Mayor Mamdani Details “Adams Budget Crisis”

 

Adams’ staggering fiscal mismanagement left a $12 billion hole in NYC budget for the next two fiscal years 

TODAY, Mayor Zohran Mamdani outlined the “Adams Budget Crisis,” a fiscal emergency driven by years of staggering mismanagement under former Mayor Eric Adams that left New York City facing a $12 billion budget shortfall over fiscal years 2026 and 2027. 

 

Speaking at a press conference, Mamdani said the crisis stemmed from a pattern of underbudgeting essential services that New Yorkers rely on every day including rental assistance, shelter operations, and special education. For example, Adams budgeted $860 million for cash assistance in fiscal year 2026, even though current projections put the cost at nearly $1.7 billion, almost double what was budgeted. 

Under the Adams administration, budget gaps were consistently and intentionally understated. In some programs, the true shortfall is nearly double what was publicly disclosed. Mamdani also pointed to a longer pattern of disinvestment driven by the state. During more than a decade under former Gov. Andrew Cuomo, New York City sent far more revenue to Albany than it received in return. In 2022 alone, New York City sent $68.8 billion in revenue to Albany – and received just $47.6 billion back.

“That imbalance has hollowed out our city’s finances and left us with a chasm that can no longer be sustained,” Mayor Zohran Kwame Mamdani said. 

 

Mayor Mamdani said his administration will not allow working New Yorkers – who did not cause the crisis – to become victims of its solution. He reaffirmed the city’s commitment to balancing the preliminary budget for fiscal years 2026 and 2027 on Feb. 17 and renewed his call to raise taxes on the wealthiest New Yorkers and most profitable corporations in New York, while rooting out waste and inefficiencies in city government. 

 

Find Mayor Mamdani’s “Adams Budget Crisis” PowerPoint HERE.

 

Transcript below:

 

Mayor Zohran Mamdani: Good morning. I want to speak directly to New Yorkers, who have for too long been misled and misinformed about the true state of our City's finances. I will be blunt: New York City is facing a serious fiscal crisis. There is a massive fiscal deficit in our City's budget to the tune of at least $12 billion. We did not arrive at this place by accident. This crisis has a name and a chief architect. In the words of the Jackson 5, it's as easy as A-B-C. This is the Adams Budget Crisis.  

 

In 2025, under the banner of what he called the Best Budget Ever, former Mayor Eric Adams handed the next administration a poisoned chalice. He systematically under-budgeted services that New Yorkers rely on every single day. Rental assistance, shelter, and special education, while quietly leaving behind enormous gaps for the future. And knowing his time in office was likely coming to an end, Mayor Adams chose political self-preservation over fiscal responsibility. This is not just bad governance. It is negligence.  

 

And now, the responsibility falls upon us to protect working New Yorkers from paying the price. We expected for months that when we entered City Hall, we would likely inherit a grim fiscal situation. Many of the journalists here reported about an imbalance during the Adams years. Yet, once we looked under the hood, the full picture was staggering. However, Eric Adams is not the only reason we are here. For over a decade, as he governed from Albany, former Governor Andrew Cuomo extracted our City's resources, using our revenue to address state-level holes, while withholding from the City what it was owed. The result is a stunning fiscal imbalance. New Yorkers contribute 54.5 percent of state revenue and receive only 40.5 percent back.  

 

No part of this state gives more and gets less in return than New York City. While we did not create this crisis, we will solve it. And we will do so, without balancing the budget on the backs of working people. Now I want to walk New Yorkers through the nuances of this crisis that we must contend with. Here, you can see former Mayor Adams projected budget gaps, as well as the projections prepared by City Comptroller Lander and Levine as well as State Controller DiNapoli.  

 

These projections were formed independently, but they tell the same story. We are still reviewing the City's fiscal health ourselves, but our early analysis is in line with their findings. And the story that those findings tell is clear. The Adams administration dramatically and intentionally understated the problem. The budget gaps are twice as high year after year. Notably, Mayor Adams underestimated known budget expenses so he could show FY26 was balanced. These are not differences in opinion between accountants. They are measured to the tune of more than $7 billion beyond what he published.  

 

We are dealing with vast figures and statistics that can often feel intangible. I want to place them into a historical context, so that the scale of the crisis is clear to New Yorkers. For reference, the budget gaps we are facing today are higher than they were at the height of the Great Recession. And when compared to the pre-pandemic 10-year average, some of these projected deficits are over 300 percent higher. This is not business as usual. This is a historic challenge and it demands an honest response.  

 

Time and again, Adams kicked the can of responsibility down the road. Last year, when he laid out his January and May financial plans, he not only failed to budget sufficiently; he ignored projections that indicated major expenses [that] would rise in years to come. These expenses not only totaled nearly $8 billion, they're on an upward trajectory. And still, former Mayor Adams refused to incorporate them, leaving a massive $3 billion hole in FY26. The budgetary choices he made in the past, have consequences that we reckon with today, with ripple effects extending into the years to come.  

 

Former Mayor Adams made the repeated, deliberate choice to under-budget. It was a pattern. He budgeted $860 million for cash assistance this fiscal year, but current estimates are $1.625 billion, nearly double what he had accounted for. He budgeted $1.47 billion for shelter costs this fiscal year, but current estimates reflected an additional, unaccounted for, $500 million. He budgeted paltry fractions of what was actually required, undermining the city's ability to fulfill its promises. These are not optional services. They are critical responsibilities of City government. Let's talk about the state and City imbalance.  

 

In FY22, New York City sent $68.8 billion in revenue to Albany and received $47.6 billion back. That is more than a gap. It is a $21.2 billion chasm, and it can no longer be sustained. It is measured in city schools that could have more teachers, parks that could have more staff, playgrounds that could be built across the five boroughs. That $21.2 billion gap occurred because over the decade Governor Cuomo was in office, the state saw our city as a place from which wealth could be extracted without recognizing the needs of that same place. New York City is the economic engine of this state.  

 

While we contribute the majority of state revenue growth, we do not receive the same proportion of state funds. From FY2010 to FY22, a period where Andrew Cuomo served as governor for almost the entire duration, state revenue grew by $48 billion. New York City alone generated 64 percent of that growth, or $31 billion. But when expenditures increased by $36 billion, New York City received only 42 percent, or $15 billion. Annually, that is an $8 billion shortfall of what our city was owed.  

 

Our city is one of multitudes, containing both incredible affluence and tremendous needs. And for too long, only half of that equation has been met. Each of these slides, and the numbers they contain, tell a clear story. It is the story of a city that is economically powerful and central to the success of the entire state, if not the entire country. And it is the story of a city that has been failed by its leaders of the past. Together, let us tell a new story. As we approach the preliminary budget, City Hall will do what the law requires.  

 

We will deliver a balanced budget over two fiscal years. We will also do, however, what former Mayor Adams never did. We will be clear and direct about our needs with Albany. Working people did not cause this crisis, and they cannot be made the victims of its solution. In my inaugural address, I made a promise. I said that we would overcome every moment of adversity, together. And we would meet every moment of fiscal challenge with ambition, not austerity. That promise stands.  

 

We will not shrink from this moment. We will not succumb to small ideas. We will meet this crisis with the bold solutions it demands. That means recalibrating the broken fiscal relationship between the state and the city. And it means that the time has come to tax the richest New Yorkers and most profitable corporations. This is the wealthiest city in the wealthiest country in the history of the world, and yet we have allowed one in four New Yorkers to live in poverty. It doesn't need to be that way.  

 

We will remain in constant conversation with Governor Hochul and legislative leaders, and we will do something that too many New Yorkers have learned not to expect from City Hall. We will be honest, transparent, and we will communicate the decisions we're making and why we're making them. We have inherited a crisis from the past New York, but it need not define our future. We will overcome this moment of hardship and chart a new course for our city. It will be difficult, but anything worth doing always is. Thank you.