Wall Street windfall won’t avoid NYC’s financial crisis
Despite Wall Street’s booming year, Mayor Zohran Mamdani warns that it will not be sufficient to prevent a financial crisis that he claims is more severe than the Great Recession of nearly two decades ago. “Wall Street’s announcement is something that is very encouraging and frankly will be helpful in dealing with a $12 billion fiscal deficit,” Mamdani said in an interview. The financial industry plays a crucial role in New York’s tax base, representing approximately 7 percent of the city’s tax revenue for the 2024 fiscal year. Banks and investment firms have returned a greater number of their employees to the office compared to other sectors, contributing to increased economic activity throughout Manhattan, as stated by the state comptroller. The industry’s profits are therefore under the careful scrutiny of New York officials. In 2025, the five largest banks in the United States announced a remarkable $134 billion in trading revenue, alongside a notable increase in dealmaking activities. The bonus pool for the industry is anticipated to hit an all-time high.
“The reason I cannot point to Wall Street and say the deficit will be taken care of is simply the sheer scale of this deficit.” We are discussing an issue that is, quite frankly, more significant than what the city encountered during the Great Recession. Over two years, New York City confronts a projected $12.6 billion budget gap — deficits he attributed to his predecessor Eric Adams and former Governor Andrew Cuomo. Adams and Cuomo, who both contested against Mamdani in the previous year’s election, have refuted those allegations. In an effort to address these gaps, Mamdani initiated a campaign earlier this week aimed at persuading lawmakers in Albany and Governor Kathy Hochul to increase taxes on the wealthiest residents and corporations, urging the state to allocate billions more in aid to the city. Mamdani stated that addressing the issues necessitates a “all of the above approach.”
“The city’s relationship with its wealthiest residents and corporations has to change,” Mamdani stated. The state’s budget coffers are overflowing this year — New York garnered $17 billion more in tax revenue than it anticipated it would get a year ago — largely due to abundant income tax receipts and Wall Street bonus revenue, alongside the stock market’s performance, which was supported by artificial intelligence companies. The demands for increased taxes and additional state assistance have created a clash with Hochul, who has consistently opposed raising levies. “We’re not raising taxes in the state of New York, I’m not raising taxes for the sake of raising taxes,” she stated on Wednesday.
She recognized that Mamdani has been advocating for a change in policy since his campaign and committed to collaborating closely with the mayor’s office throughout the budget process. State budget officials indicated last week that they were reserving certain funds in anticipation of an economic downturn or additional federal cuts. However, Mamdani contended that the state could both allocate funds for the city and save for future needs.
