New York City recently published the Comptroller’s monthly “By the Numbers” report that confirmed that YoYtax revenue collections for FY25 increased by $6.1B (+8.3%) to $80.3B. Property taxes (43% of total revenue) rose 5.4% YoY, while non-property taxes surged by a combined 10.6%, led by Personal Income Taxes (PIT) and Pass-Through Entity Taxes (PTET) at +17.7% YoY. Revenues outpaced estimates by 4.2%. FY26 revenue estimates remain conservative at $81.3B, which implies a 1.2% YoY increase.
The FY26 executive budget is balanced, and while there are outyear budget gaps, the city has a history of planning for outyear budget gaps and has demonstrated strength and resiliency in managing through difficult times. New York City ended FY24 with reserves of $11.4B, a healthy 10.1% of expenditures.
Notably, New York City’s office market is enjoying a significant rebound. According to CBRE, 23.2 million square feet was leased over the first 9 months of 2025, the largest amount in 19 years. Manhattan’s in-office attendance in July was 1.3% higher than in July 2019, in stark contrast to a national rate that remains 22% below 2019 levels (WSJ). New York City’s office market still lags 2019 levels with a 14.8% vacancy rate, as compared to 8.2% in 4Q19. However, many of the vacancies are in older, largely obsolete buildings, and there has been intense demand for top-tier buildings.
How Might the City Be Impacted By the Zohran Mamdani Mayoral Election Win?
Mamdani ran for Mayor as a Democratic Socialist with a focus on affordability, rent freezes, city owned grocery stores, and free bus rides. Mamdani has stated that he wants to generate $9B in new revenue by raising taxes on New York City’s wealthiest residents and businesses. Any new taxes must receive approval from the state legislature, and Gov. Kathy Hochul has said she does not want to increase taxes, as doing so could drive residents out of New York.
Mamdani’s Ambitious Proposals Have Raised Budgetary Concerns
A core element of his agenda involves imposing a 2% tax on incomes above $1M, which is projected to produce $4B of tax revenue.
Mamdani has also called for an increase in the corporate tax rate to 11.5% to match New Jersey’s rate, a proposal that could generate about $5B annually. His policy blueprint is expected to produce $1B in savings through an overhaul of city contracts as well as auditing city taxpayers and collecting fines.
Other elements of his plan include free childcare, an entitlement that would cost an estimated $6B annually. Gov. Hochul agrees that childcare should be free but does not support raising taxes to pay for it.
Free bus transportation would cost roughly $800M annually and is primarily aimed at benefiting riders and speeding up travel times. The MTA reported that during a trial, ridership increased, while travel times slowed.
A rent freeze represents another Mamdani priority. The proposal would pause rent increases for four years on rent stabilized apartments. It should be noted that the Mayor does not have the ability to unilaterally freeze rents, as the New York City Rent Guidelines Board, whose members are appointed by the Mayor, sets rates. However, Mamdani could push to elect board members willing to accept a rent freeze. Lastly, an increase in the minimum wage to $30/hour by 2030 from $16.5/hour has also been pushed by Mamdani’s campaign.
Mamdani plans to raise $70B in the municipal market to deliver 200k units of affordable rentals over the next ten years. The city debt limit used to execute capital plans is set by the State Constitution. The limit in 2025 was $136.8B. Therefore, Mamdani cannot materially impact debt levels.
Constraints On Mayoral Authority Are Expected To Limit Fiscal Implications
It is important to note that the New York City government has several branches and layers that introduce checks and balances on legislation and other management decisions that impact the economy. These governing bodies limit any one branch from having complete control and authority over legislative changes and other decisions. Due to New York City’s strong governance system, we do not believe there will be immediate material changes to the budget or the economy with Mamdani’s win.
President Trump has threatened to withhold funding from New York City with Mamdani elected. However, Federal courts have consistently blocked attempts to cut funding based on political disagreements.
Sources: Bank of America, WSJ, Office of the New York City Comptroller, CBRE, JPM
Our sales and marketing team is always available to support financial advisors and their clients. Please reach out if we can help. 1-617-303-0754 | [email protected]
This commentary reflects the opinions of Appleton Partners based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation. Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss to the investor. While the Adviser believes the outside data sources cited to be credible, it has not independently verified the correctness of any of their inputs or calculations and, therefore, does not warranty the accuracy of any third-party sources or information. Specific securities identified and described may or may not be held in portfolios managed by the Adviser and do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed are, were or will be profitable. Any securities identified were selected for illustrative purposes only, as a vehicle for demonstrating investment analysis and decision making. Investment process, strategies, philosophies, allocations, performance composition, target characteristics and other parameters are current as of the date indicated and are subject to change without prior notice. Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen, or experience.
"Mirroring the resilient national economy, State tax revenues have followed a relatively positive trend, particularly after a short-lived decline in late 2023 through early 2024. The trailing-twelve-month growth rate of +2.4% as of August 2025 is not remarkable, but more than strong enough to support essential budgetary needs..."
"At Appleton, we view curve steepness as an opportunity to potentially rotate out of shorter-dated bonds and reinvest the proceeds further out on the curve, but still within our target maturity ranges. This can generate greater income for clients. The return of relative steepness to the intermediate portion of the municipal curve is a welcome development, as it affords investors willing to accept a moderate amount of interest rate exposure with an opportunity to pick up substantially greater tax-advantaged income."
"Uncertainty is the norm in the capital markets, yet municipal bond investors have recently been forced to grapple with unusually high levels. Record YTD net issuance, rate volatility, monetary policy questions, and Fed leadership speculation have all led to increasingly unsettled markets. But with this uncertainty comes opportunity, and for those seeking tax-advantaged income, high-quality municipal bonds currently offer attractive yields at compelling valuations along with sound credit fundamentals..."
Economic & Market Commentary
11.12.2025
Potential Fiscal Implications of New York City’s Election
Revenue Trends Have Been Favorable
New York City recently published the Comptroller’s monthly “By the Numbers” report that confirmed that YoY tax revenue collections for FY25 increased by $6.1B (+8.3%) to $80.3B. Property taxes (43% of total revenue) rose 5.4% YoY, while non-property taxes surged by a combined 10.6%, led by Personal Income Taxes (PIT) and Pass-Through Entity Taxes (PTET) at +17.7% YoY. Revenues outpaced estimates by 4.2%. FY26 revenue estimates remain conservative at $81.3B, which implies a 1.2% YoY increase.
The FY26 executive budget is balanced, and while there are outyear budget gaps, the city has a history of planning for outyear budget gaps and has demonstrated strength and resiliency in managing through difficult times. New York City ended FY24 with reserves of $11.4B, a healthy 10.1% of expenditures.
Notably, New York City’s office market is enjoying a significant rebound. According to CBRE, 23.2 million square feet was leased over the first 9 months of 2025, the largest amount in 19 years. Manhattan’s in-office attendance in July was 1.3% higher than in July 2019, in stark contrast to a national rate that remains 22% below 2019 levels (WSJ). New York City’s office market still lags 2019 levels with a 14.8% vacancy rate, as compared to 8.2% in 4Q19. However, many of the vacancies are in older, largely obsolete buildings, and there has been intense demand for top-tier buildings.
How Might the City Be Impacted By the Zohran Mamdani Mayoral Election Win?
Mamdani ran for Mayor as a Democratic Socialist with a focus on affordability, rent freezes, city owned grocery stores, and free bus rides. Mamdani has stated that he wants to generate $9B in new revenue by raising taxes on New York City’s wealthiest residents and businesses. Any new taxes must receive approval from the state legislature, and Gov. Kathy Hochul has said she does not want to increase taxes, as doing so could drive residents out of New York.
Mamdani’s Ambitious Proposals Have Raised Budgetary Concerns
A core element of his agenda involves imposing a 2% tax on incomes above $1M, which is projected to produce $4B of tax revenue.
Mamdani has also called for an increase in the corporate tax rate to 11.5% to match New Jersey’s rate, a proposal that could generate about $5B annually. His policy blueprint is expected to produce $1B in savings through an overhaul of city contracts as well as auditing city taxpayers and collecting fines.
Other elements of his plan include free childcare, an entitlement that would cost an estimated $6B annually. Gov. Hochul agrees that childcare should be free but does not support raising taxes to pay for it.
Free bus transportation would cost roughly $800M annually and is primarily aimed at benefiting riders and speeding up travel times. The MTA reported that during a trial, ridership increased, while travel times slowed.
A rent freeze represents another Mamdani priority. The proposal would pause rent increases for four years on rent stabilized apartments. It should be noted that the Mayor does not have the ability to unilaterally freeze rents, as the New York City Rent Guidelines Board, whose members are appointed by the Mayor, sets rates. However, Mamdani could push to elect board members willing to accept a rent freeze. Lastly, an increase in the minimum wage to $30/hour by 2030 from $16.5/hour has also been pushed by Mamdani’s campaign.
Mamdani plans to raise $70B in the municipal market to deliver 200k units of affordable rentals over the next ten years. The city debt limit used to execute capital plans is set by the State Constitution. The limit in 2025 was $136.8B. Therefore, Mamdani cannot materially impact debt levels.
Constraints On Mayoral Authority Are Expected To Limit Fiscal Implications
It is important to note that the New York City government has several branches and layers that introduce checks and balances on legislation and other management decisions that impact the economy. These governing bodies limit any one branch from having complete control and authority over legislative changes and other decisions. Due to New York City’s strong governance system, we do not believe there will be immediate material changes to the budget or the economy with Mamdani’s win.
President Trump has threatened to withhold funding from New York City with Mamdani elected. However, Federal courts have consistently blocked attempts to cut funding based on political disagreements.
Sources: Bank of America, WSJ, Office of the New York City Comptroller, CBRE, JPM
Our sales and marketing team is always available to support financial advisors and their clients.
Please reach out if we can help.
1-617-303-0754 | [email protected]
This commentary reflects the opinions of Appleton Partners based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation. Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss to the investor. While the Adviser believes the outside data sources cited to be credible, it has not independently verified the correctness of any of their inputs or calculations and, therefore, does not warranty the accuracy of any third-party sources or information. Specific securities identified and described may or may not be held in portfolios managed by the Adviser and do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed are, were or will be profitable. Any securities identified were selected for illustrative purposes only, as a vehicle for demonstrating investment analysis and decision making. Investment process, strategies, philosophies, allocations, performance composition, target characteristics and other parameters are current as of the date indicated and are subject to change without prior notice. Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen, or experience.
State Revenues and Municipal Credit Quality Are Holding Up Well
A Closer Look at Municipal Curve Steepness & Why it Matters
Don’t Forget About Municipals: