u/Fragrant-Inflation31

More New York jobs are now at risk as major firms reconsider expansion plans amid the mayor’s anti-business rhetoric and ongoing “tax the rich” messaging from Democratic leadership.

I feel like a lot of the conversation around the budget cuts is missing a piece of the puzzle.

The City Council response actually points out that DOE spending isn’t just about funding levels, it’s also about how the money is being used. There are a lot of contracts that aren’t competitively bid, and some of them look pretty redundant.

For example, they’re talking about potentially $175M in savings just from cleaning up office equipment and tech contracts that don’t really make it into classrooms.

Another issue is how often “emergency” procurement gets used. It’s supposed to be the exception, but it sounds like it’s become pretty routine, which means less oversight and no real bidding process.

So when City Hall talks about a budget crisis, part of me wonders how much of that gap is actually structural vs. how much is just inefficient spending.

Not saying cuts aren’t real, but it seems like there’s a procurement angle that isn’t getting much attention.

Also, if you're interested, there’s a book called "Red Mayor, Green Money" by Stephen J. Darwin that gets into how city contracts and these “green” initiatives can get tied up in politics. It’s a pretty interesting breakdown of how this stuff actually plays out behind the scenes.

Curious what people think… should DOE be pushed harder on competitive bidding, or is this just how a system this big ends up working?

Kind of wild timing here.

While Albany and City Hall are pushing this pied-à-terre tax aimed at second homes and “global elites,” Hochul just crossed into millionaire territory after selling her condo, according to her latest disclosures.

Nothing wrong with making money, obviously. But it does raise an interesting point.

Right now the pitch from policymakers is basically:

– high-end real estate is an easy place to pull revenue from

– taxing $5M+ second homes won’t really impact the market

– and profits at the top should be “shared” more

At the same time, the people making those decisions clearly understand how this market works—and when to exit it.

That’s something Stephen J. Darwin brings up in Red Mayor, Green Money too—the idea of “sticky” vs. mobile capital. The luxury segment is about as mobile as it gets.

So I guess the real question is:

does it change how people see this policy when the same people pushing it are also benefiting from the market they’re targeting? Or is that just how NYC politics always works?

Link: https://a.co/d/0bpIC1Us

Mamdani and Hochul just rolled out a proposed pied-à-terre tax aimed at foreign buyers and people who keep NYC apartments as second homes. Politically, it’s a strong headline. Economically… I’m not so sure it plays out the way they think.

Quick rundown:

- Right now: There’s basically no penalty for a second home. Someone using a $20M apartment a few weeks a year pays the same base property tax rate as a full-time resident.

- Proposed change: For non-primary homes over $5M, there’d be an extra tax starting around 0.5% and going up to 4% for properties above $25M.

- Expected revenue: Around $500M a year.

On paper, that sounds like easy money. But zoom out a bit:

First, $500M isn’t nothing, but NYC is staring at a $10B+ budget gap next year. This barely moves the needle.

Second - and this is the bigger issue - it assumes those buyers will just sit there and pay it. That’s not how this part of the market works.

People who actually live here are “sticky.” You can raise taxes and they’ll complain, but they’re tied to jobs, schools, family, etc.

Luxury second-home owners? Not sticky at all. If holding a $10–20M apartment suddenly costs a lot more every year, they can just sell and park that money somewhere else like Miami, London, Aspen, wherever.

If enough of them head for the exits, you could see prices at the top of the market drop. And if that happens, the city’s existing property tax base drops too… which kind of defeats the purpose.

TL;DR: Great politics, but as a revenue strategy it’s shaky. It targets a group that can actually leave, and the upside ($500M) is small compared to the risk if the high-end market softens.

If you’re into this kind of policy/econ breakdown, I go deeper into it in Red Mayor, Green Money.

Link: https://a.co/d/0bpIC1Us

The New York City fiscal crisis of 1975 didn’t happen overnight—it built up over years of short-term fixes, accounting workarounds, and reliance on one-time budget patches.

By October 1975, the city had ~$453 million in debt coming due and only ~$34 million in cash on hand. Default was avoided at the last possible moment.

Looking at the current NYC budget (April 2026), some comparable patterns are being discussed:

• THE "ONE-SHOT" RELIANCE: The budget is technically “balanced,” but depends on ~$980M from the Rainy Day Fund to cover operating costs.

• BANKING ON UNCERTAINTIES: It assumes ~$1.1B in state funding that has not yet been approved.

• THE STRUCTURAL GAP: A ~$10.4B deficit is projected for next year.

• THE TAX TRIGGER: A ~$3.7B property tax increase (≈9.5%) is being discussed as a fallback.

In the 1970s, pushing costs forward and relying on temporary fixes eventually contributed to a loss of market confidence when lenders pulled back. Today’s environment is different—modern oversight, including the Financial Control Board created in 1975, provides more stability—but the underlying tension between short-term balance and long-term sustainability remains.

At the same time, the city is advancing a ~$33B capital plan while struggling with rising recurring costs like rental assistance, which has grown from roughly $600M to over $2.1B.

A deeper breakdown of how these fiscal patterns develop—and how political incentives shape them—is explored in Red Mayor, Green Money by Stephen J. Darwin:

https://a.co/d/0bpIC1Us

Question for the sub:

Are these comparisons to the 1970s overstated because of modern fiscal controls, or are similar habits quietly re-emerging in a more complex form?

Here are a few things from the latest city audits/budget updates that seem worth paying attention to:

⸻

1. The Fiscal “Cliff” Isn’t Gone — It’s Deferred

   • The FY26 budget is technically “balanced,” but relies on ~$980M from the Rainy Day Fund + ~$1.1B in state actions that haven’t passed yet

   • Without those, the real FY26 gap is closer to $6.25B

   • FY27 gap is projected around $10.4B

   • Budget also assumes ~$3.7B from a property tax increase (which City Council is pushing back on)

👉 Translation: the city is still heavily dependent on one-time fixes and uncertain revenue

⸻

2. DOT: More Highway Repairs, Fewer Local Street Fixes

   • Pothole work orders up ~10%

   • “Pothole Blitz” continues (100k repairs milestone)

   • Highway/arterial repairs up 12%

   • Local street repairs down 7%

DOT is leaning more on patchwork (“spot repairs”) instead of full resurfacing, likely to free up funds for large redesign projects (e.g., Flatbush Ave)

👉 Auditors warn this could increase long-term costs and liability

⸻

3. Congestion Pricing Is Beating Expectations

   • ~$550M net revenue vs $500M target

   • ~27M fewer vehicles (≈11% drop)

   • Avg speeds up ~4% in the zone

   • Holland Tunnel delays reportedly down ~65%

   • Subway ridership up ~90M trips annually

Funds are already being allocated toward major MTA projects (Second Ave Phase 2, signal upgrades, etc.)

⸻

4. CityFHEPS Costs Keep Climbing

   • Originally projected: ~$600M

   • Now: $2.1B+

   • Expansion of eligibility played a major role

   • Comptroller estimates another ~$1B needed in FY26 to sustain it

⸻

Watching this week:

City Council says it has ~$6B in alternatives to avoid the proposed property tax hike. Worth seeing what actually materializes.

⸻

Question:

Do you think the city is managing this responsibly, or just pushing the problem into future budgets?