New York City's projected budget gap dropped from $12 billion to $7 billion in under two weeks — and Mayor Zohran Mamdani still showed up to the state legislature on Wednesday to push for a tax hike on millionaires.
During more than five hours of testimony before the New York State Legislature — the annual ritual known as "Tin Cup Day" — Budget Director Sherif Soliman divulged that current-year revenue had been underestimated by $2.4 billion and that next year's revenue would come in $4.8 billion higher than previously released. That's $7.2 billion in newly identified revenue. Only $3 billion of it was applied to closing the budget gap.
The remaining $4.2 billion? Unaccounted for. City Hall did not respond to questions about how the math added up.
According to the New York Post, less than two weeks before Wednesday's testimony, Mamdani held a press conference declaring a combined $12 billion budget gap for the current and next fiscal year. The number was staggering — tailor-made to justify the democratic socialist mayor's push for a 2% income tax increase on New Yorkers earning $1 million or more.
The problem is that city insiders and even Governor Kathy Hochul apparently knew additional revenue was coming. The books hadn't been fully calculated at the time of Mamdani's press conference. The $12 billion figure was announced anyway.
Mamdani offered this explanation under questioning:
"What we have seen in the time since that press conference is not only the incorporation of the increased economic forecast, as well as Wall Street bonuses, but also an aggressive savings plan, as well as the use of your reserves."
Translation: the administration knew the number would shrink, announced the bigger one first, and hoped the shock value would grease the wheels for a tax increase. The savings plan, the reserves, the Wall Street bonus revenue — none of this materialized overnight. These were known variables.
The reaction from city politicos was immediate and blunt. One unnamed insider captured the consensus:
"I can't believe they tried to pull this and expect anyone to believe the situation miraculously corrected itself in two weeks. Nobody's buying it."
Another offered a more weary assessment — the kind that stings precisely because it's delivered without anger:
"Unfortunately, for someone who came in promising to govern so differently, he's proving by month two in office to be playing the same games and using the same antics as his predecessors."
Month two. The shelf life of "new kind of politics" gets shorter every cycle.
A third insider cut to the core of the math problem:
"I just don't understand how this adds up to needing new taxes. Unless you spend billions more on pet projects."
That line deserves a second read. Soliman's own testimony showed $7.2 billion in newly identified revenue against a $7 billion revised gap. The current-year shortfall of $2.2 billion is more than covered by the $2.4 billion in underestimated revenue alone. The numbers don't argue for a tax increase — they argue against one. The only way Mamdani's proposal makes sense is if the administration plans to spend well beyond what the city currently needs.
This is the number that should dominate every conversation between now and Feb. 17, when Mamdani's balanced executive budget is due. Of the $7.2 billion in newly surfaced revenue, only $3 billion has been directed at closing the gap. Where does the other $4.2 billion go?
Mamdani said the administration would pull from reserves and a short-term savings account to help with the deficit. But if $7.2 billion in new revenue exceeds the $7 billion gap — why touch reserves at all? The math only works if the administration is building in room for new spending it hasn't disclosed yet.
Andrew Rein, president of the Citizens Budget Commission, a watchdog group, offered a measured response that nonetheless carried an edge:
"We need to see the numbers on Tuesday."
Yes. New York does.
Former Mayor Eric Adams, who was himself accused of manipulating revenue projections during his tenure, weighed in on social media with characteristic directness:
"Four weeks later and Mayor Mamdani suddenly 'finds' $5 billion. Give him another month, maybe the other $7 billion appears too."
Adams's pointing out budget gamesmanship is rich, given his own record. But the fact that a predecessor with his own credibility problems can land the critique this cleanly tells you how exposed Mamdani is.
The deeper issue isn't one mayor's bad math. It's the pattern that repeats itself every time a progressive takes the reins in a major American city. Step one: declare a crisis. Step two: demand new revenue — meaning taxes. Step three: when the crisis turns out to be overstated, keep the tax demand anyway. The crisis was never the point. The spending was always the point.
Governor Hochul, for her part, was reportedly left peeved at Mamdani's continued push for the income tax increase — though she offered no public comment. When even Albany Democrats are annoyed by your tax proposal, you've overplayed your hand.
The executive budget drops Feb. 17. It will be the first real accounting of where Mamdani intends to put the city's money. Every dollar of that unaccounted $4.2 billion will tell a story — about priorities, about honesty, and about whether the doomsday press conference was governance or theater.
Two weeks ago, New York City faced a $12 billion catastrophe that demanded immediate tax increases on its highest earners. Today, nearly half of that gap has vanished, and billions in new revenue sit unallocated. The mayor still wants the tax hike.
The crisis changed. The ask didn't. That tells you everything about what's driving it.
