New York City Mayor Zohran Mamdani defended his push to raise taxes on the city’s highest earners on Wednesday, arguing that soaring living costs and persistent budget pressures leave City Hall with few alternatives — even as new revenue figures complicate his case.

Testifying before state lawmakers in Albany at a joint legislative budget hearing, Mamdani was pressed to explain why he is urging the Legislature to approve a 2 percent income tax increase on residents earning more than $1 million a year.

“I think the why comes from the fact that we are the most expensive city in the United States,” Mamdani said in response to questioning from Assembly member Amanda Septimo.

“There simply isn’t enough money that we wish there could be,” he added, framing the proposal as a necessary response to mounting fiscal and affordability pressures.

Mamdani warned that failing to invest in public services and infrastructure would only accelerate the departure of working- and middle-class residents, a trend that has increasingly worried city and state leaders.

“If we take that approach year after year, what happens is we do see the exodus that’s happening right now,” Mamdani said. “Working middle-class people leave the city, leave the state, trying to find a place where their ends can be a little bit easier to meet.”

Mamdani has consistently argued that New York’s long-term stability depends on asking more from its wealthiest residents, calling for a 2 percent increase in personal income taxes and a 4 percent hike in corporate taxes.

Since assuming office, he has pointed to what he initially described as a multibillion-dollar budget gap in the current and upcoming fiscal years as justification for the increases. In recent weeks, the administration has warned that without new revenue, the city could face painful cuts to housing, transit, education, and social services.

But new disclosures this week have complicated that narrative.

Mamdani’s budget director, Sherif Soliman, told lawmakers that the city’s previously projected $12 billion shortfall failed to account for roughly $7.2 billion in end-of-year tax revenue. The revelation significantly reduced the size of the projected deficit and raised fresh questions about whether sweeping tax increases are still necessary.

The revised numbers prompted skepticism among some lawmakers and fiscal watchdogs, who argue that the administration may be overstating the urgency of new taxes.

Critics say the shrinking gap undermines Mamdani’s claim that New York is facing an immediate fiscal crisis and strengthens the case for restraint at a time when high-income residents and major employers already complain about the state’s tax burden.

Gov. Kathy Hochul has repeatedly pushed back against raising income taxes, warning that New York is already among the most heavily taxed states in the country and risks driving away investment and talent. Hochul has emphasized economic competitiveness and retention of high earners as central to her fiscal strategy, putting her at odds with progressive lawmakers and the city’s new mayor.

The dispute highlights a familiar fault line in New York politics: whether the state’s affordability crisis is best addressed through higher taxes on the wealthy or through spending restraint and economic growth.

Mamdani and his allies argue that without new revenue, the city will struggle to fund affordable housing, transit upgrades, and public safety initiatives, which they say are essential to keeping New York livable for working families.

Opponents counter that repeated tax hikes have contributed to population losses and business relocations, particularly since the pandemic, and warn that further increases could deepen those trends.

The debate is likely to intensify as Albany negotiates its final budget in the coming months.

(YWN World Headquarters – NYC)