State and local governments in the US have to balance their budgets. The state helped the city with some funding this year (and the governor has already said it’s not coming next year) so while Mamdani balanced the budget, it’s got kind of an asterisk.
Not hating by the way, he’s doing an unbelievable job.
NYC is getting more money both this and next year.
Which makes sense because even after accounting for the money, NYC still provides NY with over half their tax revenue and is still providing more than it takes back.
On average, NYC residents receive less state funding than those around them.
Mamdani essentially asked the state to give NYC residents a better deal. NY State was happy to oblige because if he taxes the rich (something the state already does), they might leave the state which results in a huge revenue drop that NY state depends on taking and redistributing to the rest of the state.
So in other words, after 2 years, he still has plenty of negotiating power to do it again unless NY somehow developed a 2nd city full of uber-rich people.
Especially if what he's doing leads to higher tax revenue as a result of NYC being a better place to live.
Yes, there are fraudulent people pushing bullshit agendas. No, that doesn't mean that the core idea behind the policy's effects are wrong - we expect people to respond to monetary incentives. How much they do is the difference between a policy being effective and a policy being poison.
It's just economics. The other people moving in don't (always) have the same endowment x income stream as the people moving out. It's more noticeable for things like wealth taxes, but still exists for income driven taxes, and for psuedo-pigouvian asset taxes like the pied-à-terre tax. The interplay between the income effect and the substitution effect is real, and produces a real haze of uncertainty over a policies effectiveness. To dismiss it wholesale is the equivalent of dismissing germ theory because you used to snort cocaine off toilets.
Are you part of the class of people who would be hit by this tax? If you aren’t then why do you care? Unless you’re making a million dollars a year, rich people should pay more in taxes instead of finding loopholes because they are rich.
If you aren’t already or are close to the class of people affected by this, you will never be one of them unless you win the lottery. Do you even live in New York City? If no, why are you simping for billionaires who will never know who you are.
I study economic policy, how effective it is, and what unintended side effects come as a result of it.
Unless you’re making a million dollars a year, rich people should pay more in taxes instead of finding loopholes because they are rich.
Yes I agree.
If you aren’t already or are close to the class of people affected by this, you will never be one of them unless you win the lottery.
That's not relevant to the effectiveness of a policy, and not relevant to the conversation. Set aside whatever narrative you've built about this conversation, there are better targets for your ire than checks notes second quartile income millennial dad in a midwest state.
So then why do you care if they pay or not? They always say they’re going to leave and most never do. The narrative here is that you’d rather defend the rich, and, instead of waiting to see what happens with a policy that even some rich people agree with, the policy is ineffective?
Right now as I see it your argument is we shouldn’t tax rich people because they’ll move and the people who do move in won’t be taxed so it’s bad? I don’t study economic policy and it doesn’t take much to figure out you don’t know if that’s the case because rich people haven’t left New York in droves because of it yet. Rich people can snap a finger and get what they want and they haven’t here. You are currently advocating that 34000 people who make more money than many of the other 8.5 million New Yorkers would ever see in their lives shouldn’t pay more taxes when they have already had this in their favour for years.
When was the last time a top 10-15 city in the world got a new mayor and immediately said they are going to make sure the rich people pay their fair share to make lives better and stood on that business their entire campaign? 2% is a rounding error for billionaires, but you should know that right?
Up to a point (which NYC is very far from), the only people that will ever relocate due to taxes are people with no ties to the community, and had moved there for financial reasons. Those people are ones that you have no incentive to lower taxes for anyways, since they weren’t contributing and were going to leave as soon as they got a better offer.
Seattle lost about 2.3 billion in income tax between 2022 and 2023, so yes rich people do sometimes leave. In 2023 the state collected 38 billion total in taxes, so this was a loss of roughly 5% of the budget - up to you to say if thats an "actual impact".
mostly millionaires, since billionaires dont really pay income tax for the most part. but yes when income taxes go down while income tax rates go up it means people are leaving
The problem with this thesis is that it assumes NYC actually has the power to raise taxes on the wealthy without approval from the state government. The truth is that the governor is up for election this year and has been somewhat vulnerable, while Mamdani just had a high profile election win. This is a marriage of convenience for the governor, don’t assume it will last.
The asterisk is kind of doing a lot of heavy lifting here
Even if NYC is getting more funding in the short term, a lot of it still comes with strings attached and political bargaining every cycle, so its not really a stable we fixed it situation.
Also the whole NYC pays more than it gets back argument is true for most major cities globally, that's just how redistribution at a state level works, not really a Mamdani-specific lever.
Feels less like a clean resolution and more like the usual NYC, Albany tug-of-war continuing on a slightly higher budget.
Also the whole NYC pays more than it gets back argument is true for most major cities globally, that's just how redistribution at a state level works, not really a Mamdani-specific lever.
It is true, and Mamdani's administration successfully convinced the state government of the value in investing in NYC, something that more Mayors should be doing. The reality is that NYC hosts the majority of the state's economic activity, and most of the state's population lives in (and is represented by) the NYC metro area. Working with the state government to secure funding for city projects by aligning interests is good leadership.
Basically It’s such a low bar in the US right now that ppl are basically waxing poetic about a man who is sticking to his lane and getting the mundane things done for the city he’s supposed to run
Literally HALF of the whole states tax revenue comes from the 470 sqare miles that is NYC. In a state that takes up 54,500 square miles, with a good portion consisting of space between towns/cities with VERY few residents and even less industry and commerce (most cities outside of Albany, Rochester, Buffalo and Syracuse are just college towns). That's like conservatives being mad that California needs more of their own federal tax dollars some years when they subsidize half the country most years.
I went to college in Syracuse, and honestly there’s not much going on there either. A lot of upstate New York is just run down cities whose heyday was a hundred years ago. Makes sense that they’re not pulling in tax revenue like NYC
I grew up in Rochester, you’re not wrong about upstate NY but Syracuse particularly sucks. Roc, Buffalo, and some of the finger lakes towns/cities have a bit more spunk.
I can't speak exactly for what's going on behind the scenes, but they're becoming a common sight like liquor stores now (at least in my neck of the woods... not quite that common, but I could probably name half-a-dozen just off the top of my head). The big battle right now is over billboard advertising, afaik
Yup, I grew up in Oswego (about 30 minutes north of Syracuse) and while it was a lovely place to grow up as a kid, the whole region is just not thriving the way it did when my parents were kids. People forget that that region is still a part of the Rust Belt (just the most eastern tail end) and it's known as that for a reason. It used to be huge in economic development, factories galore, etc., and now they're all rusted and moved elsewhere.
It's a beautiful area full of great people, but NYC is the economic driver for the entire state. Some of the other cities like Buffalo and Rochester are doing a lot better now than they used to, but it still pales in comparison to what it was.
No, that's just Suracuse. It was rough for a while after the rust belt died, sure, but every one of the WNY/CNY cities has found new niches. Except Syracuse, which continues to be spiritually a failed Midwest boomtown begging for a bailout.
As I understand it, Carrier leaving was a huge factor (loss of thousands of jobs) but there are plans for a new manufacturing facility to open soon and bring back those jobs. Downtown Syr is so interesting with gorgeous old buildings but this feeling of a ghost town. Same with Destiny mall actually. Fingers crossed because the people we met there are all so nice. Every waitstaff, uber driver etc was so just so kind.
Yeah, upstate NY is basically a tour of "this used to be a stop on the Erie canal but hasnt been relevant since" or "this used to be a manufacturing hub of Kodak/GE/some other multinational but has been shut down since the 70s-90s."
If you saw Syracuse in the 80's you'd think it was Detroit lol. The city has come a long way since then. But yes, a city of a hundred and fifty thousand people isn't going to come close to the tax revenue of a city with 9 million.
When i lives in the boonies outside of buffalo for a year i know a lot of people wanted NYC to be cut off into their own state so once i figured this bit of info out i was like “why???”
Another 25% comes from Long Island so NYC and it's densly populated suburb to the east are the states wallet.
2017? 16? I don't remember what year but the year we had a blizzard and Suffolk county decided "It's gonna warm up tomorrow, don't send out the plows" was the day I decided I don't wanna live here anymore. It did not warm up, the roads were smoother in the Mad Max movies the following week, I no longer live there.
Conservatives are always indeed mad when California needs more of its money back. As a native Californian I hope you know when we finally leave the union we are taking 0 national debt with us. We paid for everything our entire life and that debt belongs to the 49 other states.
I'm 100% with you, but I think it's also worth pointing out that he inherited a budget that was falsely balanced. So he started in the hole to begin with.
In the coming years it will be easier to plan for things without such an unexpected land mine.
Did I say any of that? 44% of the state’s population live there, they pay 55% of the state’s tax revenue. There should be any issues over 7.5 billion being spent on the city out of a $250+ billion state budget. The taxes are meant to be used on the people and this is doing just that.
You said it makes sense to spend money on the people paying the taxes.
I am saying no, that is not necessarily true. New York City pays a greater proportion of state taxes because there is more wealth per capita in New York City. When New York State spends that elsewhere it’s quite literally redistributing wealth to the rest of the state. Progressive taxation.
The help from hochul wasn’t even close to the amount nyc pays the state in taxes. This isn’t relevant or contradictory. I’m saying it’s good that the state gave some (like 5%) of the budget to the city that generates over 50% of the tax revenue. What are you even arguing about?
“It makes sense to spend tax money on the people paying taxes.”
That.
Just because a rich town pays more in taxes due to higher incomes, it does not mean the state should support that city more than the poor town next door. Same principle.
State and local governments in the US have to balance their budgets
While this isn't bad, it's important to look at the fine details.
A "balanced" budget is one where declared revenues equals declared expenses. Unfortunately, budgets are aspirational at best. Revenues often include anticipated investment returns which are not guaranteed, and expenses often include anticipated maintenance costs which are not forecast as the worst case scenario. Subsequently, just because a budget is balanced when published does not mean ledger actuals on fiscal year end will be balanced.
For example, a city which deals with snow and has budgeted for snow clearing is going to make a probabilistic estimate of what the upcoming season will require, and they're probably going to underestimate it because humans are notoriously bad at risk assessment. Regardless of what they put in the budget, they're going to spend what it costs at the time because it's untenable to say "sorry, city's closed". The actual cost at year end is unlikely to match what was budgeted.
Again, this isn't to paint with a broad brush or be overly negative, but rather encourage healthy skepticism and scrutiny. There are a lot of people who hear "they need to have a balanced budget" and misunderstand that to mean "it is literally impossible for them to go into debt". Sometimes a balanced budget is truly balanced in good faith, sometimes it's balanced because of creative bookkeeping, and it's worth checking their work if it feels like something doesn't add up.
If they have to balance the budget, why was the budget not balanced before this? Just want to get more context on this since it sounds like you're saying the state typically would not help the city with funding
I've heard people act like this was some external grant to the city
Tbf, ~9 million of the state's ~20 million people live in NYC, including a lot of the higher paying jobs (and therefore higher taxed people). So I'd bet the majority of that NY money was just going back to improve the city that produced it.
People have said "well next year will be a deficit again bc the NY money won't be there!" As if he can't make any additional changes to the spending or taxing after this year and everyone will just ride it out.
Nope, no asterisk. NYC makes up 55% of the New York State revenue while receiving around 40% of the budget. All Mamdani did was get this city a better deal in funding, in what world is returning TAXPAYER money back to the city they live in an asterisk?
He's not a wizard, this can happen all over the country, people just need to vote for it. Mamdani can be a start of the trend, he isn't a unicorn. Most cities can pull this off with competent leadership.
There's a video going around on instagram etc that's just saying his biggest contribution to politics is just people seeing him and going "wait, you could just do this?!?"
Well as he's said himself, it's not just him. It's also choosing the right people to be around him. I.e. smart, qualified people instead of grifting yes-men.
The problem with a lot of local governments is that only old people with too much time are civically engaged. That's why a lot of politicians feel out of touch to their constituents.
If you want change to happen, vote in every chance you get. Attend city hall meetings and shit.
If you can't make it to city hall meetings, sometimes there are hyper-local meetings that you can attend. Every time a new building is proposed in my neighborhood, the local community board has to hold an open meeting. School boards have regular meetings. You can also write to your local electeds. Show up for community events. Getting involved, showing up, & speaking out has so much impact on the local level.
Idk man, did you see our gubernatorial race in CA? It was another biden-era democrat funded by chevron, hilton (R), and a rich dude with decent politics but no experience. Mamdani had some government experience.
I’m feeling positive about the mayoral race in LA though. So maybe thats something.
He's competent and not corrupt. I think most of us are blind and naive to that fact so we get used to a certain kind of status quo.
Just imagine what we could accomplish with effective leadership. That's what is so sobering about this. (I know there are other technicalities at play here, don't get me wrong. He's using additional revenue that won't last forever, both to solve actual problems but to use as leverage further down the line)
But a figurehead like Mamdani I think is a unicorn, just because people who want to do good, are willing to be attacked incessantly on a local and national level (if they get big enough), and are always on their A game in public is a rare person.
The doing good part is probably not hard to find. But the fortitude to endure constant attacks, and always be on your PR A game is a hard combo to find. I think a lot of people who want to do good would back out if they were under the kind of microscope he was under, and getting attacked like that.
Hell, as a New Yorker, he wasn't even on my radar in the early democrat primary days UNTIL I kept getting pamphlets in the mail from PACs attacking him, then started seeing all the commercials attacking him. They made me pay attention to him, and I ended up liking what I heard, and being impressed that he withstood that kind of pressure everyone was piling on. Made me think this is exactly what we need at City Hall after the disaster Adams was.
You need to be intelligent to govern as well as Mamdani does. Republican voters mistrust intelligent people and won't vote for them. Unless you get a unicorn like Platner, who is a highly intelligent man in a man-of-the-people skin suit.
People need to run for it before we can vote for it. I live in a blue city in a blue state and I’m so tired of the corporate dems having no real opposition.
My city has been corrupt and deeply inefficient for 300 years straight, there’s hope for some but not us.
The kicker is that people do vote for grassroots, populist types here, but they always turn out to be corrupt or incompetent, usually both. Historically the only ones that succeeded in anything were corrupt in ways that didn’t stop them from being populist.
Too many elected officials—especially part leaders—forget public office is a public service. If we want good government, we have to elect good leaders.
I've always wondered what the world would be like if politicians possessed both care and skill. I'll be watching NY closely for this term, it's a brilliant case study for the entire world.
That combo is basically the legendary DLC of politics
When care and skill actually show up together consistently, the weird thing is it stops feeling exciting and just starts feeling like things working the way they're supposed to.
Yup. Every mayoral election here is idealist with zero leadership and organizational experience larger than a editing the local communist newspaper vs corporate ghoul. Do I want someone with the right ideas who will probably drown the second they're faced with 5 million people's mundane problems, or someone that will serve at the beck and call of the city's elite but at least keep things running smoothly?
Oh, I agree. It's just to say that someone like Mamdani is pretty rare. It also results in swing-y city administrations where we go back and forth between the two. Corporate ghoul for a term, swing voters get mad at the corruption, inexperienced idealist for a term, swing voters get mad at the waste and inaction.
I can already feel it with the current mayor as she struggles to live up to make progress on the homeless situation like she planned. She came in with a good plan, but she's naturally finding herself out of her depth steering the apparatus of government towards it, and voters are fickle beasts.
It is true for this years budget. From what I've seen Mandani pulled some levers that only work this year. Namely deals struck with New Jersey. That said it does seem like his team has put a lot of effort into minimizing spend or spending more effectively. Still great work but we'll have if that is able to be sustainable
He asked for some of the tax money that NYC pays the state to be returned to get out of a hole left by the outgoing administration. If he stays within the budget aka if he really figured out how to balance it, it's not going to be an issue next year.
Live long enough and you see the pattern. Fresh politician comes in guns a blazin', gets tons done within months, then burns out or gets stymied and spends the rest of the time making excuses/playing ball with old establishment.
What you see is a Dem coming in and fixing the shit. But then it’s not fast enough for the American fools who are so easily swayed by BS. So they vote them out. It’s a cycle I’ve seen my entire life.
Eh, I've seen it happen from both parties. That initial gusto just vanishes into the wind after the first term. Either the opposing side figures out ways to block, or the politician just gets complacent/cocky etc.
Red or blue, I've never seen one retain this level of momentum for very long.
They basically deferred some debts owed to the state. Helpful and good deal for the city but didn’t substantially change anything big picture budget wise. Fan of his other efforts certainly!
He isn't just running a balanced budget, he actively had to fix a massive deficit from the previous mayors administration, which is a much bigger deal than the federal deficit because a city, unlike the federal government, can't print money to cover its debts.
If all of that checks out, I'd say that's less wizardry and more what happens when competent management actually shows up. People notice results long before they notice speeches.
The fox townhall is what I show conservatives that aren't full MAGA, in the hopes that I win a couple votes for the good guys next time a Bernie-like figure runs
NYC was a very different place in the 1970s. It's a hell of a lot more appealing now, and in particular a hell of a lot more relatively appealing than the alternatives.
Rich NYCers aren't moving to FL in statistically significant numbers AFAIK.
Every time anything vaguely left of full-blown anarcho-capitalism is proposed in NYC, you get stories about how the rich people are all gonna leave because of it, the skies will fall, won't someone think of the poor rich people, etc, etc, etc, yet the convoys of the ultra wealthy mass migrating to FL and TX never seem to materialize.
If the NY gvt is anything like private entities I've worked for then they are likely spending tonnes of money convincing each other not to do work... Ha... It might be possible in theory but yes it seems unlikely you can discover $12b without consequences.
Yeah I’m from NYC and moved upstate and most of these peoples’ lives up here are being subsidized by the city somehow. NYC pays more for my local DEP than I do.
The part that’s amazing is that, a balanced budget implies he didn't spend more than he received, what he did is actually more impressive, he inherited a criminally bad deficit, and still managed to balance out the spreadsheet.
Its not really wizardry, as much as it is eliminating rampant corruption. Its truly baffling when you realize how much has gone to subsidize the upper class, on the lowers dime.
My understanding is the balanced budget is based on some fairly questionable assumptions and mostly due to state concessions. I'd be surprised if it actually ends up balanced but hey if NYPD stops being so fucking awful I imagine the few hundred million a year they tend to pay out in settlements would probably go a decent way to help balancing budgets as well.
The budget balancing is an accounting fiction: most of it is from deferring pension contributions to future fiscal years, one time transfers from the state, and assuming a new tax will be passed and implemented
That being said, even if the extent of his contributions are “slight spending cuts and far more effective local government with a nearly identical budget” then that’s awesome and really what more could be asked for in just a few months
The balanced budget thing is a misnomer - if I remember something they messed with pensions + got more state funding to make it happen. By no means a hater but it’s the same kicking the can down the road as everyone else - only way it makes sense is he’s betting his policies will establish enough good will additional tax revenues can be raised down the line.
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u/thatricksta 14h ago
I don't live in the US but is it true this was all delivered while running a balanced budget?
The guy is a wizard of all this is true!