Two weeks after Zohran Mamdani took office as mayor of New York City with an agenda as sweeping as it was expensive, the city’s new comptroller offered a sobering warning.
New York City is facing a “remarkable” budget gap of a kind not seen in many years, the comptroller, Mark Levine, said on Friday.
The gap amounts to $12.6 billion in this fiscal year and next, which will present a major challenge for Mr. Mamdani. The forecast reflects what Mr. Levine described as a conservative estimate of expenses, one that does not include a further expansion of a housing subsidy now tied up in court, new labor contracts or ramifications from a potential bursting of the “A.I. bubble,” as he put it.
It also does not account for unknown but not entirely unforeseen actions from President Trump, who has repeatedly threatened to withhold federal funds from New York City and recently called for defunding so-called sanctuary cities like New York.
The timing is less than ideal for Mr. Mamdani, who won the mayoralty vowing vast expansions of government programs. He has promised to establish universal day care, with an estimated cost of $6 billion a year, and free bus service, with an estimated cost of about $1 billion a year. He has also vowed to help the private sector build 200,000 units of affordable housing with union labor, for which he wants to borrow an additional $70 billion over 10 years.
Mr. Levine did not call for budget cuts, but his presentation suggested that without robust economic growth beyond current forecasts they might be necessary.
Mr. Mamdani said on Friday that there was another option: raising taxes. He blamed the city’s pending budget gaps on “deep fiscal mismanagement” by his predecessor, Eric Adams, and on what he said was former Gov. Andrew M. Cuomo’s “decade-long exploitation of our city, and the resulting imbalance between how much New Yorkers give to the state, and how much we receive in return.”
A spokesman for Mr. Cuomo had no immediate comment.
The mayor said he was not surprised at Mr. Levine’s projections. “As I said on Tuesday, we believe raising taxes on the wealthiest New Yorkers and corporations will be necessary,” he said.
More precise details of a potential tax increase may come soon: Mr. Mamdani is required to release his budget proposal in February, kicking off a monthslong negotiation with the City Council.
Mr. Levine said the city faced an immediate midyear budget gap of $2.2 billion. The gap for the next fiscal year, which starts in July, is $10.4 billion, he said.
“A midyear gap of the scale we face right now is actually extremely unusual,” Mr. Levine said. “In fact, normally, at this time of year, we are facing budget surpluses that are driven by better-than-expected tax receipts.”
In fact, Mr. Levine said, the city has had healthy increases in tax revenues in recent years, including a 7 percent bump this fiscal year. Corporate profits were strong, he said, as was wage growth. The Wall Street bonuses that will be paid out early this year are expected to be a record high, just shy of $50 billion.
Like Mamdani, Mr. Levine placed the blame for the shortfalls not on the current economy, which has slowed over the past year, but on the Adams administration, accusing it of poor budgeting practices. The administration, he said, relied on the “excessive under-budgeting of expenses that we know that we are going to incur.”
“This has been happening for a while in New York City, unfortunately for years, but it has gotten out of hand of late,” he said.
A spokesman for Mr. Adams stoutly defended the former mayor’s economic stewardship.
“Eric Adams dealt with one of the toughest economic crises in the history of New York City, from Covid, in which the economy was crippled, and brought it back to one of the healthiest, one of the best economies that New York City has seen in years,” said Todd Shapiro, a spokesman for Mr. Adams. “Anyone that doesn’t believe that, go to the restaurants and Broadway shows, which are packed today and doing some of the best business they’ve ever done.”
Mr. Levine pointed to large expenses like overtime in the municipal work force, special education costs and, in particular, the housing voucher program known as CityFHEPS, which subsidizes rent for low-income New Yorkers and has ballooned in costs.
In December, the Adams administration said that 32,000 New Yorkers had acquired housing — or were able to retain housing — in 2025 thanks to the program.
Mr. Levine said that while he supported the program, it had been growing at a pace of 4 percent a month and could cost billions more in the coming years.
“At a growth rate of 4 percent a month, this means a doubling every year and a half,” he said.
That growth does not account for the further expansion of the program that the Adams administration has contested in court and warned would add unsustainable expenses to the city’s budget. If implemented, the program could cost as much as $20 billion over its first five years, Mr. Levine said.
During his campaign, Mr. Mamdani said he would drop the litigation. His spokeswoman declined to say if he still held that position.
Mr. Levine also shared concerns about the city’s job sector. A large majority of new jobs have been concentrated in the low-paying field of home health care, a trend that is expected to continue in the coming years.
Last year through November, private companies added about 18,500 positions, the lowest positive job growth in the city in at least 35 years. Some large white-collar industries, including finance, have shed jobs.
While companies have not had widespread layoffs, economists have said that firms appear to be leaving positions unfilled when people leave. The city’s Independent Budget Office estimates an increase of 54,000 jobs this year.
Dana Rubinstein covers New York City politics and government for The Times.
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