City Facing a Bigger Budget Deficit, Says Comptroller

by Greg David

This article was originally published on January 16 5 a.m. EST by THE CITY

Just two weeks into his new office, city Comptroller Mark Levine is warning that Mayor Zohran Mamdani faces a cumulative $12 billion budget gap that the new mayor must say how he intends to close in an early February budget plan.

The estimate, shared in an interview in advance of a report published Friday, is far higher than the gap projected in Mayor Eric Adams previous budget update and is also higher than other estimates from other fiscal monitors.

Levine believes the current budget will end this fiscal year in June with a $2 billion deficit. The gap in next year’s budget will be closer to $10 billion, his office found. If Levine is correct, that deficit is much larger than what the city has dealt with in recent years and will force Mamdani to make difficult choices.

In addition, Governor Kathy Hochul signaled in this week’s State of the State speech that she will not propose any tax increases in her budget. Mamdani’s top budget advisor, first deputy mayor Dean Fuleihan, said at a Citizens Budget Commission event in December that the administration would include revenue from new taxes only if they were included in Hochul’s budget.

Friday’s announcement is also a sign that Levine intends to be an aggressive watchdog on the budget and the mayor’s policies.

“I plan to be an extremely activist comptroller, including on the budget,” Levine told THE CITY last week. “It is more necessary than ever because we have so much uncertainty in the economy and we need to take steps to close the budget gap.”

The comptroller is also laying the groundwork to fulfill his campaign promises to find up to $3 billion to build affordable housing, resume the pension funds purchases of Israeli bonds, and improve outdated government processes. For example, Levin’s own onboarding was conducted entirely by filling out paper forms.

On affordable housing, he said his office has begun work on a program that will triple the $1 billion the pension funds have already invested in subsidized housing construction in the city. During the campaign he talked about using the money to provide lower-cost development loans for affordable projects.

He also intends to aggressively audit the Housing Preservation and Development agency where paperwork can often hold up construction affordable projects for 18 months. 

And he said he remains committed to resuming the purchases of Israeli bonds to the pension funds portfolio, something predecessor Brad Lander had allowed to lapse.

“Israeli bonds had been part of the portfolio for decades,” he said.

He also noted that a report his office issued this week showed that what little job growth there was in the city last year occurred entirely in health care and social services — and most of that in low paid healthcare jobs, which THE CITY detailed in a story last month.

“We need more homes and we need more jobs,” he said.

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