Former Deputy Mayor Randy Mastro expressed concerns on Sunday regarding Mayor Zoran Mamdani’s budget strategies, suggesting he’s made “common mistakes” that have already raised eyebrows at a leading bond rating agency.
Last week, both Moody’s and S&P Global Ratings voiced significant worries about Mamdani’s plan to tap into the city’s emergency reserve fund to balance the budget.
A downgrade in the city’s credit rating could push up interest rates for New York to issue bonds or fund capital projects, Mastro noted.
“This is self-inflicted by the new administration,” Mastro said, pointing out that “we’re not in a fiscal crisis.” He added that using reserves or hinting at tax increases wasn’t necessary.
During his appearance on 77WABC radio’s “The Cats Roundtable,” Mastro remarked, “Obviously, the mayor is learning on the job.” Some of the errors, he pointed out, are quite basic.
Mastro criticized Mamdani’s inclination to raise taxes instead of managing spending, indicating that this approach seemed misguided.
“He’s created a panic around the city’s budget,” Mastro told host John Catsimatidis.
He emphasized that the city isn’t facing a budget crisis, despite Mamdani’s plans to increase spending between $11 billion and $12 billion and raise taxes to support it.
Mamdani is advocating for tax hikes to address what he claims is a $5.4 billion shortfall in the $127 billion fiscal plan set to start on July 1.
His suggestions, introduced last week, include:
- Increasing the city corporation tax from 9% to 10.8% for financial companies and from 8.85% to 10.62% for non-financial ones, potentially generating $1.5 billion.
- Raising the unincorporated business tax for businesses with incomes over $5 million from 4% to 4.4%, which could yield $250 million.
- Introducing a property tax on homes valued at $5 million or more, estimated to bring in $725 million.
- Implementing a tax increase on home sales over $1 million, which could provide an additional $161 million.
- Taxing capital gains over $500,000 a year, along with state surcharges, envisioned to raise $12 billion.
- Removing the sales tax exemption for precious metal bullion and coins over $1,000, benefiting the city by about $300 million.
Mamdani plans to push for a 9.5% rise in property taxes unless the state legislature approves new tax measures targeting wealth. Most tax proposals must be passed by the Albany City Council, except for property tax rates, which are determined by the Mayor and City Council.
“They’re trying to force us to impose tax increases on New Yorkers, corporate taxes, and property taxes for the wealthiest. We shouldn’t be raising taxes,” Mastro stated, arguing that such measures could harm the local economy.
He pointed out that affluent individuals often leave cities or states to avoid tax hikes.
“As mayor, tough choices must be made. You can’t fund every program; you’ve got to stay within your budget,” Mastro explained.
He cautioned that depleting reserves without a financial crisis is short-sighted.
No immediate response has been issued from city hall.
