New York City Mayor Zohran Mamdani has called for tax increases on the city’s wealthiest residents and most profitable corporations, warning that the city is facing a fiscal crisis on a scale greater than the Great Recession.

Speaking on Wednesday, Mamdani said New York is grappling with a budget deficit of at least $12 billion, blaming what he described as years of fiscal mismanagement under former mayor Eric Adams.

“I will be blunt. New York City is facing a serious fiscal crisis,” Mamdani said. “There is a massive fiscal deficit in our city’s budget to the tune of at least $12 billion. We did not arrive at this place by accident.”

Mamdani said the shortfall could not be addressed through spending cuts alone, arguing that efficiency measures would be insufficient to close a gap of this size.

“A $12 billion fiscal deficit cannot be resolved through efficiencies and savings,” he said. “Part of the solution will absolutely be interrogating every dollar the city spends, but that is only one part.”

The mayor said the city must also rethink its fiscal relationship with New York State and increase contributions from the wealthiest residents and corporations.

He argued that previous state-level decisions had shifted an unfair financial burden onto the city, particularly during the tenure of former governor Andrew Cuomo, and said restoring balance would be central to any recovery plan.

Mamdani said the scale of the crisis demands action on multiple fronts, including tax increases.

“We are speaking about a fiscal crisis at a scale greater than the Great Recession,” he said. “There will not be one single thing that can answer that crisis.”

He proposed an additional 2% income tax on the top 1% of New Yorkers, saying the city could both stabilise its finances and improve public services by asking more from those best able to afford it.

“In the wealthiest city, in the wealthiest country in history, we can put our city back on firmer financial footing and build a stronger city for everyone,” he said.

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The comments increase pressure on Governor Kathy Hochul, who must approve any changes to state tax policy. Hochul, who is seeking re-election in November, has repeatedly said she does not support raising taxes.

The growing standoff highlights widening political divisions over how to address New York City’s budget gap, as officials weigh austerity measures against calls for higher taxes on the rich.

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