New York Metropolis Mayor Zohran Mamdani broadcasts he’s “pressured to raid the wet day fund, retiree profit belief reserve, and to extend property taxes” with a view to hold the town on “agency monetary footing”
— America (@america) February 17, 2026
Right here we go once more. A metropolis runs expansive social applications, expands spending, guarantees advantages, after which all of the sudden discovers a “budget crisis” that requires raiding reserves, tapping wet day funds, drawing from retiree trusts, and elevating property taxes to keep up so-called fiscal stability. New York Metropolis’s newest proposal brazenly admits it might withdraw practically $1 billion from its wet day fund, a whole lot of tens of millions from retiree well being profit trusts, and think about a roughly 9.5% property tax enhance to shut a multibillion-dollar deficit. This isn’t an emergency measure. That is the predictable end result of coverage tendencies I’ve repeatedly warned about, significantly in cities dominated by progressive and socialistic fiscal fashions.
I’ve written earlier than about how politicians like Gavin Newsom and different liberal Democrats have additionally tapped wet day funds in periods of financial stress whereas concurrently increasing long-term obligations. The sample is at all times the identical: spend through the growth, blame exterior components through the slowdown, after which drain reserves to keep away from instant political penalties. Wet day funds are alleged to be buffers for recessions or crises, not routine financing instruments to maintain structurally imbalanced budgets. As soon as governments normalize utilizing reserves in periods of progress or gentle deficits, they take away the very cushion wanted when a real financial downturn arrives.
The mayor’s personal price range framework acknowledges a major fiscal hole and presents two paths: larger taxes on wealth and companies or shifting the burden by way of property taxes and reserve withdrawals. You can’t constantly broaden spending commitments whereas assuming tax revenues will hold tempo indefinitely. That’s not how financial cycles work. Capital is extremely cell, and as taxation rises, the tax base erodes.
Socialistic coverage prioritizes redistribution and authorities enlargement beneath the belief that taxation can completely fund rising obligations. In actuality, financial confidence is the important thing driver of income. If insurance policies discourage funding, enterprise enlargement, and high-income residency, the very tax base required to fund social applications begins to contract. Then governments are pressured into the precise state of affairs we’re seeing larger property taxes, reserve depletion, and political stress for extra state help. Property taxes rise, companies broaden, prices escalate, and reserves shrink till a cyclical downturn exposes the imbalance.
Socialistic insurance policies promoted by many progressive and socialist-leaning Democrats relaxation on the belief that authorities can endlessly broaden, redistribute, and intervene with out consequence, as if financial cycles now not apply. Ultimately, it’s not markets that fail these methods, however the coverage perception that authorities management can completely override the enterprise cycle.
