A recent report from the Fiscal Watchdog Group proclaimed that both urban and state budgets are “uncontrollable and unprepared,” especially with a potential recession on the horizon and upcoming federal cuts.
The Citizens’ Budget Committee has suggested eliminating Governor Kathy Hochul’s $2 billion “Inflation Reduction Check,” which is set to be part of next year’s record-setting $254 billion budget.
Additionally, the nonpartisan committee criticized the tax plan proposed by mayoral frontrunner Zoran Mamdani, who plans to impose higher taxes on affluent New Yorkers and businesses.
“We shouldn’t rely on funds designed for emergencies; we need to maintain a reasonable tax structure,” remarked Ana Champenny, the CBC’s vice president of research.
The committee raised concerns that the state’s ambitious spending plans and the city’s expenditures are draining reserves prematurely and may not adequately cover the budget filled with giveaways. A detailed briefing from the CBC can be found here.
The watchdog group warned that the newly elected mayor would face a budget gap just 16 days into his term, primarily caused by excessive spending and obligations from state mandates.
On a related note, the state is reportedly contending with a structural budget deficit nearing $22 billion, which could worsen due to reductions in federal funding.
“The stark reality in this budget is that it overspends and is ill-prepared for future challenges,” stated Patrick Oleki, CBC’s state policy director.
During a cabinet meeting in Albany, Hochul defended her fiscal decisions, emphasizing that she cut back the proposed free checks from $3 billion to $2 billion.
“There’s an instinct to offer financial relief,” Hochul commented, mentioning the recently enacted federal “big beautiful bill.”
“That’s why we’re scaling down our rebate, which I believe can serve future needs,” she added.
Facing reelection soon, Hochul has taken a firm stance against increasing taxes, consistently rejecting inquiries about Mamdani’s proposals.
Yet, the governor’s budget director, Blake Washington, did not rule out the possibility of tax hikes to support spending priorities last week.
“It really comes down to the fundamentals. Are we raising taxes for infrastructure, or just covering mistakes made by others?” Washington said, referring to potential declines in federal aid.
“As more information comes in, we’ll be clearer on the best path forward,” he suggested.
Hochul’s spokesperson, Kristin Devoe, defended the budget plan, stating that “we will focus on making New York safer and more affordable,” and noted that the budget allows the governor to make necessary mid-term adjustments.
Mamdani’s campaign did not provide comments when approached.
