New Yorkers will vote in four truly contested Democratic primaries on Tuesday, an exciting election day in a city that’s usually dominated by incumbents.

Unfortunately, this isn’t a sign of a vibrant new reform movement. It’s more like the political trend that the Republican pollster Patrick Ruffini illustrates in the chart below:

We have entered the “progressive drift” era of New York City politics, which may be supercharged by Mamdani’s political clout: the two most striking races pit established left-wing Democrats against a new crop of Mamdani-backed loyalists grown in Democratic Socialists of America labs.

In the DSA heartland of Queens, Polymarket gives Mamdani’s candidate, Assemblymember Claire Valdez, an 83% chance of winning against the hyper-progressive Brooklyn Borough President Antonio Reynoso in NY7; in Upper Manhattan, Darializa Avila Chevalier is narrowly favored against the longtime incumbent, Rep. Adriano Espaillat in NY13. Meanwhile, Mamdani’s old rival turned ally, Brad Lander, is heavily favored against Rep. Dan Goldman in NY10, a district that includes Park Slope. In all three races, Mamdani’s candidates have gotten to the rivals’ left with criticism of Israel.

Mamdani is flexing his muscle in districts he won easily in last summer’s primary. If his candidates, and particularly the previously unknown Avila Chevalier and Valdez, both members of the DSA, win, the results won’t immediately change New York City policy. They’ll be backbenchers in Washington.

But their victories would shake up New York’s power structure. The lesson will be that Mamdani and the DSA can make or break your career — and that you’d better fall in line with the organization’s extreme left priorities broadly, and its hostility for Israel in particular, if you want a political future in New York Democratic politics.

“People often ask me what I think of the state of the Democratic Party. This slate here today is our answer. The Democratic Party must change,” Mamdani said while speaking at a rally for his slate of endorsees last night in Brooklyn.

One discordant note: The 4,000-seat theater was not packed, by some accounts, and early voting does not indicate a massive turnout by Mamdani’s young base. That’s New York too: with the World Cup and the Knicks, there are so many fun things to do in the city right now. Who wants to think about voting?

Making Frenemies

“It is a general rule of politics that newly elected leaders have only a limited amount of political capital and must be careful how they spend it. Mamdani is trying to use his to expand the role and power of the DSA in Democratic Party politics, even if it upsets putative allies,” David Freedlander writes in the New York Magazine. “It’s a gamble. Win and it cements the mayor as a national political figure heading into the 2028 presidential election. Lose and he has created a squadron of lawmakers with bruised feelings who will be looking for revenge.”

I’d edit that slightly: Win or lose, Mamdani is destroying the old machine to replace it with his own, creating deep resentment within the Democratic establishment.

But that’s the cost of a local political revolution. Mamdani and the DSA are on a mission to radically reshape that rather calcified and visionless Democratic Party from within and are flexing their young political muscle, which is impossible without damage. They have both a strong socialist vision and the momentum, and have fully embraced the Trump strategy of dominating the news cycle. But the city has not been progressive for that long, and Mamdani would do well to remember he won with just 52% of the vote.

Related:

• The Congressional Primary Tearing the Mamdani Coalition in Two (NYT)

• DSA vs. WFP: Who leads the left in NYC? (Michael Lange)

• The Democratic Socialists of America are leaving it all on the field in NYC (Politico)

• Embrace Left Wing Machine Politics (Hamilton Nolan)

Radically American

MI’s President Reihan Salam has an interesting take in Sapir on the parallels between some American Muslims’ move to the left and that of American Jews a hundred years ago. The driving force, he argues, isn’t political Islam but the global left-wing, anti-imperialist worldview called “Third Worldism.”

“Third Worldism is proving as seductive to today’s second-generation American Muslim radicals as socialism, Communism, and anarchism were to the second-generation Jewish radicals of the 1920s and 1930s. The parallel is closer than it might appear. Like today’s Third Worldists, the Jewish radicals of that era were largely secular. Their radicalism was a substitute identity rather than an extension of religious practice, a way of channeling communal energy into political commitment,” he writes. “Like Third Worldism, the Jewish radical movements of the early- and mid-20th century were not marginal phenomena; they shaped American intellectual and political life in ways that took decades to work through.”

DSA Mayors

“[T]he DSA’s electoral success should not be confused for policy success—much like the establishment Dems they replace, the DSA mayors are confusing class warfare for actual solutions to the affordability crisis,” MI’s Charles Fain Lehman observes in City Journal.

“[I]n embracing them, mainstream Democrats also risk welcoming in an organization that has quietly grown disturbingly radical, a fact that could prove politically disastrous in the long run,” he writes.

Related:

• What Spencer Pratt’s Defeat Tells Us About the American City (NYT)

• Mamdani Is Channeling Knicks’ Fans Euphoria. Will It Work? (NYT)

Workers Deserve More

Stu Smith explored the extreme new national DSA agenda, “Workers Deserve More” in City Journal this week. Plans include “scrapping the U.S. Senate, “abolishing the carceral forces of the capitalist state,” defunding the Department of War, amnesty for all immigrants, and “replac[ing] the President and Supreme Court with an executive and judiciary chosen by and subordinate to Congress.” I hope voters will take one look at these proposals and decide they’re as crazy as they sound.

Read Stu’s account of what “Workers Deserve More” means.

Red Rabbits and National Uprisings

At least part of the answer to how the DSA plans to accomplish its radical agenda seems to be through preparing for increasingly radical conflict.

“The Red Rabbits Security Commission, a subgroup within the DSA focused on “community defense” efforts, is, according to its authorizing resolution, preparing for a “national uprising against federal agents and police brutality.”In practice, that means training cadres in tactics like armed and unarmed self-defense, blocking intersections, and fighting “fascists” with umbrellas,” Stu writes in another piece that will help you understand DSA and its agenda.

Blurring Governing and Campaigning?

Josh Code wrote in The Free Press about his shift canvassing, organized by the city, to encourage residents to testify at the city’s Rent Guidelines Board hearings, which will help determine if and by how much rents may be increased for rent-stabilized apartments in October. The mayor ran on freezing rent increases as a major campaign promise.

“Immediately, though, I could see how the line between nonpartisan engagement and campaigning might become blurry,” Code writes. “Two of my four fellow canvassers were former Mamdani campaign aides who now work for the Mayor’s Office of Mass Engagement. One wore a bracelet that said “SOCIALISM.” The other two said they had knocked on doors for Mamdani last year. Off we went.”

Extra! Extra!

• Your Uber driver may soon be unionized (Reason).

• Recently, MI’s Jack Santucci and John Ketcham published a brief on New York’s de facto multi-party elections and how proportional representation might lead to more accurate representation of voters’ preferences.

Public education already recognizes that some students need something meaningfully different from the standard curriculum. In special education, that premise comes with clear expectations: identified students receive defined services that come with measurable goals and ongoing review. Gifted education rests on a similar premise—students are identified as needing instruction beyond the standard curriculum—but it lacks similar accountability.

The debate around gifted education has focused almost entirely on identification: who gets the label, which tests to use, and whether to rely on IQ scores, teacher referrals, or universal screening. In places like New York City, this has expanded into a broader debate over whether gifted programs should exist at all.

What receives far less attention is what happens after students are identified. Gifted programs often become enrichment rather than accelerated instruction, with unclear goals and little systematic monitoring of student progress.

A recent New York Magazine article questioning ‘giftedness’ raises legitimate concerns about such programs. Identification systems are, in fact, inconsistent. There are racial disparities in gifted enrollment. A nationally representative study tracking students from kindergarten through fifth grade found that participating in a gifted program was associated with gains of just 2 percentile points in reading and 1 point in math.

But the article draws the wrong conclusion.

If the system never actually defined its goals for gifted education, then the lack of strong outcomes can’t be evidence that advanced learners do not exist or don’t deserve advanced learning opportunities. It is just evidence showing that nobody required the programs to prove they were actually working. 

Is gifted education worth it?

The gifted label covers a wide range of experiences, from rigorous acceleration to occasional enrichment, with little consistency and limited evidence on effectiveness.

According to the most recent national data, gifted and talented students in public school programs make up 6.1 percent or 3.3 million of students nationwide. What kind of education are these children receiving? Could it be better?

We do not know. According to the most recent State of the States in Gifted Education report, of the 35 states that require schools to identify gifted students, only 9 require reporting on what happens afterward, and just 6 publish annual reports on services. None track what happens at the student level.

In special education, meanwhile, federal law requires ongoing documentation and progress monitoring, as well as periodic re-evaluation. In 2024, 8.2 million students received special education services because of the federal law IDEA, each with a documented plan and measurable goals.

New York’s Admissions Obsession

New York City’s heated debate over who gets into a selective classroom is an admission that education in such environments and the associated outcomes are perceived as worth the effort and expense for students and their families to obtain.

But while the debate has centered on who gets a seat, the more important question is what students actually gain from occupying one. Which schools are offering enrichment rather than accelerated education? Which of the two should be the goal of the program? Which has a bigger impact on student performance?

We have limited insight into what happens when a student enters the classroom and whether they are getting more than someone in a typical general education setting.

State data on the individual student exists. What is missing is the requirement to use the data to determine and report whether and how well the program is working. Student performance as measured by state exams is not perfect, but it can be used to indicate that some students may not be doing as well as expected. However, we do not know why because the programs are not evaluated.

What Accountability Should Look Like

In special education, accountability is not optional. No comparable expectation exists for gifted education in most states. If schools identify students who need instruction beyond the standard curriculum, they should be held to the same basic accountability expectations.

The New York Magazine piece asks whether giftedness is a myth. But in every other area of education, we do not judge the existence of student needs based on poorly defined programs.

We judge the quality of the services.

Before deciding whether programs should exist at all, we should ask whether gifted education meets the same standard applied to special education: is it well defined, properly monitored, and effective?

New York City’s politicians spend most of their time talking about an “affordability crisis” for city workers — but a hard look at the workforce suggests something more like an opportunity crisis.

According to one recent report, just 35% of jobs in New York City require a four‑year degree. At the same time, New York has a larger pool of well-educated residents, and a pre‑pandemic city report shows that 17% percent of workers with at least a bachelor’s degree were employed in occupations that typically do not require one.

The troubling takeaway: a potentially large share of college‑educated residents — already bracing for the disruption brought by artificial intelligence — are either underemployed in roles that do not require their credentials, or struggling to find work at all, as non‑degree jobs continue to dominate the city’s employment base.

Nationally, about 5.6% of recent college graduates aged 22–27 were unemployed as of May, higher than the overall unemployment rate and not far below the 7.2% unemployment rate for young workers without a bachelor’s degree, narrowing the traditional gap between them.

Jobs that require a degree pay more and lead to greater upward mobility, yet most of the job growth within the city has been in the low-wage service and care sectors that, for the most part, do not require advanced degrees, a trend that New York State projects will continue.

Downward mobility and underemployment help explain the angry politics that produced Zohran Mamdani. Unfortunately, his solutions are aimed at softening the blow — not at fixing the underlying mismatch between workers’ education and their opportunities.

New York City’s Job Slowdown

NYCEDC’s May 2026 Economic Snapshot shows that New York City lost 5,400 private‑sector jobs in April, leaving a net gain of just 4,700 private jobs for the first four months of 2026. The city’s unemployment rate fell 0.1% to 5.6% in April and labor force participation fell 0.7% to 62.7%.

MI’s Eric Kober wrote back in April about what the recent trends in employment numbers mean for the city whose private‑sector job growth has slowed sharply compared with 2024.

The Need for Better Jobs Explained

ABNY’s Making Growth Matter report (by HR&A) offers a good starting point for understanding the city’s labor market, and what its dynamics mean for the residents, whether they can afford market rate apartments, or children, and how trends compare among various metro areas.

The bottom line: low-wage jobs in sectors like health care and social assistance are expanding quickly, high-end finance and tech jobs continue to do well. The result is a barbell-shaped labor market that deepens the tale of the two cities for many residents, with most of the new jobs paying poverty wages. Meanwhile, the scarcity of medium-wage opportunities makes it increasingly difficult to move up from low-wage work into a job that matches the city’s cost of living, even for people with experience or credentials.

The Job Quality Problem

In a recent piece in Vital City, Tal Roded looks beyond the impact on individuals to how the city should approach the economic challenges of its polarizing labor market.

City Hall should stop treating any job as a win and instead prioritize expanding “good jobs” as defined by the Comptroller’s four criteria: a wage that meets local living costs, basic benefits like health insurance and paid time off, predictable and stable hours, and safe, dignified working conditions, he argues.

“New York should think and act strategically to diversify job growth by nurturing and attracting employers that complement the growth in the care economy,” Roded writes. “At the same time, reforms should be pursued to make health care and social assistance jobs more desirable and financially rewarding.”

Class Size Law as UFT Jobs Program

New York’s rising per-pupil spending is driven less by student needs and more by using the Class Size Law as a de facto jobs program to preserve UFT teaching positions despite a sharp enrollment decline, MI’s Danyela Souza Egorov writes.

Full compliance with the law would require spending billions on new teachers and space that the system doesn’t have. So the city now pays bonuses of up to $8,500 to thousands of teachers in oversized classes, while also “holding harmless” school budgets even as students leave—effectively funding empty seats and union headcount rather than tying staffing and dollars to actual enrollment or learning results.

The Mayor’s Job

• The city, facing a cash flow problem, is considering delaying payments to non-profits, NBC New York reports.

• Between basketball and soccer, it’s showtime in NYC, and our mayor is ready. On top of being ubiquitous, Mamdani is trying his hand as a TV host of his own “Morning Pitch”, giving our local TV stations a run for their money with daily morning updates like this

Extra! Extra!

• We need shade! As we deal with yet another heatwave and the coming summer will probably be hotter than the last, we should work more on planning for shade beyond planting trees, Diana Lind argues.

• We need more street lighting! If crime goes up when the sun goes down, there’s now research from New York City housing developments that crime goes down when lights go up, and by more than a third, Vital City reports.

A common question from education professionals outside New York is how the city can manage to spend over $42,000 per student while roughly half of its students fail to meet basic reading and math benchmarks. The answer is that the city is wasting a massive amount of money because it prioritizes politics over the needs of students and families.

Let’s look at the latest data.

The number of students in the city’s public schools is falling. The Department of Education’s projections indicate a 4.2% decline in enrollment for the coming school year (excluding pre-K students in off-site facilities), down from 766,730 to 734,551 in SY 2026-27.

The School Construction Authority is also projecting a steady decline.

Despite this, the total education budget under Mayor Mamdani continues to rise, with a proposed 7.4% increase, and by increasing total funding while educating significantly fewer children, the per-student cost keeps rising ever more.

Class Size Law

A major reason for these soaring expenses is the UFT’s outsized impact on city and state politics, perfectly illustrated by the ongoing battle over the Class Size Law.

Passed by the state in 2022—with the support of Mayor Mamdani, then an assembly member—the law mandated strict caps on classroom sizes in the city’s traditional public schools to improve the quality of education.

But from the beginning, the law was built on a series of practical impossibilities.

First, the city lacks physical space in school buildings to create thousands of new classrooms. Second, due to a labor shortage, there are not enough qualified teachers to staff these new classrooms. Lastly, the price tag is billions for new construction and teacher salaries that the city can ill afford. All of this was methodically recorded in the Class Size Working Group Minority Report.

This terrible law should never have been passed and must be repealed, as some are also asking. Academic consensus indicates that the individual classroom teacher is the primary driver of student success, not class size.

The political motive behind the law is transparent: after the city’s public schools lost more than 100,000 students between 2019 and 2022, it was clear the they no longer needed so many teachers. Albany hurried to pass the law to keep the UFT insulated with an artificially preserved headcount of dues-paying members.

Fiscal Implications

This year, facing a massive budget gap and mounting costs to comply with the law, Mayor Mamdani and Albany negotiated a two-year extension, delaying the full implementation of the Class Size Law until the 2029–2030 school year.

However, to secure union approval for the delay, the city struck a side deal with the UFT to directly compensate teachers working in non-compliant classrooms. Under this arrangement, the union won additional compensation of up to $8,500 for teachers working in rooms that exceed the mandated caps. It is estimated that 2,463 teachers will receive this bonus. The city is now budgeting to penalize itself—paying extra union salary costs because it structurally cannot meet the law’s demands.

Enrollment and Compliance

The district has achieved compliance in roughly 64% of classrooms, but meeting the remaining threshold poses a serious dilemma.

Most non-compliant schools are highly sought-after, popular institutions with full classrooms and limited physical space. To comply, these popular schools will be forced to reduce enrollment and turn families away. As Schools Chancellor Kamar Samuels recently noted, “when families don’t get their first option, they usually don’t come to the public school system.” By capping enrollment at its best schools, the city risks accelerating its own enrollment decline.

Instead of adjusting school budgets to changing demographics, Chancellor Samuels announced that schools that lost students this year will see their budgets remain completely intact for next year. This is an extension of the “hold harmless” policy instituted during COVID-19, which has already cost the city $1.6 billion. Decoupling funding from actual student enrollment removes accountability, giving principals no reason to care whether families and students are re-enrolling in their schools.

The outsized and growing power of the teachers’ union in NY runs counter to what is happening across the country. A new report from the Fordham Institute shows that union power is declining in most states, driven by the expansion of school choice and the Supreme Court’s ruling in Janus v. AFSCME, which barred the mandatory collection of union dues from nonmember teachers.

But while other major cities right-size their schools to match demographic shifts, and other states empower families to make choices about how to educate their children, New York continues to spend billions to protect its institutions and appease the unions. The $42,000 per-pupil figure reflects funding empty classrooms and paying penalties for a law that can never be fully implemented.

Childcare for All?

In March, following essentially flat enrollment in the city’s preschool programs, which the Mayor worked hard to promote and expand, the city finally decided to ask parents what they actually want and announced a partnership with the left-leaning think tank New America and the Robin Hood Foundation to survey parents of young children on childcare.

While local results are yet to be released, we already know that parents want more time with their children and more money, as New America’s recent national survey found. No single work, childcare, or leave arrangement dominates their preferences.

I expect New York parents’ preferences will broadly mirror those nationally.

In NYC, 55% of married couples and much higher numbers of single mothers and fathers with children under 6 work, meaning children live in households where all available parents are in the labor force.

These working parents need flexible arrangements that accommodate their desire to spend quality time with their kids as well as work—work schedules vary and young children get sick a lot, something which no formal care setting solves.

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This reality is fundamentally incompatible with the standard school-day 3-K and Pre-K model, which dismisses children at 2:20 PM and shuts down for the summer, leaving parents scrambling to find additional care. The demand for these seats plateaued at about 100,000 combined this year, meaning that—if past years’ trends hold—over 15% of already funded seats will again remain vacant.

Simply funding more costly preschool seats will not solve NYC’s childcare affordability crisis, or necessarily improve the overall quality of care available. A city-contracted seat is projected to cost significantly more than a portable voucher and nearly double the market rates of home-based providers, according to the NYS Comptroller.

The program most in demand appears to be the vouchers that cover an average of $300 per week in care costs for low income working parents, enabling them to choose the specific care, hours, and flexibility their families need. It is popular with those who qualify, leading to a waitlist of about 25,000, in addition to the roughly 70,000 already in use. The city could reduce vacant childcare seats, use the money to match the state funding already allocated, and unlock more of these vouchers.

If Mayor Mamdani truly wants to support working families, he may need to acknowledge that his top-down ideology about expanding universal provision of care may turn out not to be what New York’s parents actually need. We’ll find out soon enough.

Pension Sweeteners: The Gift That Taxpayers Can’t Stop Giving

Thanks to Governor Hochul’s and Albany legislators’ pandering to public-sector unions ahead of elections, New Yorkers will have to pay tens of billions of dollars more toward public pensions—and they’ll have nothing to show for it.

New York lawmakers are celebrating passing a massive new state budget, but its costliest provision—retroactive “sweetening” of pension benefits for half of the state’s public employees—is hidden from the sticker price, MI’s Ken Girardin reports.

Weaponizing pandemic-era labor shortages to roll back common-sense fiscal reforms, the unions secured a deal allowing teachers to retire five years earlier at age 58 with full, taxpayer-guaranteed pensions the state Constitution prohibits from ever being reduced, among other concessions.

This capitulation will cost taxpayers an estimated $550 million annually, inevitably driving up local property taxes. It is hard to overlook the blatant hypocrisy of local mayors who are simultaneously begging Albany for emergency financial bailouts while endorsing these budget-destroying pension expansions, Ken notes, pointing out that yielding to this pressure will only fuel further union demands to completely dismantle past fiscal discipline.

“You can’t blame the public employee unions for asking,” he writes, “but you cannot direct enough scorn at the elected officials for constantly saying yes.”

Related headlines:

• Unions in New York now squeeze the public worse than any other mafia — with politicians’ help. (NY Post Editorial Board)

• Powerful UFT snags teacher pay bumps of up to $9.5K in compromise deal to delay NYC class size law. (NY Post)

NYC Charter School Students Spend Hundreds More Hours in Class. It Shows.

It is common sense, and research backs it up, that more time in class translates into better educational outcomes. MI’s Jennifer Weber wrote earlier this year that NYC public school students, as a result of labor agreements with the Teachers’ Union, receive 130 fewer hours of instruction than the national average.

Since charter school students in the city tend to massively outperform their local public school peers, Jennifer looked at how many more hours of instruction they get. The numbers are staggering.

While a public school student gets about 1,200 hours in class, students at Success Academy and at KIPP get more than 200 and almost 300 more hours of instruction a year. That’s more than a month of classes, which compounds over K-12 to more than 2 additional years of schooling.

Given that the student populations are roughly the same, it is one reason why charter school students do better than their peers in school.

MI Research: Understanding How Proportional Representation Might Work in New York City

Mayor Zohran Mamdani’s new Charter Revision Commission has an opportunity to fix NYC’s “democratic deficit.” Currently, the City Council fails to mirror its electorate: right-leaning voters face a “proportionality problem” that diluted their 2025 vote share by half, while left-leaning factions are trapped in bitter primary fights.

As MI’s Jack Santucci and John Ketcham point out in a new study, “New York City already has a de facto multiparty system. Despite reforms like RCV, its electoral rules channel political competition into lower turnout, intra-party factional fights, rather than contests between distinct parties in the general election.”

To break this gridlock, the study simulates switching to proportional representation (PR) using 2025 election data, proving the city can align council seats with actual voter intent without causing political chaos. My colleagues find that regardless of whether the city adopts multi-winner borough districts (OLPR) or adds 20 citywide seats to the existing map (MMP), both systems ensure the council finally reflects how New Yorkers actually vote while keeping nearly all current winners in office.

Related:

• Jack also wrote for The Bigger Apple about why New York’s multiparty politics feel so chaotic. You can explore the outcomes of various representative systems here.

Extra! Extra!

• Mamdani Is Under Pressure to Act Amid Slowing Job Growth in New York (The New York Times)

• Who’s Minding the Storefronts? An Analysis of Storefront Vacancies in New York City (NYC Comptroller)

• A Cheap Fix for Urban Crime — try improving street lighting. (The Atlantic)

• New York may be facing a crime trend even worse than deadly gang violence, MI’s Charles Fain Lehman writes in the New York Post.

• NYPD arrests another teen murder suspect amid surge in minors charged with gun violence. (Gothamist)

• NYPD Commissioner Tisch warns World Cup, NBA Finals will come with unprecedented security risks — and a giant bill, the New York Post reports.

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D.C.'s Police Force Shrank. How Did It Get Safer?

Washington, D.C.’s Metropolitan Police Department (MPD) has a staffing problem. Since 2020, the department has lost 17 percent of its sworn force. The current staffing level—3,149 sworn officers—is the lowest recorded figure since 1967…

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19 days ago · 3 likes · 1 comment · Charles Fain Lehman

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This political pandering will cost taxpayers tens of billions of dollars over the next few decades, with the United Federation of Teachers (UFT) and other teachers’ unions walking away with the sweetest deal of all. Under the new rules, teachers and other school professionals can retire five years earlier—at age 58 instead of 63—with a full, unpenalized, taxpayer-guaranteed, state-tax-exempt pension.

This wasn’t the first time Albany has fallen for this, and unless people start paying greater attention to their mischief-prone state government, it won’t be the last.

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Taxpayers Bear 100% of the Risk

As I recently detailed, public-sector unions have been waging a coordinated campaign for years to roll back Albany’s common-sense reforms, enacted during and after the Great Recession, to their pension systems.

For more than a century, New York has had public pension systems to which cities, state agencies, schools, and other public employers have contributed on behalf of their workers. Those contributions get invested, and then the workers get pensions in retirement.

Crucially, these pensions are guaranteed by the state Constitution, meaning they can never be reduced. When pension investment returns come up short, taxpayers have to make up the difference. That’s also been the story as retirees have been living and collecting longer than expected.

Pension rules are set by state law, and an individual’s retirement benefits reflect when they joined the pension system (or which “tier” they belong to).

That distinction, funny enough, has historically provided New Yorkers with a layer of protection. It kept benefits—and liabilities—from getting jacked up during closed-door local union contract negotiations, where elected officials want to avoid politically painful spending cuts or tax hikes by shifting costs to the future. Pension benefits, for more than half a century, have been prohibited subjects of bargaining in New York.

But that statutory system creates another opportunity for mischief: state lawmakers can hike pension benefits retroactively. In 2000, as stock markets were raging toward the top of the dot-com bubble, Albany allowed employees to stop contributing after 10 years on the job and goosed the benefits for people closest to retirement. But pension investments didn’t just fail to keep growing: in some years, they fell.

But there was no going back. The 2000 pension sweetening plus the downturn helped cause public employer pension costs to explode from about $1 billion in 2000 to $10 billion in 2010, driving a massive spike in school property taxes outside New York City.

Albany’s response was to enact two rounds of pension reforms in 2009 and 2012, colloquially referred to as Tiers 5 and 6. These changes were a recognition that pension costs were elbowing out other public services, that investments couldn’t be counted on to generate as much return as they had in past bull markets, and that retirees were living notably longer than they had been a generation prior.

The reforms required employees to work 10 years to vest, required them to contribute between 3 and 6 percent for their entire careers, increased the full retirement age to 63, based payouts on a five-year average salary instead of three, and cracked down on late-career overtime manipulation (“pension-spiking”).

These rules allowed New York to bend the cost-curve while remaining exceptionally generous: traditional defined-benefit pensions are increasingly rare in the private sector, where just 14 percent of employees have access to them, down from 20 percent in 2010. But the unions viewed this fiscal discipline as an unconscionable unfairness.

The Phony Case for a “Fix”

The coronavirus pandemic and the economic upheaval that followed handed the unions an opportunity to rewrite history. After state lockdown policies ended, the labor market underwent an unprecedented tightening. By fall 2021, the U.S. Bureau of Labor Statistics’ monthly labor-market survey found that New York had more job openings than job seekers. In several months that followed, BLS found as few as 0.7 seekers per opening. (At the end of last year, it was back up to 1.2 seekers.)

The UFT and fellow labor outfits aggressively exploited this tight labor market, which was challenging both public and private employers alike.

The unions weaponized the situation and blamed the pension changes, saying they were harming recruitment and retention.

The evidence was not, at any point, on the unions’ side. For one thing, the New York state government had done more hiring in 2023 than in any year prior, a record the Hochul administration went on to smash the next year.

The unions, for all their concerns about recruitment and retention, maintained their fierce defense of various obstacles to hiring in areas ranging from the civil-service exam system to teacher licensure.

The first round of changes went largely unnoticed: Governor Hochul’s first budget in 2022 rolled back the vesting period for pensions from 10 years to five.

An October 2023 legislative hearing billed as an investigation into “recruitment and retention” turned out to be a choreographed airing of grievances for unions before sympathetic lawmakers. A parade of union officers complained about the lack of “parity” between pension benefits offered before 2009 and those after 2012—ignoring the change in how long retirees are collecting and how much taxpayers had been struggling to finance those retirements.

My Manhattan Institute colleague E.J. McMahon warned that rolling back the pension reforms would instantly cost New York taxpayers over $1 billion per year, and more than $2 billion annually by the early 2030s. He genially reminded lawmakers that people in very different tiers had worked alongside each other without incident for decades after Albany’s 1976 pension reforms.

But under the banner of “Fix Tier 6,” the unions next spring sought and got a significant change to how pensions are calculated, as Albany changed the formula to use a three-year average instead of five years. The seemingly modest tweak added about $380 million to annual taxpayer costs, a figure that will keep rising. About half of that price tag was borne by New York City, the state’s largest public employer, and meaningfully contributed to the budget gap that Mayor Zohran Mamdani faced earlier this year.

As the fiscal 2027 state budget was being crafted this year, the unions bused thousands of members to a stadium near the state Capitol for a rally meant to pressure Albany into grinding away even further at the pension reforms.

The most surprising attendee was Governor Hochul herself. While she was careful not to promise specific changes, her very presence was an endorsement of the unions’ grievances.

Keep in mind, every public employee who has complained about what they’re getting from the pension system decided that those benefits were adequately generous to accept their job. What’s more, many of them wouldn’t have been hired if it hadn’t been for the savings produced by the very pension reforms they now condemn. And again, the public employee unions have never presented compelling evidence that the 2009 and 2012 pension reforms actually harmed governments’ ability to deliver services.

The push against Tier 6 boiled down to the unions wanting something from taxpayers and believing that they had enough raw political power to get it. They were partially correct.

They also had another factor working for them: about one-third of state lawmakers are themselves members of Tier 6, meaning they stood to save more than $4,000 per year in pension contributions just from dialing back pension contribution levels to where they stood in early 2012. (Assemblyman Mike Fitzpatrick of Suffolk County has long pointed out this conflict of interest, calling the arrangement “fiscal carbon monoxide” and pushing a bill that would end it.)

News reports indicate the unions, with the blessing of legislative Democrats, demanded changes that would have cost taxpayers an additional $1.5 billion annually, and that Governor Hochul balked. In the end, the sides settled for two major changes.

Teachers with 30 years on the job could retire as early as age 58 without a diminished pension, a double hit for taxpayers who will fund longer retirements over fewer years of service. Non-teachers, meanwhile, would remit a smaller share of their pay toward their pension. For instance, employees making $75,000 per year would pay 3 percent instead of 4.5percent, and the maximum contribution rate would drop from 6 percent to 5.75 percent. In addition, uniformed employees would get to count more overtime pay toward their pensions.

The cost of the change will be approximately $550 million per year and will continue to rise.

Hypocrisy Abounds

New York City Mayor Zohran Mamdani, as well as the mayors of Buffalo and Albany, simultaneously pled with Albany for emergency financial aid to solve their local budget crises while still aggressively supporting the latest round of pension-sweetening.

The New York State School Boards Association, constantly hectoring Albany for more aid for school districts, also endorsed rolling back the 2009 and 2012 reforms.

Meanwhile, many of New York’s “pro-taxpayer” Republicans have lent support to the unions’ cause. A few, including Long Island Assemblyman Doug Smith, the top Republican on the Assembly Education Committee, even attended the union’s Albany rally and gave special guest American Federation of Teachers president Randi Weingarten a standing ovation.

Don’t expect the same enthusiasm when pension actuaries later this year tell school districts and municipalities how much their pension costs are going up as a direct result.

More Is Never Enough

It’s not clear which lawmakers sincerely believed the unions’ bogus claims that their demands were justified, and which ones simply chose to ignore the costs.

One thing is clear: the manner in which Governor Hochul and lawmakers acquiesced to the unions’ demands will guarantee that they are back next year demanding more. Why, they’ll ask, should some employees wait until 63 to collect a pension when teachers retire at age 58? How come, they’ll huff, teachers must pay 6 percent toward their pensions when people with office jobs are paying less?

Yielding to this pressure will fuel, not quench, the unions’ bellyaching about unequal treatment. The unions will not stop chipping away at Albany’s pension reforms until they are completely dismantled, and taxpayers are shouldering the massive burden that they avoided only thanks to those reforms. The UFT will keep pressing for the retirement age to be lowered all the way back to 55; other unions will press to slash employee contributions to 3 percent (or eliminate them altogether).

New York needs to scale back its involvement in the pension business altogether. Instead of expanding legacy liabilities, New York should be placing most new employees—and all new teachers—in the same portable defined-contribution plan offered as an option to (and picked overwhelmingly by) SUNY professors.

The ultimate irony is that the SUNY professors enjoying this flexibility are represented by the same union, the New York State United Teachers, that fights to keep K-12 classroom teachers locked into the traditional pension system. Merely offering a defined-contribution plan option would expand the pool of potential teachers by making mid-career moves more attractive.

Albany politicians have, in just three years, saddled New York taxpayers with upwards of $1 billion per year in entirely avoidable pension costs that will survive even the worst economic downturn or budget crisis.

You can’t blame the public employee unions for asking. But you cannot direct enough scorn at the elected officials for constantly saying yes.

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More than 150,000 NYC students attend charter schools, roughly 1 in 7 public school students in the city. On race, poverty, and geography, these systems serve many of the same students1. Charter schools do enroll somewhat fewer English Language Learners and students with disabilities. But other differences are structural: different calendars, different school days, different funding models, and dramatically different academic outcomes.

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In a recent piece for The Bigger Apple, I explained how New York City’s students spend fewer hours in the classroom than their peers across the state’s “Big 5” school systems, a result of labor negotiations with the UFT.

The NYC DOE 2025-26 school calendar begins on September 4, 2025, and ends on June 26, 2026. Under the UFT contract, the standard school day lasts 6 hours and 50 minutes.

Success Academy, the city’s largest charter network, began classes on August 11 for some grades and will conclude the school year on June 12. By the time DOE students arrive for their first day of school, some Success Academy students will already have spent more than three weeks in class. KIPP NYC begins on August 25 and runs through June 18, with school days lasting from 7:30 a.m. until 4:00 p.m. — roughly 100 minutes longer than the DOE school day.

A DOE student receives roughly 1,200 instructional hours annually. A Success Academy student receives closer to 1,400. A KIPP NYC student receives nearly 1,500. Over the course of a single school year, charter school students receive the equivalent of more than a month of additional instruction.

And those estimates assume perfect attendance. During the 2024–25 school year, one in three NYC DOE students missed at least 10% of the school year. (Data on charter school attendance is not readily available.)

Research shows that more time spent in the classroom leads to greater student learning. While many variables contribute to student outcomes, more instructional time in classrooms is associated with greater student gains.

How the Students Perform

On the 2025 New York State third-grade exams, 58% of NYC DOE students were proficient in English Language Arts (ELA) and 63.3% in math citywide. Across 29 elementary schools, 92% of Success Academy’s students were proficient in ELA and 97% in math. KIPP NYC students averaged 66% in ELA and 75% in math.

These differences are especially notable because many charter schools operate in districts where academic performance remains among the lowest in the city.

In District 5 in Harlem, where only 42% of DOE third graders are proficient in ELA, nearby charter schools posted substantially higher results: KIPP STAR reached 94% proficiency, Success Academy Harlem 2 reached 90%, Success Academy Harlem 5 reached 82%, and KIPP Infinity reached 66%.2

Not every charter school dramatically outperforms its surrounding district. KIPP Bronx III, for example, reached 48% proficiency in third-grade ELA — still five points above the surrounding DOE district average.

Across 37 charter elementary schools in the Success Academy and KIPP NYC networks, the average school outperformed its surrounding DOE district by more than 30% in both ELA and math.

The Differences Extend Beyond Elementary School

On the 2025 state exams, KIPP NYC eighth graders reached proficiency at rates of 7% in ELA and 70% in math. In the DOE districts where those schools operate, eighth-grade proficiency averaged 47% in ELA and 46% in math.

Success Academy and KIPP NYC are not the entire charter sector story. Smaller schools such as South Bronx Classical have also produced similarly stellar outcomes in some of the city’s lowest-performing districts.

At South Bronx Classical, third graders reached 92% proficiency in reading and 96.5% proficiency in math. Eighth graders posted 98% proficiency in reading and 99% proficiency in math.

Meanwhile, across the Bronx overall, only 44.2% of DOE third graders were proficient in reading, and 51% were proficient in math.

What We Pay

NYC DOE spending reached roughly $32,000 per-pupil in the 2024-25 school year, on a budget approaching $40 billion. According to audited financial statements, Success Academy spent $21,218 per student during the 2024–25 school year, while KIPP NYC spent $21,862 per student.

Both networks also received philanthropic support, though at modest levels: Success Academy reported approximately $216 in additional philanthropic funding per student, while KIPP NYC reported roughly $112 per student.

Conclusion

DOE students attend school roughly 130 fewer hours annually than the national average and several hundred fewer hours than many of their charter school peers located only blocks away. In many districts, fewer than 40% of students reach grade-level proficiency by third grade, despite the city spending almost twice as much money per student as charter schools.

By the time charter students graduate, they have had at least two years of additional instruction than their DOE peers.

Until instructional time and student outcomes become priorities in NYC’s labor negotiations, the charter sector will continue to do what DOE schools cannot, and students will be the ones paying the price.

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The result has been a mix of ideological ambition and politically pragmatic tactical improvisation without radical structural change. Mamdani himself tends to speak in terms of transforming how the local government serves the city.

“New Yorkers deserve a government that works as hard as they do—and a government as careful with their money as they are,” he said in announcing his new Commission on Government Efficiency this week. The goal, he said, is to cut through bureaucracy and deliver housing, transit, child care, and other services “faster, smarter and more effectively for working people,” restoring faith in government by proving it can produce results.

The emerging question, however — and the one that will define his mayoralty — is how he will balance the tension between a politically pragmatic, technocratic governing approach with his alliance with labor and his broader political coalition.

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As Stephen Eide observes, the administration has treated the city’s fiscal challenges less as a constraint to be managed than as an opportunity to advance a broader project of class politics—mobilizing support around taxing the wealthy while deferring harder questions about long-term spending, particularly in areas like pensions.

To look at his budget, you wouldn’t know it was put together by a socialist mayor, Nicole Gelinas notes. Mamdani has been successful at getting support from Albany, but otherwise it is more ‘business as usual’, shifting costs to the future without addressing the structural issues that make the budget unsustainable in the long run.

Mamdani’s NYPD has been successful in keeping crime down, including through quality-of-life policing. He is under pressure to keep disorder under control as the World Cup and New York summer descend on the city, while his supporters grow increasingly unhappy about the lack of police reforms. It remains to be seen what happens next.

He has been advancing existing transportation capital projects that have the potential to improve transit flow in the city while making it safer. Meanwhile, his ideological push to expand universal childcare is already meeting the limits of demand.

Whether in its approach to housing, labor regulation, or economic development, the emphasis has been less on expanding the city’s overall capacity and competitiveness than on restructuring who benefits from it.

At least in these early months, a big picture is becoming clearer: a version of municipal socialism that prioritizes small wins and redistribution over growth, while deferring the hard choices that would require real transformation.

Big Picture Socialism

Eide argues that, based on what we have seen so far, “the class war’s likely to be permanent, the promise of worker power remains dubious, and socialist New York will be a more inward-oriented place than the city it replaced.”

In Eide’s view, the Mamdani administration treated the budget deficit less as a fiscal management problem than as an opportunity to mobilize political support around taxing the wealthy and reinforcing class consciousness. At the same time, he argues that the promise of “worker power” is undermined by the fiscal record of union-influenced pension governance, where labor-led institutions have often struggled with long-term stewardship.

More broadly, Eide contends that Mamdani’s politics encourage an inward-looking governing style focused more on satisfying local activist coalitions than on maintaining New York’s broader economic competitiveness.

Read the full story.

Housing Plan’s Ambition Constrained by Ideology

Taking a closer look at Block by Block, the Mamdani administration’s housing plan that was released this week, MI’s Eric Kober concludes that the plan “may produce significant new construction and some useful reforms, but it remains constrained by ideological commitments that limit its ability to solve the city’s housing problems.”

Existing rent-regulated housing will remain financially distressed and dependent on public support, while NYCHA’s capital crisis will continue to exceed the willingness of any level of government to fully address it, he writes. Meaningful improvement would require policy and funding shifts beyond the current political consensus.

Read the full story.

Mayor Mamdani’s Budget Isn’t Socialist

New York’s budget is so burdened by legacy costs and institutional obligations that even a mayor elected to dramatically expand government ends up governing conventionally unless he is willing to cut, reform, or restructure the existing system first.

“It says a lot about New York City that in order to afford socialism, we’d have to cut spending first,” Nicole Gelinas observes in an excellent piece in the City Journal.

“Mamdani has proven politically pragmatic, preferring modest victories, relative to his campaign promises, to protracted fights with the ageless institutions, from unions to anti-poverty advocates, that make up New York City’s permanent government,” she writes.

As a result, his first budget is more of a continuation than a disruption.

Read the full story.

The End of Low-End Contract Work?

Council Member Tiffany Cabán, a Democratic Socialist, has introduced a bill that would require operators of last-mile delivery facilities to obtain a license and directly employ workers who sort packages and make deliveries, prohibiting the use of subcontractors or staffing agencies for these core services—continuing a broader trend of policies that make it harder to operate low-margin, high-volume services within the city.

MI’s Adam Lehodey writes that framed as a worker-safety proposal, the measure would likely eliminate thousands of city delivery jobs, push logistics operations to the suburbs, increase costs for consumers, and worsen congestion without meaningfully improving safety outcomes.

As with similar regulations affecting app-based services, the effect is likely to be less to build new economic capacity than to reshape existing activity in ways that favor organized labor and politically aligned constituencies—often at the expense of consumers and contract workers.

Read the full story.

Extra! Extra!

• Chicago Transit Authority revised its 2015 ridership up by 19 million trips after deploying a new automatic passenger tracking technology. The data also showed a significant increase in the number of riders “underpaying” the fare. (Streetsblog Chicago)

• After a deadly crash between a bicyclist and an e-scooter rider that killed both, experts and advocates are calling on Mamdani to focus on reining in illegal electric vehicles. (Streetsblog New York)

• What parents of young children want is more time and more money, a new national survey by the left-leaning New America think tank finds, while no single work, child care, or leave arrangement dominates their preferences.

  

• The Mamdani administration is also working with New America on a survey, paid for by the Robin Hood Foundation, of what parents of young children in NYC want when it comes to childcare.

• Utah is shifting from "Housing First," which prioritizes low-barrier shelters and permanent housing, to a strategy emphasizing mandatory treatment and enforcement. (Bloomberg CityLab offers a deep dive.)

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The plan only partially addresses the economics of mixed-income development, the financial distress of rent-stabilized housing, and NYCHA’s long-term capital crisis. As a result, new housing will come at considerable public expense, private investment will remain constrained, and major structural problems in the city’s housing system will persist.

New Housing, With Key Questions Left Unanswered

Mamdani is more open to private investment in new housing than in existing, rent-regulated housing.

He wants to build on the steps already taken to address the city’s shortfall in housing supply relative to household demand. These include the 2024 amendments to the state Multiple Dwelling Law lifting the cap on the size of new residential buildings, the same year’s “City of Yes” zoning reform, the 2025 amendments to the City Charter creating a shortened review process for specified categories of new housing proposals, and the 2026 expansion of categories exempt in state law from environmental review.

The new plan promises to set five-year quantitative goals for new housing later this year, both citywide and by community district. For now, expanded capital spending will increase affordable housing production to 8,000 units annually in the next two city fiscal years.

To produce new mixed-income housing without cash public subsidies, the city will propose zoning changes focused on areas well served by public transit, which could include both subways and Bus Rapid Transit routes. There will be a citywide text amendment expanding the precedents set by “City of Yes,” neighborhood-wide zoning district map amendments, and targeted zoning map changes for smaller amounts of housing that can take advantage of procedural waivers and shortened approval timelines.

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This seems good but avoids the question of reforms to Mandatory Inclusionary Housing (MIH), the city’s practice (which Mamdani promises to continue) of requiring that a sizable percentage of units in new buildings in rezoned areas be offered at below-market rents.

MIH functions as a tax on housing, restricting developers’ return on investment and requiring that market-rent units effectively subsidize the cost of building below-market units. New housing gets built only because these costs are offset by state-enacted property-tax exemptions, currently known as “Section 485-x.” This is unfortunately less generous than previous versions for buildings over 99 units, where the tax exemption is required not only to fund the low-rent units but also to underwrite “prevailing” (union-scale) wages for construction workers.

This provision has created a de facto “99-unit cap” for 485-x projects, undermining the city’s housing production goals in rezonings. To make the finances work in many cases, either the prevailing-wage requirement needs to be amended (unacceptable to the pro-union mayor) or MIH needs to require fewer below-market units (probably no more to his liking). Thus, his plan is silent on this issue.

The plan also says nothing about how rezonings will produce new mixed-income housing in neighborhoods where the underlying economics of new construction do not work, even with Section 485-x tax exemptions, because market rents are too low. It is likely that the moderate-income White Plains Road area in the Bronx, currently under study, is one such neighborhood. Imposing MIH in such areas deters, rather than promotes, new housing.

A positive aspect for attracting more private housing investment is the proposed appointment of an “Affordable & Efficient Code Reform (AECR) Task Force” to “identify specific areas of the NYC Construction Codes for cost-saving measures that can be achieved without compromising safety.” Elevator-size requirements and plumbing standards are specifically called out for reconsideration. Such reforms are long overdue.

The Plan Is Weakest on Existing Rent-Stabilized Housing

The problems in this sector are well-documented and concentrated in older privately owned buildings in neighborhoods where pre-2019 deregulation had little effect, as well as in government-subsidized affordable housing run by nonprofits. Together, these two categories account for more than 600,000 rent-stabilized units.

Mamdani campaigned on a rent freeze for rent-stabilized units, which would exacerbate economic distress in these rent-stabilized buildings. Earlier this month, the Rent Guidelines Board approved preliminary rent increase ranges that accommodated the mayor’s position.

Ideally, the plan would explain how the city would protect against housing disinvestment by enabling building owners to break even on operating costs. Before the plan was released, the Wall Street Journal reported that for non-profit owners, the city would be willing to use existing regulatory authority to adjust rents on vacant units, providing more income to owners. This led to an exchange at the mayor’s Gowanus press conference that amounted to something less than a denial.

That move would be positive, should it happen.

For private for-profit landlords, Mamdani is offering modest offsets to a likely rent freeze. The city will invest $100 million in a previously-announced insurance fund. Exactly how the fund will work and how it will reduce costs for rent-stabilized buildings remains to be determined. A Water Board program to provide predictable water and sewer rates will be expanded. The city will streamline facade inspection requirements and reduce the need for costly sidewalk sheds. Finally, the state legislature has extended the J-51 program, which provides a property tax exemption for major capital improvements. These are worthwhile but modest measures that do not resolve the underlying revenue problem.

Fiscal distress in private rent-stabilized housing is therefore likely to persist, especially if a rent freeze takes effect. That sets up a battle in the legislature next year for at least relief on vacancy rents. Nothing in Mamdani’s plan indicates he will be helpful to landlords in this quest. It is likely that, in the medium to long term, the city will face even more pressure to expand subsidies for private rent-stabilized housing. Mamdani seems happy to do this, since it places even more housing under city regulatory agreements. However, the city can ill afford such subsidies at scale, given other budgetary pressures.

NYCHA Remains the Largest Unresolved Problem

A third category of distressed housing is represented by the 177,000 units owned by the New York City Housing Authority (NYCHA). Here, Mamdani is allocating resources from the expense budget to accelerate repairs on both occupied and vacant units. To address NYCHA’s vast backlog of capital (major rehabilitation) needs, Mamdani is carrying over programs initiated by his predecessors: PACT, under which NYCHA retains ownership but private managers are brought in, and the Public Housing Preservation Trust, under which the trust undertakes building rehabilitation but NYCHA continues to be the management entity. Both utilize enhanced federal subsidies to finance rehabilitation.

The problem is that both programs can, at best, treat only a fraction of the NYCHA stock. New York City could easily spend its entire housing capital budget upgrading dilapidated public housing buildings, but no mayor has been willing to do that, including Mamdani. Like his predecessors, he is under pressure to support the vast affordable housing new-construction industry the city has built over the years. In addition, Mamdani does not want to let the federal government off the hook for public housing’s capital needs, despite the manifest lack of interest from the current president and Congress. Even if Democrats capture one or both houses of Congress in 2026, and the presidency in 2028, their spending priorities are likely to focus on restoring cuts in health care and food aid rather than on new commitments to public housing.

The upshot is that public housing residents continue to live with deteriorated conditions. Not surprisingly, tenant activists were critical of Mamdani’s plans but lack the political clout to make public housing an overriding city priority.

In summary, at considerable public expense, Mamdani’s plans are likely to result in significant new housing construction. Useful reforms may happen, but private investment will be held back by impractical, ideologically driven restrictions.

Existing rent-regulated housing will continue to exhibit substantial levels of financial distress that will drain city resources. NYCHA will remain a political orphan, with problems too large for any level of government to accept full responsibility. Better outcomes would require policy reversals and funding commitments well outside the current political consensus.

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Earlier this month, in celebrating New York City’s FY27 budget plan, the Mamdani administration declared victory not only for the mayor himself but for the Democratic Socialists of America.

Other commentators felt that other factors, such as Gov. Kathy Hochul’s political needs or deference to unions, have shaped the budget process more than socialist values. Still, sometimes it’s useful to take politicians at their word.

“Socialist” is not only a brand that New York Democrats use to distinguish themselves from one another in a one-party context. They mean it, or some appear to. And almost six months into the Mamdani era, details have begun to emerge about how exactly “socialism” is translated into the municipal context.

We’ve learned so far that the class war’s likely to be permanent, the promise of worker power remains dubious, and socialist New York will be a more inward-oriented place than the city it replaced.

The Class War Will Be Permanent

Managing the politics of deficits is a crucial test for any mayor. Mayors need to appear to control the budget and, by extension, the city government, distinct from the numerous advocacy organizations demanding more money or legislative bodies. That’s true even when the budget’s in deficit, as with New York City this cycle.

Mayor Mamdani’s contribution to the art of budgetary politics has been to reframe the deficit in class-war terms. There is no recession. Therefore, the only explanation for why New York doesn’t have enough money must somehow lie in under-taxation of those who can and should pay more (not overspending). Mamdani has been able to treat the deficit (initially estimated at $12 billion) as almost a political gift, since he can’t be blamed for it, since he inherited it, and he wants to tax the rich for his own socialist reasons. He wants to tax the rich to forge class consciousness.

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New York’s diversity is often seen as a cause of its deep-blue politics and could therefore also be seen as contributing to the city’s conduciveness to socialism. But standard explanations for why socialism never thrived in America point to diversity as a major reason1.

Let’s define “working class” in New York City as a household income between $50,000 and $100,000. That’s close to 800,000 households. They’re pretty diverse, but socialists see them as natural allies who just don’t know it yet. Workers need to think of themselves as workers if they’re to be united against capital. Mamdani can do by calling for taxing the rich, which he can keep doing for the foreseeable future, because New York’s budget is projected to remain structurally imbalanced for the foreseeable future.

Mayor Bill de Blasio also saw taxing the rich as an end in itself. Early in his mayoralty, de Blasio saw a pre-K program funded by taxing the city’s wealthy as superior to one funded by general state revenues. But that was a temporary goal set during de Blasio’s 2013 mayoral campaign. He frontloaded his class warfare, then moved on to other initiatives and controversies, many of a non-economic nature.

Socialists, as distinct from leftists as a whole, pride themselves on their disciplined focus on economics. They revere Sen. Bernie Sanders because he has never changed. So, Mayor Mamdani’s recent Wall Street charm offensive notwithstanding, New York City’s class war has just begun.

Worker Power Underwhelms

But even if workers in New York gained more power, would that be a good thing? Not according to the experience of pension governance.

That experience has been on display throughout the FY27 budget cycle.

At the state level, unions have been demanding benefit increases. At the local level, Mamdani wants to cut contributions and supports increasing benefits. Every single pension-related idea floated during this cycle has been fiscally irresponsible, suggesting that both New York’s working class and its socialist leadership aren’t up to the challenge of socialist governance.

A socialist-led working class doesn’t just want more money from capital; they ultimately want to run the economy by transferring control over major corporate entities from capital to labor. Socialists believe that a labor-led economy will be better in all kinds of ways—fairer, less crisis-prone, more long-term oriented, you name it—than with the billionaires in charge.

Many of us have trouble imagining that scenario. How would an Amazon run by its employees function differently from one run by Jeff Bezos? Thus, the value of seeing pension system governance as a proxy for socialist governance. Pension funds may not be businesses, but they are multi-billion-dollar entities over which unions wield massive influence and are forced to make crucial strategic decisions, such as howto balance members’ short-term vs. long-term interests.

Nationwide, state and local pension systems are underfunded by $1-5 trillion dollars (depending on the actuarial assumptions), in a few cases, they’ve made cities insolvent, and their insatiable employer contribution demands ($10.4 billion this year in the case of New York City, a sum exceeding the budgets of all agencies but two) have deprived government service systems of critical investment. None of that would have happened had unions and progressive officials avoided the kind of gimmickry and benefit sweeteners Mamdani and the unions are lobbying for.

The billionaires can make a strong argument: someone has to be in charge of the economy’s commanding heights, we stand proudly behind our leadership record, and if labor replaces us, everything will go downhill. We know this because the examples we do have of worker power in America, such as pension governance (and, by the way, faculty governance in higher education), are almost never invoked as examples of effective governance.

New York’s Turning Inward

Scholars of municipal government have long debated whether internal factors, such as interest-group pressure, or external factors, such as economic competition with other states and localities, determine policy outcomes.

‘Accountability to voters is paramount,’ we have been continually reminded during our populist times. But within the American federalist system, one definition of leadership is mayors and governors stepping back from vote counting and taking a broader, longer-term view of the competitive context.

A local leadership truly desperate to compete against other states and localities probably wouldn’t do something like start America’s second-largest housing voucher program after the federal Section 8 program. But they would do it if they were desperate to make local activists happy.

Mamdani and many others across the broader left complacently dismiss the idea that New York needs to worry about competing for billionaires.2 Mamdani certainly competes for attention. His view of New York, relative to other states and cities, resembles that of Swedish Prime Minister Olaf Palme’s view of his country as a “moral superpower.” Virtuously socialist New York will lead by example. But this is a concept of competition that translates more into media hits than economic activity.

Regardless of whether a city wants to compete for billionaires, it should strive to compete about something meaningfully economic.

This is obvious during crisis conditions. New York benefited handsomely from the fact that, coming out of 9/11, Mayor Bloomberg’s economic development team was determined to take nothing for granted. Just as local leaders should handle the budget responsibly, whether or not it’s in deficit, they should also stoke competitiveness into the local economy even when it’s not in a state of collapse. Complacency is a vice.

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Municipal socialism, based on what we’ve seen so far, seems inclined to take local socioeconomic conditions for granted. A budget that holds everyone harmless is excellent. Keep the money circulating throughout the local system of services funded, provided, and/or regulated by the government. To keep the billionaire globalists from living in your mind rent-free, don’t think too much about what Florida or Texas are up to. Municipal socialism embraces an inward-looking political model well suited to the populist era.

Mayor Mamdani’s Budget Isn’t Socialist

New York’s budget is so burdened by legacy costs and institutional obligations that even a mayor elected to dramatically expand government ends up governing conventionally unless he is willing to cut, reform, or restructure the existing system first.

“It says a lot about New York City that in order to afford socialism, we’d have to cut spending first,” Nicole Gelinas observes in an excellent piece in the City Journal.

“Mamdani has proven politically pragmatic, preferring modest victories, relative to his campaign promises, to protracted fights with the ageless institutions, from unions to anti-poverty advocates, that make up New York City’s permanent government,” she writes.

As a result, his first budget is more of a continuation than a disruption.

Read the full story.

Why the LIRR Strike Matters

The basic takeaway from the three-day Long Island Rail Road strike is that it could have been worse—but it also could have been better. The tentative deal includes a compromise on raises but no meaningful work-rule reforms, even though those rules are a major reason the LIRR is so expensive to operate.

For example, a train engineer who operates both a diesel and an electric train during the same shift, or moves a passenger train to a yard after service, gets paid for an extra day’s work.

The agreement matters beyond the LIRR itself because it could set a precedent for future negotiations with other transit unions. Should the governor have held out longer? MI’s John Ketcham has more.

Podcast

This week, we spoke with E.J. McMahon, New York’s preeminent expert on public finance, about the LIRR strike, the proposed state and city budgets, and the outsized influence unions wield over both.

Here’s a snippet on unions:

Listen to the full episode (and subscribe!) to The Bigger Apple podcast.

Second Public Grocery Announced

The 20,000-square-foot public grocery store is expected to open in 2027 at The Peninsula, a 740-unit, 100% affordable housing project to be completed in Hunts Point, the South Bronx.

“Mamdani’s plan proposes, in essence, that the city will compete with local grocery stores—using public subsidies to lower the cost of staple foods—and that it will do so while paying store employees union wages,” MI’s Eric Kober wrote earlier this year, when the first store was announced in East Harlem. “It is by no means clear that both objectives are possible without additional subsidies.”

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The mayor believes the store will prove that government can be a force for good.

“And standing here this morning, I cannot help but think of the words of our 40th president, Ronald Reagan. He famously said, “The nine most terrifying words in the English language are: I'm from the government, and I'm here to help.” It's a good quote, but I disagree,” Mamdani said at the announcement.

Mamdani’s First Rezoning

The administration has announced its first major rezoning initiative, targeting an area south of Prospect Park and Greenwood Cemetery in Brooklyn.

The rezoning offers an opportunity to reverse a pattern of exclusionary land use in neighborhoods long constrained by restrictive zoning and historic-preservation rules, MI’s Eric Kober writes.

I’ve shared my thoughts on landmarking in the area before, and there is great potential for more housing here. But as we think about housing, we should not forget to talk about what it takes to make this city run: the two major corridors under consideration are local truck routes and service roads for the city — the proverbial back alleys. Should the city have no back alleys?

“The land-use pattern in this area offers the potential for a mix of small and large multifamily buildings, for sale and for rent, subsidized and unsubsidized, accommodating a diverse population,” Kober writes. “The Mamdani administration should demonstrate planning wisdom and ideological flexibility and allow that to happen.”

Full story here.

SPEED up Affordable Housing Development

Mamdani’s SPEED initiative could meaningfully reduce delays in affordable-housing development by streamlining environmental review, permitting, and lease-up processes, but administrative reforms alone will not solve New York’s housing shortage without broader changes to the city’s political and regulatory environment surrounding housing production, writes MI’s Daniel Golliher.

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• Mamdani’s inaugural Talk with the People streamed across social media channels on Thursday afternoon. Joined by guest co-host and influencer Moose, the mayor answered questions posed in a Twitch chat. (TechCrunch has more.) Mayor Fiorello La Guardia and his Talk to the People radio show served as the inspiration, and Mamdani once again leaned on Frank Sinatra—though I probably would not have chosen the lyric “Start spreading the news, I’m leaving tonight” as the intro.

• Risky Business: NYC Comptroller’s report on AI warns that New York City’s fiscal health is increasingly vulnerable because its tax base depends heavily on high-income, white-collar industries that generative AI could significantly disrupt through slower hiring, weaker wage growth, and declining demand for office space.

• Not Enough Demand: Roughly the same number of children were enrolled in Pre-K and 3-K programs this year as last, despite Mamdani’s massive outreach push to drive up enrollment, as he plans to expand the programs that may have reached their saturation point.

• Penn Station: Feds promise $8 billion for a bright design by Penn Transformation Partners.

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A map published by DCP shows a study area bounded roughly by Fort Hamilton Parkway and Parkside Ave. on the north, Ocean Avenue on the east, the cross-Brooklyn rail right-of-way proposed as a route for the IBX light rail line on the south, and New Utrecht Avenue on the west.

It’s not a new idea, but still, it’s timely.

Parts of the same area are shown on a map in the PlaNYC: A Greener, Greater New York report, published by Mayor Michael Bloomberg’s administration in 2007, as “areas of opportunity” for new housing development. (I was one of the leaders of the DCP team that drafted the land use component of that plan.) During the intervening 19 years, the area has largely become less, not more accommodating to new housing. Mamdani’s DCP now has a chance to do better.

The “South of Prospect Park” area offers many advantages as a place to live. Early in the 20th century, the area was linked to Downtown Brooklyn and Manhattan by three subway lines: along New Utrecht Avenue (now the D train), McDonald Avenue (now the F), and a mid-block cut through Flatbush and Midwood (now the B and Q).

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The city’s initial zoning resolution, enacted in 1916, allowed apartment buildings—typically six stories—over most of the area up to 1960 (the exceptions were some small-home areas between Coney Island Avenue and Ocean Avenue, labeled E, G, and G-1 on this map). In those days, however, land values were low, and most of the area was developed with small homes. Apartment buildings were concentrated along Ocean Parkway and a few other areas.

In the 1960’s, public transit in the area improved dramatically as the once-separate IND and BMT subway lines were merged, allowing increased service to Midtown Manhattan over the tracks on both the north and south sides of the Manhattan Bridge. But at the same time, the city’s 1961 zoning resolution made zoning much more restrictive, so that transit capacity was never fully used.

The mapping was greatly expanded of low-density residential zoning districts, where only small homes and, in some cases, small walk-up buildings with two or three units were permitted. Moreover, the 1961 zoning created industrial and automotive service zoning districts where no housing was allowed at all.

Such districts continue to exist today, along Coney Island and McDonald Avenues, as well as an area from 36th to 39th Streets at the northern end of Borough Park. Land that would be hugely valuable if zoned for apartment buildings is encumbered with gas stations, car washes, and low-rise buildings.

Some communities, dissatisfied with mere restrictive zoning, have also taken advantage of another innovation of the 1960’s: historic districts designated by the Landmarks Preservation Commission. Neighborhoods along the B/Q subway line have five: Prospect Park South (1979); Ditmas Park (1981); Fiske Terrace-Midwood Park (2008); and Beverley Square West and Ditmas Park West (both in 2025).

With all this restrictive zoning and historic preservation, it’s not surprising that not much new housing has been built in the 65 years since 1961. A modest number of new units were constructed as a result of the 2009 Flatbush rezoning, such as 1111 Foster Avenue, a 60-unit rental completed in 2022.

That building reflects the complex interaction between New York City zoning and property tax incentives enacted by the state legislature.

The environmental review for the Flatbush rezoning anticipated that the site would be developed using a floor-area bonus incentive, known as Voluntary Inclusionary Housing (VIH), in exchange for making 20 percent of the units permanently below-market-rate.

That did not happen; the developer built a building with less floor area, but one that still qualified for an as-of-right property tax exemption. To obtain that incentive, the developer agreed to offer 30 percent of the units at rents that were only slightly below market.

DCP’s “South-of-Prospect” zoning study webpage complains that the “Voluntary Inclusionary Housing incentives created in the rezoning went largely unused and affordable housing production in these areas has remained minimal.” That statement fails to acknowledge that tax incentives enacted at the state level effectively undermined the city’s zoning plan.

Not surprisingly, as the neighborhood was largely preserved physically, its residents became increasingly affluent. Households priced out of Park Slope and Windsor Terrace, both also frozen in time by restrictive zoning and historic districts, gravitated to the next neighborhoods south, pricing out yet others.

In the meantime, public transit investments are improving access.

The Metropolitan Transportation Authority is seeking to upgrade the antiquated interlocking of subway tracks at DeKalb Avenue in Downtown Brooklyn, which sorts trains to the north and south sides of the Manhattan Bridge. At the same time, the IBX will provide new transit connections to numerous subway lines, LaGuardia and JFK Airports, and eastern Long Island.

DCP has an opportunity to allow the housing stock in this area to grow, to meet the needs of all Brooklyn residents. Rezoning should include, but not be limited to, areas where no housing is currently allowed. The small homes that have not been included in historic districts do not need to be preserved.

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The land-use pattern in this area offers the potential for a mix of small and large multifamily buildings, for sale and for rent, subsidized and unsubsidized, accommodating a diverse population. The Mamdani administration should demonstrate planning wisdom and ideological flexibility and allow that to happen.

After more than three days, the Long Island Rail Road strike is over. Governor Kathy Hochul announced Monday night that the MTA and five LIRR unions had reached a “fair” deal that won’t result in higher taxes or fares—at least in the short run. Service has resumed, but the strike will affect MTA’s ability to fund future labor agreements.

LIRR workers enjoy the highest pay of any commuter-rail system in the country, thanks in part to overtime, which accounts for 22 percent of the railroad’s payroll. As MI’s Ken Girardin has pointed out, in 2025, over 328 LIRR employees earned more than $100,000 in overtime alone, while 168 made more in total pay than Hochul’s $250,000 salary, and 25 hauled in over $300,000.

Antiquated work rules have become sacred cows for union bosses, in part because workers have come to expect the opportunities for extra pay. One of the most egregious “penalty pay” provisions grants train engineers an extra day’s pay if they operate both a diesel and an electric train during the same shift. Another gives a full day’s pay for moving a passenger train to a yard after service. Those provisions stack, so an engineer could theoretically be paid for three eight-hour days after working a single shift.

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Unsurprisingly, LIRR fares are also much higher than the subway and bus’s flat $3. LIRR’s monthly fares top out at nearly $500, while the subway system has a $35 weekly cap, or about $140 monthly. Hochul warned that accepting the railroad unions’ demands would cause fares to spike 8 percent.

Before the strike, management and labor had agreed on a cumulative 9.5 percent raise, effective retroactively, for 2023 through 2025. Unions demanded 5 percentfor 2026, while LIRR offered 3 percent and a $3,000 lump sum payment, in exchange for productivity concessions. More recently, LIRR offered a lump sumpayment of 4.5% for 2026, which union bosses rejected as a “one-time gimmick.”

The final deal, whose details still require MTA’s confirmation, provides a 2026 raise of 4.5 percent, in exchange for workers forgoing pay on up to 16 hours of Computer Based Training (CBT). There were no other changes to work rules or overtime provisions.

After holding out against union demands for months, Hochul provided reason for hope that she could reform some of the LIRR’s structural cost drivers. Because she doesn’t face a primary challenger, she had a freer hand to force concessions on the unions in exchange for a deal. While she could have held out for more, she also had good reason to stop a strike from hampering the downstate economy, particularly ahead of the Memorial Day holiday.

In short, Hochul continued the status quo, while securing modest savings compared to union demands. The biggest missed opportunity, therefore, is forgone productivity. The work rules that have made LIRR operations outdated and inefficient will remain in place, save for the CBT giveback.

Nonetheless, it’s good that Hochul stood up to the union bosses, and not all hope for reform is lost. The new contract will expire in August 2027, giving her another chance to renegotiate work rules in her likely next term. But as now, doing so will involve confronting militant unions that won’t give an inch unless she shows real mettle.

Despite a less-than-ideal situation this time, the governor sent the important message that she will not capitulate to unreasonable labor demands. That should strengthen her hand in future bargaining rounds with the Transport Workers Union Local 100 and the approximately 40,000 subway and bus workers it represents.

As Girardin and I wrote in the New York Post, the LIRR fight was never just about the LIRR. Because LIRR is governed under federal law, its unions are legally authorized to strike, giving them leverage that most MTA workers do not have. TWU Local 100, which represents subway and bus workers, cannot legally strike under New York’s Taylor Law. An illegal walkout could subject the union to potentially crippling penalties and even jail time for the leaders who authorize it.

So the TWU had every reason to support a richer LIRR deal that could “set the pattern” for its own negotiations. That’s why Hochul’s holding the line mattered so much, not only for the LIRR contract, but to prevent an unsustainable precedent from rippling across the entire transit system.

The LIRR strike imposed real economic costs and inconveniences, but the public didn’t exactly rally to the side of railway employees seeking additional concessions from riders and taxpayers. Plenty of left-of-center transit advocates saw through the unions’ absurd requests.

By contrast, many New York Republicans, including Nassau County Executive and gubernatorial candidate Bruce Blakeman, irresponsibly swallowed the union line wholesale. They found themselves on the same side of the picket line as Democratic Socialists such as Assemblymember Claire Valdez. She marched alongside striking railroad workers, many of whom live on Long Island and likely support the MAGA movement. Blakeman, for his part, parroted union leaders’ gripes that there was “no money” for Long Island because of funding that had been going to illegal migrants.

LIRR’s already generous pay, along with management’s agreeing to most of the unions’ demands, make these claims unfounded. In any event, the migrant crisis, whatever its costs and mismanagement, has no reasonable relationship to the LIRR strike. Most of that spending was borne by the city, not the MTA, and couldn’tbe substituted to pay for railroad labor contracts. Besides, LIRR wages require recurring revenues, and the migrant crisis’s recurring budgetary pressure has diminished.

The governor deserves credit for refusing to give the unions everything they wanted, and for getting the trains running again ahead of a major holiday weekend. The price of peace was letting the old rules roll on.

Watch above, and listen (and subscribe!) to The Bigger Apple podcast.

Mamdani’s Budget Balancing Act

Mayor Zohran Mamdani presented his executive budget this week, balanced through a mix of temporary fixes, outside help, and a fair amount of optimism about what comes next. How exactly did he balance the books? Is the city in a better place? MI’s Eric Kober takes a look. The final budget will now be negotiated with the council.

“Balancing the budget is, of course, the mayor’s job, by law. Mamdani deserves credit for submitting a credible financial plan. Despite his inexperience, he has mastered the process and successfully worked with the governor and the legislature to get the budget relief he needed. But his plan is good for just one year,” Kober writes. “If he had listened more to the budget critics, less trouble would be in store for the future. Depending on unfolding events, many beyond his control, working people may still find their benefits under serious strain.”

Read the full story

Hochul’s New Taxes

There is a bit more clarity this week on the tax to be levied on nonresident second-home owners in the city - the so-called pied-à-terre tax. Intended to help Mamdani balance the city’s books, it is expected to be included in the final state budget, along with an additional tax on cash purchases of properties over $1 million. Between the two, officials estimate annual revenues of more than half a billion dollars, though the city’s comptroller warns the actual numbers may be lower.

Bad Arguments Against Self-Driving Taxis in NYC

Autonomous vehicles are already operating in major American cities, and New York cannot avoid them indefinitely.

The city’s political class remains wary after the disruptions caused by Uber and Lyft, with concerns centered on labor displacement, safety, congestion, and corporate influence.

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The objections are serious but manageable through policy, and the city already has tools like congestion pricing, service mandates, and licensing rules to shape outcomes. The issues here center on the city’s capacity to regulate and the political challenges posed by the unions.

Other states are already embracing AV technology, and federal action could eventually limit local control. New York’s leaders should act now to build a regulatory framework that permits testing, integrates AVs with transit and ensures the technology serves the public interest rather than simply corporate priorities.

Read the full story

Related:

• Erik Engquist had a piece in TRD on how AVs could shape the physical city, and on the role of unions in blocking progress.

• Works in Progress offers an interesting take on how to think about pricing autonomous vehicles: “Escaping the Ogallala trap.”

Street Vending on Canal Street Is Out of Control

“What exists now is a failure of basic public space,” a frustrated Manhattan resident opines in Streetsblog.

We discussed this issue on the podcast earlier this year.

“Canal Street is one of those places that I think you can make a strong argument has simply been lost,” MI’s Rafael Mangual argued. “And how do we know that? Well, because it’s constantly home to visibly illegal conduct on a daily basis, and no one seems scared of enforcement, and no one seems to be willing to do anything on the enforcement side. So I don’t know how else you could define who controls a strip, if not for that, but it seems very clear to me that the city has obviously lost control of Canal Street.”

NYC’s Expensive Empty Schools

The city’s public system is designed to educate more than 1 million students, a number last achieved before the pandemic. Enrollment this school year was just 884,400, and is projected to keep falling, a result of demographic change and parental choice. Meanwhile, the city keeps operating as if nothing has changed, keeping schools “harmless” as their student numbers fall, costing taxpayers hundreds of millions a year. (School budgets used to change based on enrollment.)

“If the city merges half its under-enrolled schools and brings the per-pupil spending at the newly merged schools in line with average spending, the city would save at least $108 million every year—and even more, after factoring in building and maintenance costs,” MI’s Danyela Souza Egorov writes in a brief on What to Do About NYC’s Empty Schools.

Extra! Extra!

• Prof. Ed Glaeser on “the perfect city”, a great conversation.

• The New Yorker takes a look at the role neighborhood newsletters play in our communities.

• The New York Times on the many young adults who struggle to afford their dreams in NYC.

But New York’s political class, planners, policy wonks, and journalists are resistant to change, cautious after the upheaval caused by the ride-hailing expansion of the 2010s, and skeptical of trends that don’t start here.

Mayor Zohran Mamdani has a positive vision for transportation — he has revived stalled bike and bus lane projects. But here, technology threatens a constituency that delivered his margin of victory: he went on a hunger strike with taxi workers in 2021, and has not left that political moment.

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There are four main objections to self-driving taxis: that they’ll throw for-hire vehicle workers out of work; that they’re dangerous; that AVs will increase congestion; and that they’ll hand New York’s streets over to a corporation.

On The Bigger Apple Podcast, I recently spoke to my co-host Nicole Gelinas, “Gridlock Sam” Schwartz, and Kelly McGuinness, who runs the Sam Schwartz Transportation Research Program at Hunter College, about autonomous vehicles and New York. None of them is reflexively anti-AV; all argue that the technology should be regulated before deployment rather than after, and that it has the potential to be good, especially if integrated with transit. They raised a range of serious concerns and suggested, reasonably, that New York can afford to watch and learn from the experiences of other cities.

But by claiming that no city is quite like New York, we tend to dismiss these experiences. Many major cities in America have permitted autonomous vehicles, and their citizens choose to ride them, not least because they perceive them as safer. New Yorkers should not be denied that choice indefinitely, and unless we test, we will never know.

These objections deserve to be taken on their own terms.

Thousands of drivers will lose their jobs

There are roughly 180,000 licensed for-hire vehicle drivers in the city, for whom driving has long served as a primary path to economic opportunity — a substantial political force, and a significant share of the city's labor market. The fear of impact on this workforce is real, and pretending otherwise would not be a serious response.

If one accepts the inevitability of technological change, the solution points toward proactive management of the transition rather than prohibition. Change will not happen overnight. New licenses can be issued over months and years. New kinds of work will likely emerge, including around maintenance, safety, and oversight. Worker retraining funds could be created from AV license fees. As New York’s planners like to remind us, there’s a recent precedent — the Uber and Lyft-driven upheaval of the late 2010s.

But there’s also precedent for what happens when the response is to refuse the technology indefinitely — and that’s the failure to modernize New York’s subway system, driven in part by rigid labor and operational practices.

As TWU International President John Samuelsen put it: “The 1960s version of Abundance bros was saying it’s inevitable that there will be fully automated operation of the NYC subway,” the City & State reports. “Forward flash 60 freaking years, and there’s still a two-person train crew. That’s because of the union.”

The right time to engage with new systems is before they are at scale, not after.

AV Safety Record is Questionable

This is the objection most dependent on still-limited empirical evidence and unresolved questions about what counts as “safe enough.”

Findings published in peer-reviewed journals suggest that Waymo vehicles are involved in substantially fewer serious injury crashes than human drivers in similar operating conditions.

But autonomous vehicle deployment remains geographically limited, is yet to be tested in dense urban environments like New York, and AVs have not yet accumulated enough real-world miles to definitively establish long-term comparative safety, something Waymo is complementing with billions of simulated miles.

Public tolerance for machine error is likely to remain lower than tolerance for ordinary human negligence.

Another objection is that New York is very different from other cities.

New Yorkers don’t behave the way other Americans behave. We don’t stand on the corner and wait for the walk signal. We cross where we want. We stand in the first lane. We jaywalk. Yet the city’s casualty rate per mile driven is the lowest of any major American city, arguably in part because of that chaos. Autonomous vehicles, which are programmed to obey rules, cannot model the unwritten ones New Yorkers actually follow.

The city has, for decades, built its streets in ways that prioritize cars. Jaywalking is a rational response to infrastructure that punishes compliance.

Traffic deaths peaked at 701 in 1990. Last year, there were 205, widely attributed to the success of Vision Zero – speed cameras, red light cameras, leading pedestrian intervals, shorter crossing distances created by bike and bus lanes, and lower speed limits.

But changes that calm the streets and make rules easier to follow also make the streets more welcoming to vehicles programmed to obey rules.

The argument that it just won’t work in New York, even if it works in San Francisco or London — well, we will never know until we try it, especially if our environment, as is claimed, is so unique.

Other concerns center on blackouts (which, by the way, also affect the subway), system failure, remote operators, terrorism, data privacy and security issues, as well as liability — more will inevitably arise as the technology gets deployed.

Autonomous systems do introduce more centralized risk, but they also introduce new forms of control. A human driver can make unpredictable decisions; a networked fleet can be monitored, constrained, and shut down.

This is not a choice between risk and no risk. It is a choice between different risk structures, and the responsible way to evaluate them is with data the city does not currently collect.

Congestion Will Get Worse

Critics are right that adding a new mode of vehicle travel adds new vehicles to the road, but it does not follow that it should result in more congestion if aggressive road management is implemented. Absent pricing and road management, AV fleets could worsen congestion, much as ride-hailing did in the 2010s.

New York’s streets are scarce public goods that must be priced and managed. The demand for fast, flexible, door-to-door service is real – people pay for it even during surge pricing. Time is valuable in New York City. The average American worker spends just under an hour commuting each day, and New Yorkers have some of the longest workweeks and worst commutes.

And yes, sometimes that demand will pull from public transit, especially when the alternative provides a superior service. The person who needs to make work calls will not be on the subway or a bicycle. The elderly or disabled rider is more likely to be on the bus. The young professional decides whether the weather and her clothes are better suited to a bicycle or the subway. A multitude of considerations go into which mode of transportation one chooses at any given time, and a good system provides and prices such alternatives to maximize efficiency.

Transit remains the backbone of the system as it is the only mode capable of moving millions of people efficiently. But it is not a complete solution, and the city’s goal isn’t simply to get as many people on the subways as possible — it’s to help its citizens lead their best lives. The current transit system is designed to move people into Manhattan, ignoring much of the inter- and intra-borough needs. This is one reason why car ownership remains high in the outer boroughs, and why more efficient, AV-integrated fleets might provide better service to the people who have no other way to get around when or where the demand is low.

The real threat to transit is not competition; it is unpriced or poorly priced competition. Congestion pricing is the natural policy response, and explicitly linking AVs to new revenue for public services could make those charges more politically palatable.

Corporations will rule the streets

Like Uber and Lyft in their day, AV publicists like to talk up ways their companies can make positive social change for people in hard-to-reach places or with disabilities. The public appears receptive: polling commissioned by the Chamber of Progress in 2025 found 71% of New Yorkers believe AVs will particularly benefit elderly and disabled residents, and a majority support expanding AV testing and availability in the city.

Still, officials’ concern here is that companies will prioritize high-demand areas, often in Manhattan, in ways that may not align with the city’s broader goals around equity. This is not a new problem and is precisely what regulation is for. The city already has tools to address it — pricing, caps, service requirements, and data-sharing rules, among them.

The constraint is whether the city has the willingness and capacity to use them.

The incentives of the various stakeholders, and their relative powers, do not line up with the public good of moving as many people as possible safely and efficiently. Companies are driven by profits, labor by job protections, and politicians by their reelection prospects.

The choice in front of the city

New York law currently requires drivers to keep “at least one hand on the wheel” — meaning companies like Waymo cannot even begin driverless testing here, let alone commercial service. (Waymo’s NYC and state testing permits expired at the end of March, and are yet to be renewed.)

Waymo is now operating commercial service in 11 metro areas, including Dallas, Houston, San Antonio, Miami, and Orlando — all in Republican-dominated Texas and Florida, chosen for their favorable regulatory climates. If all goes according to plan, Waymo will be operating in more than 20 cities by the end of 2026.

New Yorkers travel. They come back having experienced a service they can’t get here. Meanwhile, a bill that may lead to federal preemption of some local regulation is already moving through the House. The question is not whether New York faces this, but how soon, and on whose terms.

One thing is obvious, though: Mayor Mamdani, Governor Hochul, and other city and state leaders should insist on extensive pilots and begin building the regulatory framework now, while the city still has the opportunity to shape the technology on its own terms.

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A decade of the City Council’s unfunded mandates has run up a tab of more than $7.5 billion. Public sector pension sweeteners may be heading for your property tax bill. New York's political landscape has settled into something resembling a three-party system. That, and more, in this week’s newsletter.

Reihan Salam: What’s the Opposite of Mamdani?

In a wide-ranging WSJ profile, MI’s president Reihan Salam lays out the case against Mayor Mamdani's "punitive egalitarianism" and "tin-cup urbanism," points to MI scholars’ work taking on the mayor (Nicole Gelinas on fiscal and public-safety assumptions, Eric Kober on the city-run grocery plan, Rafael Mangual on public order), and talks about the future. (Gift article.)

Unfunded Mandates: $7.5 Billion

The City Council routinely passes legislation creating new spending obligations with little regard for how the city will pay for them.

To better understand the full cost of mandates and legislation passed by the Council, Tal Roded aggregated fiscal impact statements required of all new legislation into the NYC Council Fiscal Impacts Tracker, finding that unfunded mandates over the last decade exceeded $7.5 billion. CityFHEPS, Streets Plan, and mandates on payments to school paraprofessionals alone have added over $6 billion in expenses to the city budget in the past five years.

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“While in some cases these new expenses are offset by new revenue included in the legislation, 97% of the local laws in the tracker state only that funding will come only from the General Fund, meaning no dedicated funding source to cover the new expenses. This effectively kicks the can down the road, severely constraining future mayoral administrations’ ability to introduce new policies as unfunded commitments from prior legislative sessions continue to accumulate,” Roded writes.

Read the full story.

New York City’s Emerging Three-Party System

An interactive dashboard created by MI’s Jack Santucci shows how fusion voting and political fragmentation are reshaping our city elections.

“New York City’s recent council elections suggest a de facto three-party system, driven by cross-endorsements and growing competition on the left and right, that is straining rules built for two parties,” Santucci writes. “On the ballot, the fragmentation shows up as distinct blocs: Democratic–Working Families candidates, regular Democrats, and Republican–Conservative tickets, along with smaller parties that can still win an occasional seat. In practice, voters are not choosing between just two parties but among overlapping coalitions.”

To better understand what’s happening, read the whole story, and to see for yourself, check out the dashboard here.

Podcast: Let’s Talk About Housing

Earlier this week, Nicole and I explored rent regulation, why we are not building six-story rental buildings anymore, how NYC absorbs new immigrants, and many other questions with MI’s pre-eminent housing expert, Senior Fellow Eric Kober, former director of housing, economic and infrastructure planning at the New York City Department of City Planning.

Watch the video above or listen to the podcast.

From City Journal

Governor Hochul's decision to opt New York into the federal Scholarship Granting Organization tax credit tucked into the One Big Beautiful Bill is the right one, MI’s John Ketcham writes.

Starting next year, taxpayers can claim a $1,700 credit for donations to SGOs, which fund scholarships, tutoring, and educational expenses for families earning up to roughly $437,000 in NYC. The funds also cover after-school programs and tutoring for public and charter school students.

City Journal Substack

Hochul Chooses Kids Over Unions

Governor Kathy Hochul just did something rare in New York education politics: put students ahead of the teachers’ unions. Last night, Hochul announced that she would sign up New York State for the One Big Beautiful Bill’s tax credit for Scholarship Granting Organizations (SGOs). Hochul deserves real cred…

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a month ago · 2 likes · John Ketcham

Pension Sweeteners — and What They Mean for New Yorkers’ Property Taxes

MI’s Ken Girardin explains:

Ken wrote about this earlier this year: How Would You Like to Retire at 55 — for Free? More of New York’s Public Workers Soon May.

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(Top image: Michael Appleton/Mayoral Photography Office)

As a member of my community board, I have the pleasure of attending monthly full board meetings. At these meetings, local representatives or their liaisons from City Council members to State legislators provide whatever updates they so wish, typically on legislation the elected official has introduced or recently had passed.

Initially, I was greatly impressed by the parade of bills and resolutions being touted. As the procession repeated itself with each passing meeting, however, I began to wonder why all our City’s problems weren’t fixed yet, given the impressive volume of legislation being passed in the City, State, and federal chambers.

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As I began having conversations with workers at city agencies and political advocates doing on-the-ground work, a more complete picture of these policies emerged.

While agencies often supported the policies being passed, they were frequently exasperated with the burden of new work being piled on without resources to implement them. These unfunded mandates ultimately undermine public trust in government effectiveness when the law says one thing, but the government is unable to enact or enforce it.

City Council Fiscal Impact Statements

Since the passage of the current New York City Charter in 1989, which abolished the Board of Estimate and massively expanded the City Council’s role in NYC governance, some version of fiscal impact statements has been required to vote on proposed legislation.

The New York City Charter requires that all proposed local laws and budget modifications must be accompanied by estimates of “the fiscal impact of the law or modification on the revenues and expenditures of the city” for the fiscal year the legislation would become effective, the following fiscal year, and the fiscal year in which the “full impact” of the legislation is expected to occur.

Regarding the accuracy of these estimates, however, the Charter is much more forgiving: “If the estimate contained in a FIS is inaccurate, such inaccuracy does not invalidate the local law or budget modification”.

Critically, appropriating the funds to cover the expenditures outlined in the FIS is not required, and while the costs of new legislation must be identified, they can thereafter be ignored by the Council. An FIS can acknowledge that a proposed local law would entail massive budgetary expenditures, yet no funding or revenue sources for the legislation are specified.

Introducing The City Council Fiscal Impact Tracker

Despite the limitations, these Fiscal Impact Statements provide a starting point for measuring the costs of new legislation. But it is not easy, as they are provided in unstructured Word document attachments on Legistar.

To better understand the totality of the potential costs of mandates and legislation being passed by the NY City Council (NYCC), I aggregated all fiscal impact statements since 2014 into the NYC Council Fiscal Impacts Tracker.

The tracker parses available FIS1 to break them down into the estimated revenue, expenses (operational and capital), and net fiscal impact of the associated local law.

Of the 1,563 fiscal impact statements in the Legistar API for Jan 2014- Apr 2026, 219 were added to the table. The FIS not added to the table were either because both revenue and expense impacts were zero (1,108 cases), no revenue or expense impacts could be found/extracted by Claude (183 cases), or there were duplicates with proposed bills and enacted local laws (~90 cases).

What The Data Tells Us About New Costs

Even with the limitations to what data could be scraped, the database contains over $7.5 billion in net fiscal impact (operational expenses + capital expenses - revenues) for City agencies introduced by Council legislation between 2014 and 2026.

The Council’s unfunded legislation had the biggest financial impact on the Department of Social Services through CityFHEPS, on the Department of Transportation through the Streets Plan and on the Department of Education (DOE) through mandates on payments to school paraprofessionals. These three policies alone have added over $6 billion in expenses to the city budget in the past five years, and no new revenue or specified source of revenue.

This is similarly reflected when looking at the net fiscal impacts of Council legislation by agency: DSS ($4.1 billion) and DOT ($2.4 billion) far outweigh the others, with DOE and HPD each carrying over $250 million in added expenses.

Without these four agencies, costs are much more evenly distributed – there remain 139 bills with over $500 million in net expenses, primarily operational. Interestingly, DCA is one of the few agencies with a revenue-positive net fiscal impact, receiving nearly $20 million in new revenue from eight relevant local laws, offsetting expenses.

While overall expenses added to these agencies are much smaller, total agency budgets are also much smaller, so that the proportional impact of the legislation remains large. For many affected agencies, the added costs from the past decade of legislation are at or near the total agencies’ FY2025 budget.

While in some cases these new expenses are offset by new revenue included in the legislation, 97% of the local laws in the tracker state only that funding will come only from the General Fund, meaning no dedicated funding source to cover the new expenses.

This effectively kicks the can down the road, severely constraining future mayoral administrations’ ability to introduce new policies as unfunded commitments from prior legislative sessions continue to accumulate. That’s also why NYC now faces exploding budget gaps in upcoming years, as well-intentioned but unfunded programs like CityFHEPS and the Streets Plan eat up fixed revenue streams, problems that MI’s E. J. McMahon warned about back in 2024.

Reviewing the current litany of mandates facing every agency and their yearly costs could also identify where the largest cost savings exist, on a much larger scale than what the Mayor’s Office shared from the Chief Savings Officers’ plans. Eliminating outdated, unnecessary, or redundant mandates would be a double win, enabling agencies to move faster and more effectively while reducing costs.

The lack of accountability for these expenses, which accumulate each year, explains why the City is frequently unable to comply with the new mandates. If DOT’s budget is not raised to cover the new costs from the Streets Plan mandate, along with other rising expectations for DOT’s curb management and ongoing costs, it is to be expected that the agency will not deliver on its goals.

Holding Legislators Accountable

The 2024 Charter Revision ballot proposal was a good start to add more teeth to FIS. These new rules make FIS more accurate and a more prominent part of the debate over proposed legislation. A better understanding of the true costs of new mandates would force Councilmembers to face the trade-offs of endless new rules and regulations for City agencies. But these adjustments to the FIS rules did not go far enough.

In an ideal world, Councilmembers would not introduce new legislation without specifying where the funding to enforce or carry it out would come from, and would work with agencies to determine the most cost-effective way to implement it. There could be exceptions to such a rule, such as applying only to legislation with expected fiscal impacts above a certain threshold.

In reality, however, Councilmembers are incentivized to introduce as much legislation as they can, to show their constituents their hard work and make the case for their re-election.

But hopefully, this tool can serve as a basis to hold City legislators accountable for new expenses they introduce.

In California, state legislators last year announced a program called Outcomes Review, which will look back at a sample of legislation passed by the State Assembly and review whether the outcomes of that legislation aligned with their intentions. The goal is to shift legislators’ focus from maximizing legislative output to maximizing the impact of legislation.

Maximizing the number of new bills introduced or passed in a session should not be the target for legislators; ensuring that each introduced bill addresses a real problem with a solution that can actually be carried out by the implementing body would be a better goal.

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Constituents armed with the knowledge from this new database can and should contact their legislators and hold them accountable for providing additional funding to the affected agencies. The Council and the Mayor’s office, together, can and should also be pressured to provide the necessary funding for existing mandates before introducing new ones. Accountability should not stop once legislation is passed; properly funding and ensuring policy implementation is just as, if not more, important.

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New York City’s recent council elections suggest a de facto three-party system, driven by cross-endorsements and growing competition on the left and right, that is straining rules built for two parties.

On the ballot, the fragmentation shows up as distinct blocs: Democratic–Working Families candidates, regular Democrats, and Republican–Conservative tickets, along with smaller parties that can still win an occasional seat. In practice, voters are not choosing between just two parties but among overlapping coalitions. (Check out the dashboard here.)

Fragmentation is greater than what the city’s rules predict.

Efforts to measure fragmentation often start with the “effective” number of electoral parties (ENEP). Political scientists use this index to count parties while accounting for their sizes. Consider three with 52, 45, and 3 percent of votes, respectively. Should we call this a three-party system, or would it be more accurate to say “a little more than two”? Taking the inverse of the sum of the parties’ squared vote proportions gives us 2.11.

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ENEP in the last council election was 3.3. This is based on votes for parties as they appear in the data. So, if a candidate appeared with two parties’ endorsements, I treat that endorsement combination as a party of its own. The largest party by votes was Democratic-Working Families (39%), followed by regular Democrats (35%), then Republican-Conservatives (14%). There are other parties in the data, two of which won one seat each.

Another way to look at the data is to treat votes for fusion candidates as votes for their major-party endorsers. For example, Democratic-Working Families votes count toward Democrats, and Republican-Conservative votes go into the Republican column. Computing ENEP in this way gets us to 1.6.

Which measure is better?

Some might say the former because it contains information on how parties presented candidates to voters. The New Republic recently described Working Families as “the third party that’s pushing the Democrats left.”

Another approach is to ask what figure the current electoral system is expected to produce. The seat-product model (SPM) calculates this expectation on the basis of council size (51 seats) and the average number of seats per district (one). That figure is 2.7, closer to the observed ENEP. This is not surprising because the SPM assumes voters act on how parties present themselves. Yet 3.3 is still much greater than 2.7.

Fragmentation extends into the City Council as well. There, the effective number of legislative parties is 2.6 versus an expected 1.9.

Disproportionality is considerable as well.

The Gallagher index summarizes differences between parties’ shares of votes and seats on a scale of 0-100. Its value at the last council election was 7.3 percent. Globally, this is moderate. The highest values concentrate in countries with very small parliaments or where many minor parties have been running under first-past-the-post. For the U.S., however, 7.3 percent is appreciable. The index value was 0.82 percent in the 2024 election to the U.S. House.

Why are Big Apple voters demanding more parties than their institutions can supply?

Reasons include an increasingly competitive Republican Party, an active Conservative Party that endorses some Republicans and even Democrats, plus other cross-endorsement combinations with enough support to win a seat or two. Above all, the regular Democratic and Republican parties ran candidates in many parts of the city rather than just districts that seemed winnable in retrospect.

The map below gives a sense of the geography of voting.

It shows district-level vote shares for four groups of parties that win seats under various simulations (more on those in a moment).

The left bloc comprises Democratic-Working Families endorsees and had the most geographically concentrated support. No candidate in this group got fewer than half of the votes.

The right bloc comprises Republican and Republican-Conservative candidates. This group earned the full range of votes in the districts where it ran. Support for regular Democrats similarly ran the full range.

“No votes” means that the respective party grouping did not have a candidate in the district.

A new interactive website lets users explore results, individual winners, and the indices just described under different electoral systems.

The first tab covers first-past-the-post (FPTP) with a 51-seat council.

The second covers open-list proportional representation (PR) with borough-wide districts of many seats each. In that system, votes for candidates also count for their parties’ lists. Seats are allocated to lists in proportion to their shares of votes. Then these seats go to candidates in descending order of their vote totals.

A third simulation covers mixed-member PR (MMP) based on the existing map of 51 single-seat districts, plus 20 “compensation” seats allocated to parties on a citywide basis. Compensation seats are used to make parties’ seat shares as proportional as possible to their vote shares after accounting for seats already won in the district races. The website default is 20 compensation seats. A forthcoming Manhattan Institute issue brief explains these simulations in detail.

Users can toggle several features of each simulation. For both PR systems, they can choose between two rules for allocating seats to parties. One prioritizes larger parties, and the other aims for a tighter fit between votes and seats. On the MMP tab, users can toggle the number of compensation seats up to 50 (effectively doubling the size of the City Council) or down to zero (duplicating FPTP).

Here are a few interesting points from the simulations.

No configuration changes council control because that depends on how parties decide to organize the chamber. Rather, each PR model (and variant thereof) makes minor adjustments to the relative balance among parties. Both PR simulations bring regular Republicans into council: one under borough-wide OLPR, three under MMP with the 20-seat compensation tier. Switching to the more proportional allocation rule in OLPR gives regular Republicans two seats instead of one. Under FPTP, only Republicans with Conservative Party endorsements win seats. The Democratic and Democratic-Working Families parties are neck-and-neck across configurations. All parties trivially get more seats when council size expands.

As for indices, all PR systems unsurprisingly reduce the Gallagher index, and switching to the more proportional allocation rule does so even more. OLPR also increases the expected effective numbers of parties. This is because the average number of seats per district increases; recall that the SPM rests on this value, plus assembly size. MMP keeps the expectations lower because a substantial share of districts have just one seat each. However, the SPM for MMP is still experimental.

We are excited to share the simulation with the public. Again, it is impossible to say whether New York City’s new three-party system is temporary, and we look forward to reporting on the situation as it unfolds.

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