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Ambitious promises to make the city less expensive for residents catapulted progressive candidate the incoming mayor to his surprising victory on Tuesday. Included are free buses, universal childcare, and a massive increase in affordable homes.

However, making the urban center cost-effective for inhabitants is an expensive public undertaking, and many financial experts and elected officials to Mamdani’s right say he confronts numerous obstacles to effectively follow through on his key proposals.

Further complicating the situation is the national government, which will likely pull funding for New York in an attempt to undermine Mamdani and open up funding gaps that make it more difficult to fund fresh initiatives.

Additionally, New York City must get state government approval to adjust several revenue streams. One expert pointed to the state legislature stopping the city from raising dog licensing fees in 2014 due to a disagreement between the incumbent at the time and a state representative.

“A striking way of putting it is New York City cannot increase pet permit charges without state approval, and that held true previously, and it remains the case today,” the expert said.

However, analysts point to tailwinds: Mamdani’s ideas are widely supported and would solve fundamental issues. Democrats now hold significant control in the legislature, and some identify economic and political pathways to making the proposals reality.

In what ways could Mamdani pay for his ambitious agenda? We broke it down by funding method and proposal.

Generating Income

His team projects it could raise about ten billion dollars by raising the business tax, levies on the affluent, and current government revenues.

Detractors claim companies and the high-earners will move away, but this is contradicted by reliable studies. Moreover, the business levy is on profits made in the state regardless of where a company is located, making the point largely moot.

Business Levy Hike

Mamdani calculates a state tax increase from seven point two five percent and 11.5% on business earnings would generate about $5bn, much of which would be funneled to New York City. State leaders would have to approve the plan. Legislative leaders have in the past backed similar proposals, but the state executive opposes raising taxes.

Yet, the governor backs universal childcare, a highly favored proposal because childcare is commonly seen as cost-prohibitive, said one policy director. It would be difficult for centrist lawmakers to “resist enacting a historical program”, he continued. “No one argues ‘Nothing should be done to reduce childcare costs.’”

What’s been lacking, he explained, has been a leader like Mamdani who declares: “Yeah, it requires funding, and we’re gonna increase revenue to get it done.”

Increasing Taxes on the Wealthy

Mamdani’s plan aims to generating $4bn with a 2% hike on those making more than one million dollars each year. Though it’s a municipal levy, the state legislature must approve the increase, and the idea is generally resisted by centrist Democrats.

However there is a political pathway, he said. Raising revenue on the wealthy is broadly popular and, similar to the business tax hike, using the proceeds to fund popular programs makes it easier to sell in the state capital.

Halt on Rent Increases

In terms of expense, a pause on rent hikes on regulated housing is the easiest to implement – it’s nearly free. However, a halt must be authorized by the rent guidelines board, and there might not exist sufficient backing on it until Mamdani fills it with his preferred candidates.

Free and Fast Buses

Mamdani estimates free buses will cost at least seven hundred million dollars, which factors in an fare-dodging percentage of forty-eight percent. Observers suggest Mamdani could likely pay for the cost by streamlining or reducing additional services in the municipal one hundred sixteen billion dollar city budget.

Publicly Run Grocery Stores

A pilot program for five public food markets that would be established in neglected “areas lacking food access” is estimated at sixty million dollars and could also be paid for by shifting focus in the $116bn spending plan.

Building Affordable Housing Properties

Numerous commentators to the conservative side of Mamdani have written off the proposal to invest approximately one hundred billion dollars building two hundred thousand low-income homes over a decade, mainly because it would require massive borrowing. The expert said those arguing against this aspect largely overlook that the initiative is not to borrow $100bn at once – the liability would be accumulated and paid down in phases over multiple administrations.

He also stressed the plan does not call for free housing, but cost-effective residences that would generate revenue to pay down debt. Furthermore, the projects could partially be funded by private investment.

“That’s the way the proposal is feasible,” he said.

Universal Childcare

Establishing childcare access for all would cost from two point five billion dollars and $12bn by most estimates, based on whether it is a municipal or state initiative and additional variables. Funding is the big question mark – will the business and high-earner levies pass the state capital? One analyst commented he expected some compromise, as often happens with big proposals.

“The things that Mamdani promised will probably get a haircut,” he remarked. “And the governor’s expressed resistance to tax increases could face reality – she probably can’t get the objectives she wants on the spending side without compromise on the tax side.”