New York Metropolis Mayor Zohran Mamdani proclaims he’s “pressured to raid the wet day fund, retiree profit belief reserve, and to extend property taxes” so as to maintain 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 a 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 improve to shut a multibillion-dollar deficit. This isn’t an emergency measure. That is the predictable final 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 increase, blame exterior components through the slowdown, after which drain reserves to keep away from instant political penalties. Wet day funds are speculated 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: increased taxes on wealth and firms or shifting the burden via property taxes and reserve withdrawals. You can not constantly develop spending commitments whereas assuming tax revenues will maintain tempo indefinitely. That isn’t how financial cycles work. Capital is very cell, and as taxation rises, the tax base erodes.
Socialistic coverage prioritizes redistribution and authorities enlargement underneath 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 increased property taxes, reserve depletion, and political strain for extra state help. Property taxes rise, companies develop, 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 develop, redistribute, and intervene with out consequence, as if financial cycles now not apply. In the long run, it isn’t markets that fail these techniques, however the coverage perception that authorities management can completely override the enterprise cycle.
