New York’s Taxes Are Already the Highest in the Country. Mamdani’s Own School Budget Shows There’s an Easier Way to Find the Money.
Two pieces ran side by side in the New York Post on July 20, 2026, and together they describe the same fiscal box Mayor Zohran Mamdani (D) is standing in. One, by Manhattan Institute fellow Jennifer Weber, lays out a concrete, unglamorous fix for the Department of Education’s ballooning budget: make the DOE follow the same competitive-bidding rule every other New York school district already follows. The other explains why that fix matters more than it should — New York’s combined state-and-city income tax rate is already the highest in the nation, and the state just watched its share of the country’s millionaires keep shrinking.
The two stories are not a coincidence of publication timing. Mamdani campaigned on a 2-percentage-point income surcharge on New York City’s highest earners to help close his budget gap. Gov. Kathy Hochul (D-NY) would not give it to him. What she approved instead — the state’s first pied-à-terre tax — raises a fraction of what the surcharge would have. That leaves spending discipline as one of the only levers Mamdani has left that does not require Albany’s permission or risk pushing more high earners out the door.
Instead, the DOE’s adopted FY2027 budget grew to $38,600,000,000 — almost $4 billion more than last year, despite an enrollment decline the budget doesn’t reflect. The fix Weber describes is sitting in plain view. Nobody with the authority to make it has picked it up.
- $38,600,000,000 — adopted NYC Dept. of Education FY2027 budget — almost $4 billion more than last year, despite falling enrollment — NYC budget documents
- $1M vs. $20,000 — the DOE's own threshold for competitive-bid review vs. the amount every other New York school district must competitively bid above — Manhattan Institute / City Journal
- 8.7% — New York's share of the nation's millionaires in 2022, down from 12.7% in 2010 — the sharpest decline of any state — Citizens Budget Commission
- $10.7B — personal income tax revenue New York would have collected in 2022 alone had it kept its 2010 millionaire share — Citizens Budget Commission
- 14.776% — New York's combined state-and-city top marginal income tax rate today — already the highest in the country, before Mamdani's proposed 2-point surcharge
Mamdani proposed a $38 billion Department of Education budget for the fiscal year that began July 1, 2026. By the time City Council Speaker Julie Menin (D) and the mayor shook hands on the final number June 29–30, it had grown to $38,600,000,000 — $680 million more than his own proposal, and almost $4 billion above the prior fiscal year. City documents show roughly $400 million of that addition went to hold school budgets flat in buildings with declining enrollment, about $100 million covered school-cleaning costs left out of the executive budget, and $42 million came from Council-added social-emotional and arts programs. The city’s 780,000 enrolled students now cost roughly $49,500 per pupil.
Citizens Budget Commission President Andrew Rein put the enrollment problem plainly: “Not only is budgeting to pay for students that don’t exist unfair, it means you miss the opportunity to spend those dollars on programs to help New Yorkers.” Mamdani had pledged before taking office to get DOE contract spending under control. The adopted budget moves in the opposite direction.
Vendor contracts make up $13 billion of the DOE budget — about a third of the total, up $1.4 billion from the prior year — and only roughly a third of that money goes through open, competitive bidding. The reason, per Weber’s reporting: New York State law requires every other school district to competitively bid contracts over $20,000. The DOE’s own oversight body reviews only contracts exceeding $1 million. Lowering that threshold to match state law is the “easy way” her Post piece describes — it requires no new legislation, no Albany sign-off, and no tax increase. It requires the DOE to stop exempting itself from a rule every other district follows.
The DOE’s central office is roughly the same size it was 15 years ago, despite serving about 150,000 fewer students. And the budget’s $149 million in claimed savings from “Carter case” reform — reimbursements to families who place disabled children in private school — looks similarly soft: spending on those cases has grown from $47 million in 2005 to roughly $1.4 billion now, at an average settlement above $101,000 per student, and Mamdani has implemented neither of the two levers that actually bend that curve — building out public special-education capacity or contesting placements more aggressively. New York City accounts for 98% of the state’s special-education due-process filings while enrolling just 36% of its students.
Menin has been trying to get the underlying contract data since spring. On July 9 she wrote to Schools Chancellor Kamar Samuels (Mamdani-appointed) accusing the DOE of “opacity, slow-walking, and delay,” demanding a production schedule by July 16 for 579 contracts covering mandated services and no-bid procurement. The DOE said pulling records from a “secure system very few people have access to” would take months; Menin said it should take about an hour. Mamdani told reporters July 14 the Council would have the contracts “in the coming weeks.”
Mamdani quietly adds $700M to NYC public schools' already bloated budget
New York’s combined state-and-city top marginal income tax rate is 14.776% — already the highest in the nation, and roughly 51.8% once the federal top rate is stacked on top of it. Mamdani’s proposed 2-point millionaire surcharge would push the combined state-city rate to 16.8% — well past the 15.35% combined state-city high-water mark New York briefly touched with an income surcharge in the early 1970s. Hochul held the line and did not give it to him.
The Citizens Budget Commission’s July 2026 “Competitive NYS” analysis found New York’s share of the nation’s millionaires fell from 12.7% in 2010 to 8.7% in 2022 — the largest decline of any state. Had New York kept its 2010 share, the Commission estimates the state would have collected $10.7 billion more in personal income tax in 2022 alone (reported elsewhere as “nearly $11 billion”). The top 1% of New York earners already pay roughly 46% of all state income taxes, and just 3,172 residents earning above $10 million account for 19% of the state’s pre-credit tax liability — meaning the departure of only 320 such households would cost the state nearly $1 billion. The number of New York filers earning above $10 million has fallen 31% relative to the national total since 2015.
It isn’t only millionaires. NYS Comptroller Thomas DiNapoli’s 2024 migration data show a net loss of 13,662 tax filers statewide that year alone — part of a cumulative net outmigration of roughly 351,000 filers since 2015. Earners above $500,000 left at the highest rate of any income bracket — about 1% of them in 2024 — and married filers earning $100,000–$500,000 accounted for more than half of the year’s total net loss. New York’s per-capita state and local tax collections, at $12,495, run 78% above the national average.
Competitiveness is already slipping. NY's shrinking share of millionaires cost NYS and NYC ~$13B in lost income tax revenue in 2022—warning sign for the long-term tax base.
The one tax increase that did pass Albany this year is narrow by design: a pied-à-terre surcharge on roughly 13,000 non-primary residences valued above $5 million, projected to raise about $500 million a year. Mamdani’s broader ask — the 2-point millionaire income surcharge that could have covered a meaningful share of the DOE’s growth — never got Hochul’s sign-off.
When Fox 5’s Rosanna Scotto pressed Hochul on the Citizens Budget Commission’s millionaire-exodus numbers in mid-July, the governor didn’t point to her own tax code. She pointed to Washington and to the pandemic.
“All of a sudden, everybody in New York paid higher taxes because we used to, since Abraham Lincoln was president, they started the tax code. You never were double taxed. They changed that, so states like New York, you lost that deduction.”
Gov. Kathy Hochul (D-NY) · Fox 5's Good Day New York · mid-July 2026 · on the 2017 federal SALT deduction cap
Hochul added that she believes “we should not be raising taxes on high-net-worth individuals” — a position that stops short of proposing to lower the rate that already sits at the top of the national rankings. President Trump (R) had reacted to the pied-à-terre tax announcement back in April with a sharper diagnosis of the same trend.
Sadly, Mayor Mamdani is DESTROYING New York! It has no chance! The United States of America should not contribute to its failure. The TAX, TAX, TAX Policies are SO WRONG.
Posted the day of the pied-à-terre tax announcement — corroborated verbatim across NBC New York, The Hill, CBS New York, and the Washington Times.
Run the two threads forward and they reinforce each other. If the DOE keeps its $1 million bidding-review threshold instead of the state’s $20,000 standard, the two-thirds of its $13 billion vendor spend that skips competitive bidding keeps growing every year enrollment falls — and the “easy” fix stays exactly that easy, and exactly undone. If New York’s tax base keeps shrinking at its current rate, the officials who need new revenue will keep reaching for a tax code already 78% above the national average per capita, on a taxpayer base where 320 departing households can erase $1 billion. Each problem makes the other harder to solve: a thinner tax base is exactly why City Hall can’t just raise rates to cover a bloated schools budget, and a bloated schools budget is exactly the kind of unforced spending that gives high earners one more reason to leave.
Mayor Zohran Mamdani (D) — proposed a $38 billion DOE budget and a 2-point millionaire income surcharge; got neither the surcharge nor a smaller DOE budget from Albany or the Council.
Gov. Kathy Hochul (D-NY) — blocked the millionaire surcharge, approved only the narrower pied-à-terre tax; blamed the 2017 federal SALT cap and COVID-19 when confronted on the state’s shrinking millionaire share.
City Council Speaker Julie Menin (D) — negotiated the $38.6 billion adopted DOE budget; separately accused the DOE of “opacity, slow-walking, and delay” over 579 withheld contracts.
Schools Chancellor Kamar Samuels (Mamdani-appointed) — runs the DOE; has not lowered its $1 million bid-review threshold or delivered the withheld contracts as of publication.
Citizens Budget Commission President Andrew Rein — flagged the DOE’s enrollment-blind budgeting; CBC’s analysis is the source of the millionaire-flight figures.
Manhattan Institute fellow Jennifer Weber — identified the $20,000-vs-$1 million bidding gap as the concrete, achievable DOE fix.
President Trump (R) — called the pied-à-terre tax and Mamdani’s broader tax agenda a threat to New York’s competitiveness.
New York’s combined 14.776% top tax rate is already the highest in the country, its millionaire share has fallen further than any other state’s, and Albany just said no to the one tax hike that might have offset a DOE budget that grew to $38.6 billion anyway. The fix that’s left doesn’t require a single new dollar of taxes — just making the Department of Education competitively bid contracts over $20,000, the same rule every other New York school district already follows. Nobody with the authority to flip that switch has flipped it yet.
