City faces bigger budget deficit, Comptroller says

This article was originally published on January 16, 5pm EST by THE CITY

Just two weeks after moving into his new office, City Comptroller Mark Levine is warning that Mayor Zohran Mamdani faces a budget gap totaling $12 billion. The new mayor must say in a budget plan from early February how he wants to close this gap.

The estimate, which was shared in an interview ahead of a report published Friday, is much higher than the gap projected in Mayor Eric Adams’ previous budget update and is also higher than other estimates from other budget monitors.

Levine believes the current budget will end this fiscal year with a $2 billion deficit in June. The gap in next year’s budget will be closer to $10 billion, his office noted. If Levine is right, that shortage is far greater than what the city has faced in recent years and Mamdani will be forced to make tough choices.

Additionally, Governor Kathy Hochul indicated in this week’s State of the State address that she will not propose tax increases in her budget. Mamdani’s top budget advisor, First Deputy Mayor Dean Fuleihansaid at a Citizens Budget Commission meeting in December that the government would only include revenue from new taxes if they were included in Hochul’s budget.

Friday’s announcement is also a sign that Levine plans to be an aggressive watchdog over the mayor’s budget and policies.

“I intend to be a very activist comptroller, including on the budget,” Levine told THE CITY last week. “It is needed more than ever because there is so much uncertainty in the economy and we need to take steps to close the budget gap.”

The comptroller is also laying the groundwork to fulfill his campaign promises to find up to $3 billion to build affordable housing, restart pension funds purchase of Israeli bondsand improving outdated government processes. Levin’s own onboarding, for example, was done entirely by filling out paper forms.

On affordable housing, he said his office has begun work on a program that will triple the $1 billion the pension funds have already invested in subsidized housing in the city. During the campaign, he talked about using the money to provide cheaper development loans for affordable projects.

He also plans to conduct an aggressive audit of the Housing Preservation and Development Agency, where paperwork can often hold up construction of affordable projects for 18 months.

And he said he remains committed to resuming purchases of Israeli bonds in pension fund portfolios, something that predecessor Brad Lander had abandoned.

“Israeli bonds have been part of the portfolio for decades,” he said.

He also noted that a report his office released this week found that what little job growth there was in the city last year was entirely in health care and social services — with most of that in low-wage health care jobs, which elaborated into a story last month.

“We need more homes and we need more jobs,” he said.

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