Andrew Ross Sorkin: Welcome back to Squawk Box. I am downtown at City Hall this morning and joining me right now in an exclusive interview is New York City Mayor Zohran Mamdani. We've wanted to talk to you for a very long time about so many different issues going on with the city, but I know that you've been working on the budget, and that is one of your first priorities, and so let's go there.
Mayor Zohran Mamdani: Absolutely
Sorkin: Because I know that this morning, I believe, you're planning to make some announcements about the budget.
Mayor Mamdani: Yes, well, first I want to say it's a real pleasure to be on. And today, you're right, we're going to be sharing the truth with New Yorkers that has sadly been hidden from them for far too long, which is that the prior mayoral administration has left us with a $12 billion fiscal deficit. And this is at a scale that's actually greater than what we saw here in New York City during the Great Recession, and it's something that is attributable to gross fiscal mismanagement, to a refusal to actually budget honestly and be direct with New Yorkers, and that's what we're going to actually do today.
Sorkin: Okay, so the big question is, assuming that that is the hole, how do you fix the hole?
Mayor Mamdani: Well, I think the first way is you actually be honest about it. And the reason that that's important is what we saw in the last year from the mayoral administration was there was a recognition about the scale of this crisis, but instead of actually being direct with New Yorkers, it was trying to shift those costs out of view. We had cash assistance, for example, where we were budgeting only for about 50 percent of its cost on the books, keeping about 50 percent of its cost off the books.
The second thing is about actually making the case for how we fix structural imbalances in this city. We're talking about a $12 billion deficit that is a result of not just the fiscal mismanagement, but also the decades-long effort of then-Governor Cuomo to shift costs from the state to the city. So, we need to change our relationship to the state. We also need to change our relationship to the wealthiest residents and most profitable corporations here in New York City.
Sorkin: Let's speak to that because that's something you run on, raising taxes on the wealthy in New York. How much -
Mayor Mamdani: I know that's very popular on this program.
Sorkin: When you look, though, at the budget and this hole you're talking about, how much do you look at this hole and say, "I can solve this because there are things in here that I can cut - there are zombie programs, other things," and how much do you think it is absolutely necessary for you to raise taxes on the wealthiest?
Mayor Mamdani: I think the scale of this crisis is one where we have to pursue all of these things. I have to show that this city government is not just serious about public goods but also public excellence and public efficiency. And so, we have to make sure every dollar that's being spent is actually being spent in a worthwhile way. I'll give you an example. The previous administration launched an AI chatbot that is basically unusable [and] cost the city close to half a million dollars. That's the kind of money that is going down the drain.
At the same time, 12 billion dollars of a fiscal deficit requires the kind of increased revenue on the top 1 percent of New Yorkers who make a million dollars a year or more, increasing their taxes by 2 percent. It also means that we look at the relationship between the city and the state, where New York City is the economic engine of the state - of the country - and yet while we contribute 54.5 percent of the state's revenue, we only receive 40.5 percent in return. And if we had actually bridged that gap over the Cuomo years, we'd be talking about receiving an eight billion dollars additional every single year.
Sorkin: Do you go after that money first, or do you go after the additional tax dollars on the wealthiest New Yorkers first?
Mayor Mamdani: I think as a New Yorker, you always have to do all of the above. And so, we have to increase taxes on the wealthiest, we have to also change the relationship with the state, and we have to pursue these kinds of savings and efficiencies here in our city.
Sorkin: Speak to this, because one of the biggest issues about taxing the wealthiest New Yorkers is the possibility that they leave New York. So, the top one percent of New Yorkers pay somewhere between 40 and 48 percent of the total revenue for New York City taxes. If a couple hundred of them are mobile and have a private plane and can leave, live in Florida, and come here 150 days a year, that's a problem. What do you do about that?
Mayor Mamdani: I think you get back to first the facts, because capital flight is always spoken about whenever we talk about the potential of increasing taxes on the wealthy. What we've seen is that since 2021, when New York State increased taxes on the wealthiest New Yorkers, the number of millionaires actually increased in the state. And so, it has to be to get back to the facts.
The second thing also has to be, we are increasing revenue also to be able to increase quality of service. We're sitting here right now in one of the coldest stretches in New York City weather history. One of the reasons why the city could start to get back on its feet was because we had a [Department of] Sanitation that was staffed by thousands of people to the extent that we could have 2,500 workers on every 12-hour shift. That's only possible when you're actually investing in public service.
Sorkin: You talk about more millionaires in New York City, and that's true. But at the very tip of the tip of the spear, I'm talking maybe even the billionaires, their ability to be mobile seems higher. And so the question is - you look at a state like New Jersey, David Tepper was a hedge fund manager in New Jersey who left the state. All of a sudden, they lost something like $140 million in revenue annually. And so, the question is, if you lose a couple of those people, is that in your mind okay? Is that a cost of doing business, or is that a problem? And what do you do about that?
Mayor Mamdani: Well, I think I have to prove that this increased revenue leads to an increased quality of life. And frankly, we also have to get through the kind of fear-mongering that typically takes place in this. The other day, I was speaking to a New Yorker who self-identified themself as someone who would be taxed by our proposals. They said, "I've heard that you're going to tax millionaires. Is that true?"
I said, "Yeah, that's what we want to do. We want to increase personal income taxes by two percent." They said, "I'm going to leave," like you're saying. I said, "I don't think you will." They said, "Why?" I said, "Because it's a two percent increase. We're talking about $20,000 on an income of a million dollars." They said, "That's actually much less than I thought it would be. I wouldn't actually be making a financial decision on the basis of that kind of an increase."
Sorkin: I've got a philosophical question for you.
Mayor Mamdani: Come on hit me.
Sorkin: If you look at the top marginal tax rate for somebody who lives in New York City, this is somebody at the tip of the tip right now, you could be paying somewhere around 52, 53 percent. Is there an invisible line in your mind where you say, actually, that the average New Yorker - not even average New Yorker - but the wealthy New Yorker says, "No mas. This is just - there's a number, I'm happy to give 50 percent of my income over annually, but after this, it's just, it's just too much."
Mayor Mamdani: I really think the invisible line comes from whether working people can afford to live in the city. And what I mean by that is, for all of the talk about capital flight, the potential of it, we lose sight of the fact that there is an exodus of people from the city. It's working people. We're talking about so many who are leaving because of housing costs, childcare costs. And also, we tend to talk about this as if it's a conversation about a collective versus capital.
But even when I sit down with business leaders, I ask them, "What are some of your greatest retention issues?" They'll tell me [it's] childcare. They'll tell me that when their business invests in childcare, in the business setting, they see their retention rates increase. And part of the reason they have to invest is because the city has refused to acknowledge its own responsibility in this.
Sorkin: Well, I think the question is, can you do it without increasing taxes? I mean, you know, de Blasio ran on increasing wealth taxes and got pre-K through without an additional tax rate.
Mayor Mamdani: I think that we've shown that we are advancing universal childcare. We're doing it with existing state revenue, and that was on day eight of our administration. However, we're also inheriting the largest fiscal crisis that we've seen since the Great Recession. And I think that here in the most expensive city in the United States of America, also the wealthiest city, we have one in four people living in poverty.
And I think the last point I'd make, kind of more at the philosophical level as well, is that everyone benefits from a stronger city. And what I mean by that is that, though you may not think that the programs we're speaking about might directly benefit you, the benefit it has to the strength of this society is one that is immeasurable, just in terms of peace of mind and kind of -
Sorkin: I don't think people disagree with that. Business leaders don't disagree with that. I think the question is, how do you make this a super attractive place to do business? And so, I wanted to ask you about this, which is part of the issue is about, people talk about the flight, the exodus. The other piece is the incentive to come to the city, to start a new business in the city.
JPMorgan just built a big building on Park Avenue. It's very hard for them to go. They're locked in place. But for a lot of their other business, for example, they're moving to Texas, they're moving to Florida. And so, the thought isn't necessarily, do they leave, so much as do they come.
Mayor Mamdani: And I think that to me is, the health and vitality of the city is not by protecting what it has, but continuing to grow. And for too long in our politics, there's been this kind of reverse New York exceptionalism, where we say things that worked elsewhere could never work here. We're New York, we're always going to be great.
We have to earn that greatness every day. And so, part of my point here is that I want us to be delivering the best public services this country has ever seen. I want us to have a public transit system that is so good that no matter how much money is in your pocket, you say, "Quickest, best, easiest way to get around, I'm going to get on the train, I'm going to ride the bus." That is something that can be transformative. It's only possible, however, if we reckon with these structural issues.
Sorkin: Let me ask you about this. President Trump says that he is worried about an exodus as well. He told a radio show this week, "I got along very well with him" - that's you - says you have a very good personality, by the way. "I want to see New York be successful. And if he could make it successful, make it much more successful, because now it's heading in the wrong direction, losing people. You saw, I said, the New York Stock Exchange having a major stock exchange built in Dallas is not a good thing." How do you react to that?
Mayor Mamdani: Well, look, I think the president and I had a productive meeting at the Oval Office. And after that meeting, he said, when New York does better, he's happier. I think that for everything that we have firm and fundamental disagreements about, we are also two New Yorkers who care deeply about this city. And I would agree that this is a city that has become so expensive that so many are being pushed out of it.
And I think even when we talk about the cost of childcare, it's $25,000 a year, and that's considered a good deal in New York City. You could be earning two, $300,000 a year. That cost could still push you out of the city. And so, I do think we need to take this affordability crisis seriously. I also think we have to pierce through the fiction and get to the fact of what's actually happening.
Sorkin: We're talking a lot about wealth taxes. We're not really talking about corporate taxes, which actually also have a big impact, not just on big corporations, even though they're called corporate taxes, but on small businesses and bodegas and the like. And the question I have for you is, I know you want to raise corporate taxes and you want to make that, you know, what you say is similar to New Jersey, but at the same time, by default, that is going to have a demonstrable impact on those corporations to employ people.
Mayor Mamdani: So, the corporate tax that I've been speaking about is the highest echelon of profitability. We're not talking about the bodega where you're getting your egg and cheese and jalapeño on a roll. We're talking about corporations that are making an immense amount of profit. And what this is about is redirecting to ensure that that profit is also something that helps the city remain strong, that helps the city also get back on a firm financial footing. Because right now what we're seeing is there's an immense amount of money being made in the city, but that prosperity is not reaching enough New Yorkers' lives.
Sorkin: One of the big issues nationally is the question of ICE, what we've all seen happen in Minneapolis. But there's a big question about whether ICE is going to come to New York. And I'm curious about what kind of conversations you've been having with the president or the administration about that possibility and how you think you would be reacting to this.
Mayor Mamdani: You know, I said to the president directly that these ICE raids are cruel and inhumane and that they do nothing to actually serve the interests of public safety. And that public safety is of paramount importance to us. It's the cornerstone of an affordability agenda. But to use it as a justification to pull people out of their cars, out of their homes, out of their lives, it is completely contradictory to what New Yorkers are seeing and what Americans are seeing.
And I think what we've seen is that there is a fear that has gripped hold of so many. And this is a fear that is without respect to anyone's documentation. A friend of mine the other day told me that if ICE was to come here at the kind of presence that we're seeing elsewhere, they wouldn't feel comfortable with their mother, a U.S. citizen, leaving the house, because they wouldn't know if she would be profiled. That's how people are living right now.
Sorkin: Do you think ICE is coming to New York City?
Mayor Mamdani: We're going to do everything in our power to ensure that we don't see it elsewhere.
Sorkin: What does that mean?
Mayor Mamdani: We keep making the case directly, directly to the president, directly to New Yorkers, to Americans, that these kinds of actions, they are the actions of a reckless agency that is operating with impunity, one that deserves to be abolished, frankly, and that they do nothing to actually serve public interest. The other thing I'd say is you have to prepare in advance, in the same way that with this snowstorm, the reason we're able to actually respond to it on the day of the storm is not because Sanitation's there on the morning of, it's because Friday morning they've brined all the highways and major roadways. Similarly, if we're talking about the prospect of ICE coming here, we have to ensure New Yorkers actually know their rights. New Yorkers know what it means to be a sanctuary city, that we have a law department that's ready to use the courts as one form of the battleground. That's what we're also preparing for.
Sorkin: Now that you're the mayor, how has your relationship changed with the business community? And how do you feel about billionaires today who are now your constituents who you represent? Because you've talked about them in ways that frankly a lot of them don't like. And I'm curious if you think that being in the seat today changes your view in any way or changes your disposition about how to approach this.
Mayor Mamdani: Well, I think being the mayor of this city is to be the mayor of all eight and a half million people of this city. And I've made very clear to members of the business community that my definition of success is not that anyone leaves this city. It's not that there's some kind of a win in a narrative war. It's that everyone stays and that we have more room for others to join as well. And I think there was this moment I was speaking with a real estate leader and he was kind of portioning out where the profits of his company come from.
He pointed back to his office, he said, "About 20 percent of what we make comes from what we do in the office." And then he pointed outside the window and he said, "And about 40 percent comes from what you do out there." So, he said, "You know, whether I like you or not, our fates are intertwined." And I think no matter the scale of policy disagreement, what brings us together is a love of this city. That's what we're going to pursue with these policies.
Sorkin: Mr. Mayor, thank you for being on the broadcast.
Mayor Mamdani: Real pleasure.
