Spendthrift staff at the helm for Zohran Mamdani’s first city budget

Zohran Mamdani won the mayoralty on a series of slogans, often without details on how he would achieve them.

Now that he’s taking the reins of the city, however, slogans won’t cut it.

He has to talk turkey.

By Feb. 1, the City Charter requires Mamdani to submit a preliminary budget — giving New Yorkers their first real sense of what their new mayor will prioritize.

Expect it to approach or exceed $120 billion as he spells out how he’ll fund existing programs, plus his freebie agenda.

He and the City Council must adopt a balanced budget by June 30.

Unlike Mayor Eric Adams, a relative budget hawk, Mamdani likely won’t face pushback from the far left Council during budget negotiations.

And with former de Blasio-era officials and nonprofit executives — plus Democratic Socialist operatives — staffing Mamdani’s transition team and key posts, it’s clear his administration has little interest in fiscal restraint.

Dean Fuleihan, an old hand in City Hall and Albany, will return to his former job as first deputy mayor.

He held that role under Mayor Bill de Blasio, too, after serving as budget director — where he oversaw years of city spending increases that grew at up to four times the rate of inflation.

Maria Torres-Springer, a veteran of the Bloomberg, de Blasio and Adams administrations, has the technocratic know-how to guide the fledgling mayor through the government’s sprawling bureaucracy.

But while Mamdani may be setting up for de Blasio 2.0, he faces one key difference: The city is in a much more fragile economic position today.

De Blasio took office after Mayor Mike Bloomberg spent 12 years modernizing the city bureaucracy, growing the local economy and rezoning swaths of land along the East River to accommodate an influx of higher-paid workers.

That strong fiscal foundation gave de Blasio a smooth first term, freeing him to focus on his signature universal pre-K program. 

Mamdani is wading into choppier economic waters.

For one thing, President Donald Trump has pledged to provide only “the very minimum as required” in federal funding.

About $7.4 billion, or 6.4%, of the city budget comes from Washington.

Then there’s the local labor market, which has slowed in recent months: The city’s unemployment rate is 4.9%, higher than the nation’s 4.3%.

The biggest employment gains are in home health assistance and personal care jobs —nominally private-sector positions that ultimately depend on unsustainable state Medicaid spending.

Meanwhile, the city’s tax base depends heavily on big earners.

In 2021, the top 1% of personal income tax filers paid 48% of the city’s collections — a sharp increase from their 40% share in 2019.

The top 10% accounted for over 70% of the city’s intake, while the bottom 50% paid in less than 5%.

Contra Mamdani’s campaign rhetoric, New York already taxes the rich.

The most effective way to grow the city’s budget, therefore, is to bring in top-paying firms in finance, tech and professional services.

That’s how New York blossomed under Mayors Rudy Giuliani and Michael Bloomberg.

Mamdani’s zero-sum economic thinking threatens his ability to achieve his agenda.

Instead of attracting entrepreneurs, big firms and talented workers, he wants to raise taxes on high earners and corporations, making the city less appealing to employers and newcomers.

For all the hoopla around the opening of J.P. Morgan’s dazzling new 10,000-person headquarters, the finance giant employs more workers in Texas than in New York.

As the Manhattan Institute’s Nicole Gelinas points out, Mamdani’s transition team lacks any member who’s notably pro-business or pro-police, and the addition of Lina Khan — President Joe Biden’s Federal Trade Commission chair and an enemy of big tech — won’t inspire confidence among business leaders.

The bottom line: Raising taxes on the wealthy without improving the city’s public services, ease of doing business, and public safety will make New York suffer in comparison to other cities.

Saving $2.90 on a bus ride isn’t exactly the height of urban policy innovation.

Though Mamdani is borrowing heavily from de Blasio’s former team, he’d do well to avoid his predecessor’s approach to the public workforce.

During his eight years in office, de Blasio expanded city employment by roughly 35,000 positions — well over a tenth — without any meaningful productivity improvements.

In his first budget, Mayor Mamdani will discover that showering benefits on his friends in the public-sector unions and the nonprofit sector will leave less money to fulfill his campaign promises.

And for all the talk of Mamdani as the new face of the Democratic Party, Gotham on his watch might just revert to business as usual.

John Ketcham is director of cities and a legal policy fellow at the Manhattan Institute. All views expressed are those of the author and not the Manhattan Institute.