Photo by Michael M. Santiago/Getty Images
New York City doesn’t enjoy Washington’s latitude when the bills come due: it cannot run an “official deficit”. By law and long-standing practice, the city is required to pass a balanced budget. That realisation dawned on Zohran Mamdani this week, as the Mayor warned that the city was facing a projected $5.4 billion revenue shortfall over the coming two fiscal years.
Mayor Mamdani cannot be blamed for this budget gap, but he can certainly make it worse.
While it may be tempting to pin the revenue collapse on vanishing tourists or fleeing millionaires, the city’s real problem is more prosaic: chronic underbudgeting of large, predictable expenses. Year after year, City Hall lowballs line items such as rental assistance, overtime, homeless shelters, public assistance, MTA support, and so-called “Carter” cases at the Department of Education — court-mandated special-education placements whose costs are unavoidable and reliably exceed the initial budget.
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Santiago Vidal Calvo is a Cities policy analyst at the Manhattan Institute.
Photo by Michael M. Santiago/Getty Images