TbNu6fhvjs
So how did he achieve this miracle? Well, he asked mom for money. A lof of this is coming from Gov. Hochul. State taxpayers will now be giving billions more to New York City.
Prior to the budget release, Governor Kathy Hochul and Mayor Mamdani announced new state support and actions to help New York City close its deficit. Governor Kathy Hochul, in partnership with the state legislature, has secured an additional $4 billion in gap-closing support.
Other changes are even more dubious. For instance, Mamdani put off a plan to shrink class sizes by hiring more teachers for a school system that really needs to be closing schools.
Usually, cash-strapped mayors look for efficiencies by reforming or ending underperforming programs or freezing new hires. But that would be “austerity.”
But Mamdani’s still accepting the false premise that we need more teachers, and he’s counting on state taxpayers to pick up part of the cost in coming years.
If anything, the DOE needs consolidation — as our colleague Danyela Souza Egorov argued this week — rather than funding failing schools with declining enrollment.
An estimated 134 city-run schools expect to have fewer than 150 students come autumn.
NYC is now spending $44,000 per student, one of the highest amounts of any big city, with mixed results. So the decision not to hire more teachers now is a good one but Mamdani hasn't actually solved the problem at this point, he's just kicked the can down the road.
Another pot of money comes from cutting funds to the pension plan. Again, this doesn't solve a problem it just kicks it down the road, making things worse for some future mayor.
Hochul is set to provide a state approval allowing Mamdani to extend the period over which public pension contributions are made, a change expected to save the city $1.6 billion in the upcoming fiscal year, according to a person with direct knowledge of the plan who was granted anonymity to discuss it ahead of its public release. Such a move would require support from four of the city’s five public pension funds, adding a potential obstacle to getting it across the finish line...
Andrew Rein, president of the fiscally hawkish Citizens Budget Commission, panned the pension contribution delay, arguing it saddles future generations with an unfair burden.
“We have to solve this budget gap today, and basically by stretching out pension payments we’re asking people in the mid-2030s to solve the 2027 budget gap, and that’s simply not fair,” Rein said. “We’re going to ask people who don’t even live here yet to help us balance the budget now.”
Mamdani is also counting on $500 million from his new pied-à-terre tax which hasn't even been approved yet. Plus he's promising another $850 million in savings by better controlling overtime and improved efficiency. Will those savings actually materialize? No one really knows, but Mamdani is putting it all out there like it's a done deal. He has solved the budge crisis.
Close observers noticed that he didn't have anything to say about the possibility of future shortfalls.
The mayor did not mention the deficits in future budgets in his presentation Tuesday of the $124.7 billion budget. Fiscal experts say they do not remember a time when a mayor didn’t acknowledge future year problems.
There's a reason he didn't mention the future. It doesn't look so good once you consider how many of his budget gimmicks this year are based on "one-shots."
For example, the governor has promised $1.6 billion for only the first two years of the rollout of Pre-K for three-year-olds and expansion of the slots for four-year-olds. There is no money for future years when the program is expected to be growing rapidly.
Other so-called one-shots — meaning revenue for only one year is being used to support spending that is expected to continue in the future — include something called budget accruals.
The administration says it’s found $1.2 billion in money the city had set aside to pay old expenses that it won’t need to use for that purpose. The money will be used in 2027 to balance the budget — but it won’t be available in future years.
One-shots amount to $2.8 billion, Comptroller Mark Levine estimates, one major factor in why the budget deficit for the 2028 fiscal year is still so large.
And those pension saving come at a high cost.
“Extending the amortization period for pension payments creates a debt that’s more expensive than muni bonds,” William Glasgall, an expert in public finances at the Volcker Alliance, said, referring to municipal bonds. Taxpayers will be footing the bill for today’s savings well into the 2030s.
So Mamdani did balance the budget but in ways that make it less likely he can do it again in coming years. Sooner or later he's going to run out of other people's money.
Editor’s Note: New York City is now facing the consequences of Mayor Zohran Mamdani’s socialist takeover.
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