Margaret Thatcher once characterized socialism by saying, “The problem with socialism is that you eventually run out of other people’s money.” The experience of Zohran Mamdani’s quixotic attempt to transform New York City into a socialist paradise, an oxymoron, demonstrates that Thatcher’s observation requires an addition: you also need the permission of the people paying for it.
In layman’s terms, like a child asking his mother for ice cream money, Mamdani asked Governor Hochul for permission, and she said “no.”
New York City Mayor Zohran Mamdani’s campaign promises face structural barriers that make implementation impossible. Under New York State Constitution Article XVI, NYC mayors cannot raise taxes independently. Only the state legislature can authorize local tax increases, requiring approval from both chambers and Governor Kathy Hochul.
During a PIX11 interview in early January 2026, Hochul stated that increasing taxes on wealthy New Yorkers is “completely off the table.” She pointed out that 1.5% of New Yorkers pay one-third of the state’s entire budget. She refuses to risk driving them out with higher taxes.
Mamdani proposed a 2-percentage-point increase on NYC income tax for those earning over $1 million, raising the rate from 3.9% to 5.9%, plus increasing corporate tax rates from 7.25% to 11.5%. His campaign estimated this would generate $4 billion annually. Without this revenue, his agenda collapses.
Hochul’s January 2026 $260 billion state budget includes no income tax increases and extends the 7.25% corporate tax rate for three more years, rejecting Mamdani’s proposed increase. While State Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins have expressed openness to tax increases, Hochul faces her own 2026 re-election campaign and a primary challenge from Lt. Gov. Antonio Delgado.
Even if both legislative chambers pass tax increases, Hochul can veto the legislation. With her own election approaching, it is unlikely that she would take a radical decision that would alienate her wealthy donor base. Overriding a gubernatorial veto requires a two-thirds supermajority in both chambers, which Mamdani’s allies cannot achieve.
NYC Comptroller Mark Levine announced in mid-January 2026 that the city faces a $2.2 billion deficit for fiscal year 2026 and a $10.4 billion deficit for fiscal year 2027, totaling a cumulative gap of $12.6 billion. Levine blamed chronic underbudgeting by the Adams administration for rental assistance, overtime, shelter costs, public assistance, DOE due process cases, and MTA contributions, totaling $3.8 billion in unbudgeted expenses for FY2026 alone. He stated that the deficit was not caused by a bad economy but by budgeting decisions from the previous administration.
This is the first time since the Great Recession that the city faces a budget shortfall of this magnitude this late in the fiscal year. Mamdani’s first deputy mayor Dean Fuleihan stated the administration would only include new tax revenue if it were included in Hochul’s budget, which it was not.
With a severe revenue shortfall, Mamdani’s plans for free programs are unlikely to materialize. He has promised fare-free buses by eliminating the $2.90 fare on all MTA buses citywide, universal childcare, and state-funded “baby baskets” for every newborn containing formula, diapers, and postpartum supplies.
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