Mamdani’s $126B budget soars nearly 10% from last year, leaving NYC on verge of fiscal crisis
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Skip to main content MetroMamdani’s $126B budget soars nearly 10% from last year, leaving NYC on verge of fiscal crisis
By Craig McCarthy and Matt Troutman Published June 30, 2026, 6:51 p.m. ETSee more of our coverage in your search results.
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Mayor Zohran Mamdani’s inaugural, record-breaking nearly $126 billion budget was set to pass Tuesday — growing city spending by more than $10 billion from last year despite his past dire warnings about the Big Apple’s financial situation.
The under-the-wire vote by the City Council came just hours before a Wednesday deadline and after frantic last-minute attempts to drum up votes for a spending deal that disappointed lefties and moderates alike.
The budget, which includes no significant cuts, ballooned from last year’s roughly $116 billion spending plan, for an approximate 8.5% increase.
And while the democratic socialist mayor managed to balance the budget, City Comptroller Mark Levine noted that he only did so by using $6.1 billion in one-time tricks and short-term savings.
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“This agreement gets the city through an exceptionally difficult year, but it does not resolve the structural challenges ahead,” Levine said.
“With large out-year gaps, limited reserves and significant economic uncertainty, next year’s budget could be even more difficult.”
The city faces a whopping $8.8 billion shortfall for the next budget, according to the city comptroller’s office — setting up Mamdani and the Council for a potential bruising rehash of this year’s topsy-turvy negotiations.
Mamdani and City Council Speaker Julie Menin dutifully smiled for the cameras as they announced their handshake budget deal Tuesday morning, but their grins belied long-simmering tensions.
The budget hit an 11th-hour snag over Mamdani backtracking on a campaign promise to fund the expansion of a housing voucher program — a darling of progressive lawmakers that comes with a hefty price tag.
A skin-of-their-teeth deal preserved the cityFHEPS expansion — adding $175 million to $1.7 billion already on the books — and dropped a contentious lawsuit that Mamdani pursued, much to the dismay of his progressive allies.
And many moderates were blindsided by Mamdani flip-flopping on his promise to add 580 NYPD officers — itself a 180 from his campaign promises that angered his lefty comrades, who mounted a pressure crusade that seemingly led to his reversal.
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The final $125.8 billion budget deal for the 2027 fiscal year included several notable funding increases, including:
- $6.6 billion for the NYPD — a $300 million bump over last year’s adopted budget.
- $38 billion for the Department of Education, swelling its budget by $3 billion from last year.
- $4.2 billion for the Department of Homeless Services, a $662 million increase from last year.
- $2.6 billion for the Department of Health and Mental Hygiene, a $203 million spike from last year.
The budget also puts $350 million in general reserves, a fund that can provide a cushion if belt-tightening is needed last in the year.
But the spending plan ultimately failed to solve the city’s “huge structural budget problem,” said Andrew Rein, president of the Citizens Budget Commission watchdog.
Rein did praise Mamdani’s half-hearted efforts to curb spending growth and waste.
“Unfortunately, that fiscal progress is partly offset by new recurring spending without simultaneous savings to pay for it,” Rein said.
“Two steps forward, one step back slow walks the restructuring needed to stave off a fiscal crisis.”
A fiscal crisis is precisely what Mamdani claimed the city faced after he took office in January, dramatically blaming his predecessor, former Mayor Eric Adams, for leaving him with a $12 billion budget shortfall.
The young mayor revised the estimate to $5.4 billion, contending the gap could be bridged either by taxing the rich or hiking property taxes nearly 10% across the board.
The clear ploy to pressure Gov. Kathy Hochul and the state Legislature to approve a levy on the wealthy dovetailed with Mamdani backing $23 billion in new taxes during his early days in office.
Few of those taxes came to fruition aside from a pied-à-terre tax on luxury second homes, which officials estimated would generate between $340 million and $500 million in annual revenue.
Mamdani was more successful, however, in securing $4 billion in effective bailouts from Hochul that largely delayed massive spending.
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Still, the mayor’s seeming successes weren’t enough for some of his progressive allies. No Democratic Socialists of America lawmakers were at the Mamdani-Menin handshake photo op, and several progressive also skipped it.
Before the Council voted on the budget, Mamdani’s camp desperately tried to push progressives who were unhappy with the housing vouchers deal to hold their noses and approve the budget, sources said.
Two progressives told The Post the cajoling wasn’t enough, but wouldn’t say how’d they ultimately vote.
“But we’ll get there,” said Councilman Lincoln Restler (D-Brooklyn).
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Socialist Momentum Grows as Melat Kiros Wins in Denver
Socialist Momentum Grows as Melat Kiros Wins in Denver
A democratic socialist who lost her job for speaking out about Gaza unseated a 29-year incumbent.
Akela Lacy
July 1 2026, 12:09 a.m. ET
Melat Kiros at a League of Women Voters candidate forum at Montview Presbyterian Church on May 28, 2026, in Denver.
Photo: RJ Sangosti/TheDenver Post via Getty Images
Leftists toppled a three-decade incumbent they’d made the face of the Democratic Party’s failures on Tuesday in Denver amid an anti-establishment wave that has powered progressive and socialist midterm victories across the country.
Voters chose democratic socialist Melat Kiros, an attorney who lost her job for condemning her industry’s silence on Israel’s genocide in Gaza, ahead of longtime Rep. Diana DeGette, a Democrat representing Denver who touted progressive positions on domestic issues but drew criticism that she had grown complacent over three decades in Congress and generally followed the party line on support for Israel.
DeGette’s defeat in Colorado’s 1st Congressional District brought more bad news for Democratic incumbents reeling after losses in New York last week. Party leaders are facing a surge in public frustration with their brand and a cascade of voters who say they don’t wield power effectively. Though some Democratic leaders have discounted those races and claimed that the ascendant candidates’ vision is out of step with the party’s base, leftists and progressives are continuing to notch wins under their noses as they take the battle over the future of the Democratic Party to the polls.
“In the last week, we have taken out 40 years of incumbency,” said Usamah Andrabi, spokesperson for Justice Democrats, which backed Kiros and two of the candidates who won in New York.
Members of the Democratic establishment “hate that they can no longer simply spend unlimited sums of money to buy a seat in Congress, and we are truly proving that organized people power and mass movements can beat the money,” he said. “We’re just having an amazing fucking cycle.”
Kiros, who will face Republican Christy Peterson in November, is heavily favored to win in the solid Democratic district.
“In the last week, we have taken out 40 years of incumbency.”
Anti-incumbent sentiment also came through in the tight Democratic race for governor, where the state attorney general framed himself as the choice against the establishment despite holding statewide office. Two-term Colorado Attorney General Phil Weiser defeated sitting Sen. Michael Bennet after casting himself as outsider who went after President Donald Trump in court dozens of times and won — a fairly standard tactic for Democratic state attorneys general.
That’s not to say every race in Colorado was a warning sign for the establishment. In the statewide race for Senate, the incumbent safely kept his seat as progressive challenger Julie Gonzales fell short of ousting centrist Sen. John Hickenlooper. (Hickenlooper had refused to debate Gonzales and tried to thwart her run early in the race.)
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Mixed Results in Key Districts
In the district encompassing Colorado Springs, Jessica Killin, an Army veteran and previous chief of staff to former second husband Doug Emhoff, easily beat Joe Reagan, a populist second-time candidate and fellow veteran. Killin had far outraised him with the backing of the Democratic Congressional Campaign Committee.
Days before the 5th Congressional District primary, Killin pledged to sign onto a new pact from conservative House Democrats to promote capitalism, equating socialism with the right-wing MAGA movement and promising to fight both. Killin will face first-term incumbent GOP Rep. Jeff Crank, whose district the Cook Political Report changed from “solid” to “likely” Republican.
State Rep. Manny Rutinel, a self-proclaimed progressive who’d recently reneged on some of his policy pledges, meanwhile, beat a former state lawmaker backed by conservative Democrats’ Blue Dog PAC in the 8th District, rated a “toss up” and one of the DCCC’s “races in play” that could help determine control of the House. He’ll face freshman GOP Rep. Gabe Evans, who was ranked last summer as the most vulnerable incumbent in the country.
Rutinel campaigned in the heavily Latino district on fighting the “cruelty” of Trump’s immigration policy and attacked the record of his opponent, Shannon Bird, on the issue. He positioned himself as the candidate who would do more to rein in Immigration and Customs Enforcement. Backed by the campaign arm of the Congressional Hispanic Caucus, Rutinel backed off of some of his more left-leaning stances during his campaign, such as restricting military funding for Israel, establishing Medicare for All, and opposing fracking. He ran without the support of the Working Families Party, which had previously endorsed him but backed another candidate who dropped out of the race.
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I'm inWhile Blue Dog-backed Bird had the institutional support of the centrist and party-aligned New Democrat Coalition Action Fund and EMILY’s List as well as the pro-Israel Democratic Majority for Israel PAC, Rutinel had the advantage in fundraising and dominated ad space.
“Voters can see through the hollow words and platitudes of the corporate-backed candidates who have tried to hijack our working families-centered messaging during this campaign,” said Carlos Valverde, Southwest regional director for the Working Families Party. “People are tired of status-quo, do-nothing politics that protect the comfortable while working families struggle with housing, healthcare, wages, and basic dignity.”
In Denver, according to Andrabi, on-the-ground energy from the campaign’s supporters made the crucial difference. While DeGette received a last-minute infusion of super PAC money, the Kiros campaign “knocked 115,000 doors in this race, which is just insane.”
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I’M BEN MUESSIG, The Intercept’s editor-in-chief. It’s been a devastating year for journalism — the worst in modern U.S. history.
We have a president with utter contempt for truth aggressively using the government’s full powers to dismantle the free press. Corporate news outlets have cowered, becoming accessories in Trump’s project to create a post-truth America. Right-wing billionaires have pounced, buying up media organizations and rebuilding the information environment to their liking.
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