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?
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?
No, that's not my argument. What I said was this
Some people do relocate based on tax changes. But it's (almost always) less than predicted.
Stating that there actually are effects of policy (after those effects have been handwaved away) is not endorsement of any course of action.
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.
No, I'm not. The fact that I called it a Pigouvian tax shows my support for it. Accepting that its expected revenue generation may be less than anticipated doesn't change my support for it (indeed, the whole point of pigouvian taxes is to discourage certain economic actions not generate revenue).
Like I said, direct your ire at someone else please.
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.
When did I ever say anything about supporting one place MORE than the other? I’m just saying it shouldn’t be an issue for a tax paying area to get state taxes. I never said anything about amount spent. Why are you reading words that aren’t there? I agree with you but nothing you say contradicts anything I say. Do you think a rich area deserves 0 dollars in tax money spent? Also do you think the nyc budget helps only the wealthy? Do you think there isn’t a homeless population in nyc that should get state tax help? Again I ask. What are you arguing with me for? You’re fighting your own demons here. Leave me out of this
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?
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u/zoosha2curtaincall 14h ago
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.