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Mayor Mamdani tells Albany he still wants tax hike despite a smaller-than-expected deficit
By
Jimmy Vielkind
Published Feb 11, 2026
Modified Feb 11, 2026
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Ed Reed/Mayoral Photography Office
By
Jimmy Vielkind
Published Feb 11, 2026
Modified Feb 11, 2026
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New York City Mayor Zohran Mamdani said he’s facing a smaller fiscal hole than initially expected, but he still wants to raise income taxes on the city’s wealthy residents.
Mamdani appeared in Albany as part of the annual “Tin Cup Day” budget hearing, where local officials from across New York ask state legislators for various forms of fiscal and legislative relief. Lawmakers in turn grill the mayor about any manner of city issues.
The democratic socialist mayor is continuing to push for higher taxes despite resistance from — and an alliance with — Gov. Kathy Hochul. Just how hard Mamdani and his allies push the point is a significant factor in the state budget process, lawmakers said.
In his opening remarks, the mayor repeated that the city has a multibillion-dollar deficit that he blamed on his predecessor, Eric Adams. He again faulted former Gov. Andrew Cuomo – whom he defeated in last year’s campaign – for treating the city “as a resource to be drained.” The mayor and his aides said city taxpayers contribute more revenue to the state budget than the city receives back in funding.
Mamdani said his team has updated its estimates and now projects a $7 billion deficit in the current and coming fiscal years. That’s down from the $12 billion he projected last month after assessing the books at City Hall. The mayor said taxes on better-than-expected Wall Street bonuses and a more concerted effort at savings helped pare the deficit.
“By assuming an aggressive posture on savings without compromising city services, incorporating updated revenue and bonus estimates and using in-year reserves, we have lowered that $12 billion gap to $7 billion over two fiscal years,” Mamdani said.
The mayor later said that around $3 billion in the reduced gap came from higher-than-expected revenues, $1 billion was from savings and another $1 billion was from reserve funding.
The new estimate is more in line with the analyses of outside watchdogs like the CItizens Budget Commission. But with a large gap still looming, Mamdani said raising taxes would help address the imbalance.
”New York City is still placed on a ledge,” he said. “The most responsible way off is with dedicated recurring revenue that can provide the services New Yorkers deserve.”
Hochul, whose re-election bid Mamdani just endorsed, has said she doesn’t want to raise state income taxes. She has pledged to direct $1.7 billion in state funding to expand child care programming in the city.
The Democratic governor said earlier this week that her team is talking with Mamdani’s aides about the deficit before he presents a preliminary budget next week.
“It's important that we stabilize the city by getting the budget in a good place by his February 17th deadline to do his preliminary budget,” Hochul said.
Republicans have been attacking Hochul and Mamdani for not controlling government spending. Democrats who control the state Assembly and Senate have said they are open to raising taxes as part of the state budget, which is due March 31.
Mayor Mamdani testifies before Albany legislators about the city budget.
Jimmy Vielkind
Lawmakers’ reactions to Mamdani’s plan during his hourslong testimony were mixed.
State Sen. Monica Martinez, a Democrat from Suffolk County, expressed concerns that higher taxes would push rich New Yorkers to move.
“For you to say that someone may not leave when we are seeing some exodus — to me it’s a little disingenuous,” Martinez said to Mamdani.
Around 800,000 more people left New York City for other counties in the United States than came to the city between 2020 and 2024, according to the New York City Department of City Planning. The city’s population dropped over that period as a result.
Advocates of raising taxes say the number of millionaires in New York state has increased since lawmakers raised state taxes in 2021. And the profile of people leaving the city and state defies easy analysis. The Fiscal Policy Institute, a left-leaning think tank, reports New Yorkers with children are more likely to leave than those without, suggesting that the search for affordable housing is a major driver.
But critics of raising taxes note, the Empire State’s share of millionaires has decreased relative to other states.
State Sen. Andrew Lanza, a Republican who represents Staten Island, said the combined income tax rate on the wealthiest taxpayers in New York City is already the highest in the nation.
“ New York City has been unaffordable for a very long time and I am so happy to hear you talk about it and we need to address it,” he said. “It seems to me that the biggest culprit is government — taxes, fees. If we really want to immediately, quickly and effectively make New York City more affordable, we need to cut taxes and fees.”
Mamdani said the revenue he is seeking from a tax increase will not only plug a budget hole, but also allow him to fund initiatives that he says will make the city more affordable for working and middle-class people.
Mamdani previously served two terms in the state Assembly as part of a small group of democratic socialist lawmakers, who asked questions to help boost his case.
Assemblymember Claire Valdez, a democratic socialist from Queens, asked Mamdani if he would support legislation to allow New York City to set its own income tax rates. Currently, they are controlled by the state Legislature; Mamdani said he would like to see a change.
“We think this could raise up to $4 billion a year in new revenue to support critically needed infrastructure public services,” Valdez said. “Massachusetts recently passed a similar measure with great success.”
The new mayor was greeted like a rock star by his former colleagues. He posed for pictures and shook hands with lawmakers along a double-dais before sitting to testify. Many lawmakers joked that Mamdani was now allowed to speak for 10 uninterrupted minutes for his opening testimony, a luxurious length compared to the three minutes allotted to each rank-and-file legislator for questions.
State Sen. Steve Chan, a Republican from South Brooklyn, used his allotted time to grill Mamdani about local issues like the theft of airbags from parked cars. State Assemblymember Chantel Jackson, a Democrat from the Bronx, opened her remarks by chastising his sartorial choices during the recent snowstorm.
“ I need to start by asking the hard question and a number of Black and Latino moms are very disappointed in the example you're setting for our youth,” she said. “Will you commit to wearing a hat if the temperature drops below 40 degrees?”
“I’ll commit to a hat below freezing,” he said.
This story has been updated with additional reporting.
Tagged
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new york city
Jimmy Vielkind
Jimmy Vielkind covers how state government and politics affect people throughout New York. He has covered Albany since 2008, most recently as a reporter for The Wall Street Journal. Jimmy led a team of reporters that won a New York Press Club award for coverage of Andrew Cuomo’s downfall and was on a team that won a Gerald Loeb Award for coverage of Amazon’s HQ2 process. A native of the Capitol Region, Jimmy has two degrees in urban planning. His position is funded by a grant from the Corporation for Public Broadcasting. Reach Jimmy at [email protected].
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