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JOURNAL Since 1883
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FEBRUARY 5 - 11, 2026
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Mamdani warns of a city fiscal crisis Mayor Zohran Mamdani warned that New York City is facing a looming fiscal emergency he dubbed the “Adams Budget Crisis,” blaming years of underbudgeting and fiscal mismanagement under former Mayor Eric Adams for a projected $12 billion shortfall over the next two fiscal years. Speaking at a Jan. 29 City Hall news conference, Mamdani said the city’s finances were far worse than previously disclosed, with essential service s re p e at e d ly funded far below their actual costs. He said the gaps, concentrated in fiscal years 2026 and 2027, are larger than those faced durZohran MaMdanI ing the Great Recession. Mayor “I will be blunt: New York City is facing a serious fiscal crisis,” Mamdani said. “There is a massive fiscal deficit in our city’s budget to the tune of at least $12 billion. We did not arrive at this place by accident. This crisis has a name and a chief architect. This is the Adams Budget Crisis.” Mamdani accused the prior administration of systematically under-budgeting programs that New Yorkers rely on daily, including rental assistance, shelter operations and special education, while portraying future budgets as balanced. He said those choices left his administration with what he called a “poisoned chalice.” He said the Adams administration budgeted $860 million for cash assistance in fiscal year 2026, even though current projections show costs nearing $1.7 billion. Shelter costs were also significantly understated, with roughly $500 million in additional expenses unaccounted for, he said. “These are not differences in opinion between accountants,” Mamdani said. “They are measured to the tune of more than $7 billion beyond what he published.” Independent projections from City Comptroller Brad Lander, Budget Direc-
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will be blunt: New York City is facing a serious fiscal crisis.
Courtesy NYC Mayor’s Office
Mayor Zohran Mamdani said the there is a projected $12 billion shortfall over the next two fiscal years. tor Jacques Jiha and State Comptroller Thomas DiNapoli align with the mayor’s assessment, Mamdani said, showing that gaps were “dramatically and intentionally understated.” In some years, he said, the true shortfall is nearly double what the public was told. Mamdani also pointed to what he described as a long-standing imbalance between New York City and the state, saying the city has sent far more revenue to Albany than it has received in return. In fiscal year 2022, the city sent $68.8 billion in revenue to the state but received only $47.6 billion back. “That imbalance has hollowed out our city’s finances and left us with a chasm that can no longer be sustained,” Mamdani said. He blamed much of that disparity on policies during former Gov. Andrew Cuomo’s tenure, arguing that the state increasingly relied on city-generated revenue without proportionate reinvestment. From 2010 to 2022, Mamdani said,
the city generated nearly two-thirds of state revenue growth but received just 42 percent of increased state spending. Despite the bleak outlook, Mamdani pledged that his administration would balance the preliminary city budget for fiscal years 2026 and 2027 by the Feb. 17 deadline, as required by law. He said the burden of closing the gap would not fall on working New Yorkers. Instead, Mamdani renewed calls to raise taxes on the city’s wealthiest residents and most profitable corporations, while also pursuing what he described as savings and efficiencies across city gover nment. He drew a distinction between cutting waste and imposing austerity. “There is a difference between pursuing savings and efficiencies and pursuing austerity,” he said. “If a dollar cannot be defended, then it’s not a dollar that should be spent.” He added that his administration is reviewing every line of spending
and reassessing housing and assistance programs, including CityFHEPS rental vouchers, while seeking more time to negotiate a settlement in ongoing litigation over the program’s expansion. Mamdani acknowledged that resolving the crisis will require even as Gov. Kathy Hochul has expressed resistance to higher taxes. He said he plans to press state leaders for what he described as a fairer fiscal relationship. It was reported that Adams said he left $8 billion in reserves and implied that the new city administration is unfamiliar with a balance sheet. –Jeffrey Bessen