Wall Street fat cats are poised to contribute almost $1 billion more in tax revenue than New York City Mayor Zohran Mamdani projected earlier this year, though a big budget gap still looms.
Hizzoner’s tax-and-spend agenda will reap a massive $956 million windfall thanks to a banner year on Wall Street fueled by tech gains, according to an updated budget forecast for fiscal 2027 that Mamdani’s office released Thursday. So far this year, the Dow Jones Industrial Average and Nasdaq are both up 8%, while the S&P 500 has gained 10%.
City Hall’s revised forecast appeared to confirm recent predictions from Wall Street pay guru Alan Johnson, who said Tuesday that bank bonus pools would swell 15% this year, with payouts rocketing 20% to 30% for masters of the universe on the top trading desks.
The city’s boost in tax revenue mirrors a statewide surge. Albany just padded its own tax projections by a staggering $8 billion on the back of roaring markets and rising wages.
Mamdani has been keen to bankroll a massive expansion of universal child care — a signature pledge that could still force him to hike taxes down the road.
City Comptroller Mark Levine appeared to throw cold water on Thursday’s budget update, warning that the tech boom could soon trigger a massive fiscal hangover.
His office said it had crunched the numbers from an “AI Shockwave” scenario that wipes out $3.4 billion in city tax revenue if smart software guts mid-level banking jobs.
“We need to be ready in ways that we’re not yet,” Levine warned a Citizens Budget Commission crowd Thursday, predicting a severe market crash could spark a brutal unemployment crisis.
Even with the extra revenue from Wall Street, City Hall is sinking into the red with Mamdani’s updated $129.2 billion budget exposing potential fiscal challenges down the road.
The city is staring down a $6.18 billion budget hole for fiscal 2028, a gap that will explode to a whopping $8.96 billion by 2030, the mayor’s own forecast shows.
Exploding social programs have been gobbling up tax revenues. The city spent $1.9 billion last fiscal year on a rental assistance program to move homeless New Yorkers out of shelters, the revised budget says.
That cost spiked 40% in a single year, capping a jaw-dropping 6,700% explosion since 2019, according to city budget documents and the Citizens’ Budget Commission, a government advocacy group.
City worker salaries, pensions and fringe benefits will cost $60.5 billion this year and devour $65.5 billion by 2030, the new budget forecast says, while debt payments alone will crack $12.4 billion by the end of the decade.
Mamdani is banking on $500 million a year from a controversial “pied-à-terre” tax on luxury second homes, a policy facing legal challenges.
The mayor’s readiness to hammer Wall Streeters sparked fears of financiers relocating outside of New York City to states with lower taxes. The Post broke the news earlier this year that Morgan Stanley agreed to a deal to open a major HQ in Dallas, Texas.
“New York’s an extremely expensive place to do business, and if they make it … particularly unattractive from an expense standpoint or regulatory standpoint, that exodus will speed up,” Alan Johnson, managing director of pay consultant Johnson Associates, previously told The Post.