Over one million New Yorkers participated in the Democratic primary in June 2025. Zohran Mamdani, a young State assembly member advocating democratic socialism, secured the Democratic Party nomination with 56% of the votes in an unexpected victory. Mamdani's platform, which includes universal childcare, $70 billion in debt to fund affordable housing, free bus service, a $30 minimum wage, subsidized grocery stores, and rent freezes for rent-stabilized tenants, is prompting many to wonder about the implications for the city’s finances if he wins the election in November.

The Path from Nomination to Policy Implementation is Not Guaranteed, Neither is the Election

Checks and Balances: The mayor does not have sole authority to increase corporate or personal income taxes, the revenue streams Mamdani has identified as funding sources for his initiatives. They require approval from multiple levels of government, including city council, state legislature, and the governor. Governor Hochul has already indicated that she would not support such increases due to concerns about potential population loss and business outmigration. Additionally, the city council and New York City’s comptroller also provide independent checks and oversight on the mayor's budget and financial decisions, making it unlikely for Mamdani to have carte blanche.

Implementation Challenges: Unlike the federal government, NYC is required to balance its budget each year, meaning projected expenses cannot exceed projected revenues. As most of Mamdani’s proposals entail increased spending, the city must identify offsetting revenue or spending cuts. Both will be challenging due to growing tax fatigue, the ongoing risk of federal funding cuts, and existing spending priorities. His debt issuance plans would be constrained by the State’s constitution, which limits New York City’s leverage.

Election Dynamics: Only 30% of registered Democrats voted in the primary, leaving 81% of NYC voters unheard, as Republicans, Independents, and unaffiliated voters were not eligible to participate. While the Democratic candidate is generally considered to have an important advantage, nomination does not guarantee election. In the last 25 years, the Democratic candidate has lost five of the eight mayoral elections. We expect a tight race in a crowded field with Mamdani, Curtis Sliwa (the Republican candidate), former governor Andrew Cuomo, and current mayor Eric Adams, although the latter have the potential to split the moderate voter base.

New York City’s Credit Quality Can Withstand a Range of Economic and Political Outcomes

The city made it through the major crises of the last two decades, namely the COVID-19 pandemic and the Global Financial Crisis (GFC), with no more than a one-notch downgrade. Its resilience is attributable to several factors, outlined below, which will continue to support its credit quality.

• Exceptional economy. The City’s economy accounts for nearly three quarters of the state’s GDP and is the largest regional economy in the nation. It has the capacity to support City operations but also gives the city leverage to obtain support from the State in times of need.
• History of state support. In 1975 during the city’s fiscal crisis, the state created the Municipal Assistance Corporation (MAC) to provide the city with financial oversight and stabilize its finances. More recently, when the city experienced an influx of immigrants seeking asylum, the state provided $3 billion of funding to help offset costs.
• Diverse revenue base. The city derives its revenues from a mix of property taxes, income taxes, and sales taxes. This diversity serves as a natural hedge.
• Healthy financial position. Reserves also serve as a buffer and are at record highs ($8.5 billion).
• Strong governance. Fiscal management is institutionalized, transparent, and allows for real time adjustments, a positive outcome of the 1970s fiscal crisis. The city publishes a four-year financial plan, which it updates three times a year, a 10-year capital strategy, and quarterly cash reports.
• Prudent fiscal management. The city has a history of outperforming budgets and has consistently made the necessary adjustments to ensure balance. Consider the migrant crisis that began in fiscal year 2023 and has an estimated price tag of $5 billion: despite the outsized costs, the city generated surpluses in fiscal years 2023 and 2024, with another expected for 2025.
• Moderate leverage. The debt burden is manageable, and pensions are well funded.

While Mamdani's primary victory took many by surprise, the mayoral race is just beginning. Regardless of the outcome, the abovementioned credit strengths will continue to support its credit quality.