S&P Warns NYC Finances at Risk Under Mayor Mamdani

Credit rating agency says city's plan to drain reserves could lead to downgrade.

Mar. 13, 2026 at 4:10pm

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S&P Global Ratings has joined Moody's in raising concerns over New York City's budget plan under Mayor Zohran Mamdani. The agency warned it may downgrade the city's credit rating if Mamdani moves forward with draining the city's financial reserves to balance his $127 billion proposed budget. S&P said this could leave the city vulnerable to economic downturns or federal funding cuts.

Why it matters

A credit rating downgrade would significantly increase the city's borrowing costs, creating a major financial challenge. S&P also cautioned that relying on state bailouts may not be feasible, as New York state faces its own budget pressures.

The details

S&P said the city has previously shown resilience in weathering fiscal challenges, but warned that 'downside risk' to the city's AA credit rating could materialize if Mamdani relies on 'nonrecurring budget solutions' and allows the city's reserves to 'erode to a point where its capacity to absorb an economic downturn or a federal funding shock is materially diminished.' The agency also said it may not be wise for the city to count on Albany for a bailout, as the state has its own future budgetary issues.

  • On March 13, 2026, S&P Global Ratings issued its warning about New York City's finances.

The players

Zohran Mamdani

The current mayor of New York City who has proposed a $127 billion budget that would drain the city's financial reserves.

Kathy Hochul

The governor of New York who has repeatedly refused to raise taxes as requested by Mayor Mamdani.

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What’s next

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The takeaway

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