Statement on NYC’s Preliminary Budget: Progressive Taxes and Increased State Aid are Best Solutions to City Budget Challenges
February 17, 2026 |
New York, NY | Fiscal Policy Institute Executive Director Nathan Gusdorf released the following statement on behalf of FPI:
Mayor Mamdani’s preliminary budget showcases the challenges facing New York City from years of underfunded policy commitments. The City’s $5.4 billion budget gap cannot and should not be closed primarily through spending reductions, which could undermine the quality of city service delivery and stall out the Mayor’s affordability agenda; instead, the budget crisis should be solved through the economically preferable paths of additional state aid and progressive tax increases.
The State remains in a strong position to aid the City, having run an average annual surplus of over $10 billion since 2021, when higher taxes were imposed on top earners and corporations. New York City, which is responsible for over 50 percent of statewide economic activity, has a fair claim to half of that surplus revenue—moreover, the statewide economy depends upon the city’s economy. New York City is in a sound economic position to raise its own tax rates on high earners and the most profitable businesses, as proposed by the Mayor, given steady growth in millionaire-earners’ incomes and record gains in the stock market. Each of these options would be more desirable than raising property taxes across the board or aggressively reducing spending.
New York City is a global commercial center that depends upon a high level of public service provision; it cannot exist without a robust system of public education, social services for the poor and homeless, reliable transit, public safety, sanitation, and a dedicated civil service. Growth in the City’s budget should be seen as a necessary expense for sustaining one of the greatest cities in the world, not as fiscal recklessness, and the State ought to do its part to help the City manage this crisis.
The Fiscal Policy Institute is an independent, nonpartisan think tank that advances sound and equitable fiscal policy to strengthen New York’s economy through research, analysis and strategic communications.
###
Statement on NYC’s Preliminary Budget: Progressive Taxes and Increased State Aid are Best Solutions to City Budget Challenges
February 17, 2026 |
New York, NY | Fiscal Policy Institute Executive Director Nathan Gusdorf released the following statement on behalf of FPI:
Mayor Mamdani’s preliminary budget showcases the challenges facing New York City from years of underfunded policy commitments. The City’s $5.4 billion budget gap cannot and should not be closed primarily through spending reductions, which could undermine the quality of city service delivery and stall out the Mayor’s affordability agenda; instead, the budget crisis should be solved through the economically preferable paths of additional state aid and progressive tax increases.
The State remains in a strong position to aid the City, having run an average annual surplus of over $10 billion since 2021, when higher taxes were imposed on top earners and corporations. New York City, which is responsible for over 50 percent of statewide economic activity, has a fair claim to half of that surplus revenue—moreover, the statewide economy depends upon the city’s economy. New York City is in a sound economic position to raise its own tax rates on high earners and the most profitable businesses, as proposed by the Mayor, given steady growth in millionaire-earners’ incomes and record gains in the stock market. Each of these options would be more desirable than raising property taxes across the board or aggressively reducing spending.
New York City is a global commercial center that depends upon a high level of public service provision; it cannot exist without a robust system of public education, social services for the poor and homeless, reliable transit, public safety, sanitation, and a dedicated civil service. Growth in the City’s budget should be seen as a necessary expense for sustaining one of the greatest cities in the world, not as fiscal recklessness, and the State ought to do its part to help the City manage this crisis.
The Fiscal Policy Institute is an independent, nonpartisan think tank that advances sound and equitable fiscal policy to strengthen New York’s economy through research, analysis and strategic communications.
###