Campaign Promises Should Take a Back Seat to Reducing NYC’s Budget Gap
The Citizens Budget Commission (CBC), which serves as New York City’s fiscal watchdog, released several recommendations for the incoming mayor as he proposes his first preliminary budget just one month into term. Although Mayor-elect Zohran Mamdani’s priorities may be to progress on campaign promises, according to the CBC, he will “also have to close a $6 billion to $8 billion budget gaps and prepare for federal cuts.” According to CBC’s estimate, projections for fiscal year 2027 spending is understated by $4.5 billion, but “partly masked by chronic underbudgeting for known expenses.” Money saved from the surge in revenue generated by the financial services sector during the pandemic enabled the city to spend $2.3 billion more than it took in over the past three fiscal years. Spending growth by the city has well exceeded inflation over the past decade, excluding state and federal funding, it is $13.5 billion higher than it would be if the budget had grown at the rate of inflation since fiscal year 2017. Further creating fiscal instability is the $2 billion saved in the Rainy Day Fund, which if not increased and a recession were to occur, would fall significantly short of the $14 billion needed to cover two years of tax revenue decline. The CBC has provided nine “smart choice” recommendations to improve the city’s fiscal stability and preparedness while improving services.