Zohran Mamdani warns Wall Street bonanza won’t save NYC’s finances: ‘Larger than Great Recession’

New York City Mayor Zohran Mamdani said that Wall Street’s booming year will not be enough to stave off a financial crisis that he says is worse than the Great Recession nearly two decades ago.

Speaking with Myles Miller on "Balance of Power: Evening Edition," Mayor Mamdani said, “Wall Street’s announcement is something that is very encouraging and frankly will be helpful in dealing with a $12 billion fiscal deficit,”

Mamdani also said in the interview that the city’s relationship with its wealthiest residents and corporations has to change. His statement came as he amped up pressure on Governor Kathy Hochul to hike taxes for the richest residents and corporations, asking the state to send billions more in aid to New York City as he faces mounting budget holes.

The financial industry is a key contributor to New York’s tax base, accounting for about 7 percent of the city’s tax revenue during the 2024 fiscal year.

Banks and investment firms have also brought more of their workers back to the office than other industries, which helps boost economic activity across Manhattan, according to the state comptroller.

That’s why the industry’s profits are closely watched by New York officials. For 2025, the five biggest US banks reported a record $134 billion of trading revenue and an upswing in dealmaking. The industry’s bonus pool is expected to reach a record.

“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 talking about something that is larger frankly than what the city even faced during the Great Recession,” Mamdani was quoted by Bloomberg as saying.

Over two years, New York City faces a projected $12.6 billion budget gap — deficits he blamed on his predecessor Eric Adams and former Governor Andrew Cuomo. Adams and Cuomo, who both ran against Mamdani in last year’s election, have denied those allegations.

In a bid to help fill those holes, Mamdani launched a campaign earlier this week to lobby lawmakers in Albany and Governor Kathy Hochul to hike taxes on the richest residents and corporations, asking the state to send billions more in aid to the city.

Mamdani said fixing the issues requires an “all of the above approach.”

“The city’s relationship with its wealthiest residents and corporations has to change,” Mamdani said.

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 because of plentiful income tax receipts and Wall Street bonus revenue, as well as the performance of the stock market, which was buoyed by artificial intelligence companies.

The calls for higher taxes and more state aid set up a conflict with Hochul, who has repeatedly objected to 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 said on Wednesday. She acknowledged that Mamdani has been pitching for the change in policy since his campaign and pledged to work closely with the mayor’s office through the budget process.

State budget officials said last week they were keeping some funds in reserve in the event of an economic downturn or further federal cuts, but Mamdani argued the state could simultaneously spare funds for the city and also save for the future.

(With inputs from Bloomberg)