🔗 Share this article

Ambitious promises to make the city less expensive for residents catapulted progressive candidate Zohran Mamdani to his surprising win on election day. Among them are fare-free transit, universal childcare, and a massive expansion in affordable homes.

However, turning the city more affordable for residents is an expensive public undertaking, and many financial experts and politicians to Mamdani’s right argue he confronts too many obstacles to effectively follow through on his key proposals.

Further complicating matters is the federal administration, which will likely withhold financial support for New York in an attempt to sabotage Mamdani and create budget holes that make it more difficult to fund fresh initiatives.

Additionally, New York City must get state legislature approval to adjust several revenue streams. One expert cited the state legislature stopping the municipality from raising pet registration costs in a prior year due to a dispute between the then mayor and a state representative.

“A striking way of stating the issue is the City can’t raise dog licensing fees without state legislature approval, and it was true then, and it’s true now,” the expert said.

However, he and other experts point to tailwinds: Mamdani’s ideas are widely supported and would address fundamental issues. The Democratic party now hold large majorities in the legislature, and several see financial and viable routes to making the proposals a success.

In what ways might Mamdani pay for his ambitious agenda? We broke it down by funding method and initiative.

Generating Revenue

His team estimates it could raise about ten billion dollars by raising the business tax, taxes on the wealthy, and existing fee and tax collections.

Critics say companies and the wealthy will move away, but that is disputed by credible research. Moreover, the corporate tax is on earnings made in the region no matter where a business is located, making the point at least partially moot.

Business Levy Hike

The mayor-elect calculates a rise in state taxes between seven point two five percent and eleven point five percent on business earnings would produce around five billion dollars, a large portion of which would be funneled to the city. State leaders would have to authorize the proposal. State lawmakers have previously supported similar proposals, but the state executive is against increasing levies.

However, the state leader supports childcare for all, a highly favored proposal because child services is commonly seen as too expensive, stated an expert. It would be challenging for centrist lawmakers to “resist enacting a landmark initiative”, he continued. “No one argues ‘Nothing should be done to make childcare cheaper.’”

What’s been lacking, he explained, has been a figure like Mamdani who says: “Yes, it requires funding, and we will raise taxes to get it done.”

Increasing Taxes on the Affluent

Mamdani’s plan calls for raising $4bn with a two percent increase on those earning more than one million dollars annually. Though it’s a city tax, the state government must authorize the rise, and the proposal is typically resisted by centrist lawmakers.

But there is a feasible route, the expert noted. Raising taxes on the rich is widely accepted and, similar to the corporate tax increase, using the proceeds to support popular programs makes it easier to sell in the state capital.

Rent Freeze

Regarding expense, a pause on rent hikes on regulated housing is the easiest to enforce – it’s nearly free. However, a halt must be authorized by the housing panel, and there may not be enough support on it before Mamdani fills it with his preferred candidates.

Fare-Free and Efficient Buses

The plan projects fare-free transit will cost a minimum of seven hundred million dollars, which includes an evasion rate of 48%. Observers suggest Mamdani could likely cover the cost by optimizing or reducing other programs in the municipal $116bn annual spending plan.

Publicly Run Food Markets

A trial initiative for five public food markets that would be built in neglected “food deserts” is projected at $60m and could also be paid for by adjusting priorities in the $116bn spending plan.

Constructing Affordable Housing Properties

Many people to the conservative side of Mamdani have written off the proposal to spend about $100bn building 200,000 affordable units over 10 years, mainly because it would require massive debt. The expert said those opposing this point mostly overlook that the initiative is not to borrow $100bn immediately – the debt would be accumulated and repaid in tranches over multiple administrations.

He also stressed the proposal is not for free housing, but cost-effective residences that would produce income to pay down debt. Moreover, the developments could partially be privately financed.

“This is how the proposal is feasible,” the expert said.

Childcare for All

Implementing childcare access for all would cost from $2.5bn and $12bn by most estimates, depending on whether it is a city or state program and additional variables. Funding is the big question mark – can the business and high-earner levies pass the state capital? An expert commented he anticipated negotiated adjustments, as is typical with large-scale plans.

“Proposals that Mamdani promised will likely be scaled back,” he remarked. “And the state leader’s stated opposition to tax increases may just confront practical limits – she probably can’t get the things she wants on the spending side without some flexibility on the tax side.”