Massive city, state budgets grossly overspend and put NYC at risk, fiscal watchdog finds: ‘unaffordable and unprepared’

Both the city and state’s gargantuan budgets are “unaffordable and unprepared” in the wake of a potential recession and impending cuts from the feds, a fiscal watchdog group said Thursday — sounding the alarm on massive overspending.

The Citizen Budget Commission recommended nixing Gov. Kathy Hochul’s pet project, the $2 billion dollar “inflation reduction checks” approved as part of the state’s record-high $254 billion budget for next year.

The nonpartisan group also ripped mayoral frontrunner Zohran Mamdani’s signature plan to raise taxes on wealthy New Yorkers and businesses — an essential policy to pay for the socialist’s pie-in-the-sky platform of $10 billion in new spending.

“We should not raid rainy day funds and we should hold the line on taxes,” said Ana Champeny, vice president for research at the CBC.

Neither the state’s whopping spending plan nor the city’s giant, near $116 billion budget is putting away enough in reserves and are still short to cover their freebie-filled budgets, according to the CBC’s briefing.

The watchdog group warned that the mayor elected in November will have to close a $6 to $8 billion budget gap just 16 days into their term due to underbudgeting, overspending — and impending costs from the state’s class size law mandate.

Similarly, it said the state still has a structural budget gap of nearly $22 billion dollars, which could increase due to federal cuts.

“The real finding with this budget, at the state level is that it spends too much and prepares too little for the future,” said Patrick Oreki, the CBC’s state policy director.

Speaking to reporters following a cabinet meeting in Albany on Thursday, Hochul claimed she was already being fiscally prudent by reducing her free check handouts from $3 billion to $2 billion.

“I know we had some instinct that this would happen, something would happen,” Hochul said regarding the impact of the recently-passed federal “Big Beautiful Bill,” which will slash federal funds to states including New York.

“That’s why our one time $3 billion inflation rebate is now a $2 billion inflation rebate, cutting a program that I believe in, but also trying to be cognizant of the fact that we may need that money for future challenges,” she said.

Hochul, who is facing re-election next year, has publicly drawn a line in the sand when it comes to raising taxes — insisting that she won’t approve hikes when recently repeatedly questioned about Mamdani’s proposal.

But the governor’s budget director Blake Washington, during a press gaggle last week, didn’t rule out raising taxes to pad the spending plan.

“You know, you really just get down to the fundamental – do you want to raise taxes to build or just to cover up for the mistakes of others,” Washington said, referencing potential dwindling federal funds.

“Once we get more and more information under our belt, then we’ll have a better sense of what the best approach is,” he said.

Mamdani’s campaign did not respond to a request for comment.