Connect with us

Accounting

Mamdani’s promises are on a collision course with fiscal reality

Published

9 months ago

on

During his campaign, New York City Mayor-elect Zohran Mamdani promised free childcare and buses, 200,000 new units of affordable housing and city-owned grocery stores, funded by raising taxes on corporations and the wealthy or borrowing. 

Those pledges, which powered him to a decisive win over former New York Governor Andrew Cuomo, now meet fiscal and political reality.

While Mamdani proclaimed his victory “a mandate for a city we can afford” in a speech late Tuesday after securing a majority of the vote amid the highest turnout since 1969, any new taxes to fund his agenda need the backing of the state, and Governor Kathy Hochul has said she’s against such hikes.

Political observers say Hochul could placate Mamdani by funding lower-cost priorities such as free buses — estimated to cost nearly $1 billion — while making a down payment on his signature proposal: free childcare.

Hochul has said she supports the goal but warned of its price tag.

“If you do it in its entirety in one year for New York City alone, it’s a $7 billion price tag,” Hochul said at a press conference in September. “I have to double that for the rest of the state. So we had conversations along the line of how you get to that place someday, but you manage the rollout over time.”

Hochul said in a congratulatory post on X late Tuesday that she had spoken to Mamdani and told him she was “looking forward to working together to make our city more affordable and livable.”

Mamdani, a Democrat, received 50.4% of the votes, while Cuomo, running on an independent line after his loss to Mamdani in the primary, garnered 41.6% with more than 90% of the vote counted. Republican Curtis Sliwa got 7.1%.

“The benchmark of winning a majority was set for him by many observers and even if you just barely clear that, clearing it matters,” said Evan Roth Smith, a Democratic pollster with Slingshot Strategies, a political consulting firm. “That will help when he goes to Albany, when he goes to the federal government, as he works with City Council. He can say, ‘I have a majority of New Yorkers on my side and supportive of my vision.'”

But Hochul won’t view the “mandate of the city as a mandate for Buffalo, for Long Island, for Oneida,” said Lupe Todd-Medina, a Democratic strategist, who warned that Mamdani’s win won’t guarantee him a political honeymoon period.

Massive deficit

Mamdani and his supporters want more government services; Albany, which controls the city’s taxing and borrowing power, will focus instead on sustaining existing ones. 

Hochul is contending with a $4.2 billion deficit, almost four times last year’s gap. Federal cuts to health care and food stamps will fall hardest on New York City, where Mamdani faces a $5 billion hole in next year’s budget. 

Mamdani, a 34-year-old democratic socialist from Queens, built a coalition around tenants, riders and young families. The son of Indian parents who immigrated from Uganda, he campaigned on the idea that government should shoulder more of the everyday costs that keep working- and middle-class New Yorkers on the brink.

“He’s going to have to modulate his messaging and figure out the priorities he has for the legislative session,” said Shontell Smith, partner and head of the New York practice at political consulting firm Tusk Strategies. “Nothing against him, it’s just the financial realities of New York State.”

Hochul, a centrist who resists broad tax hikes, likely faces a tough 2026 reelection against Republican Congresswoman Elise Stefanik, who’s expected to announce her bid for governor imminently. Stefanik has already signaled she will link Hochul, who endorsed Mamdani, to his policies. On Fox News’ Fox and Friends in September, Stefanik said the governor “owns” Mamdani’s positions like raising taxes and cutting spending on police.  

Still, with the fiscal pressures facing the state and city, Hochul may have to abide by some tax increases, according to interviews with Democratic lawmakers and political strategists. The Democratic-controlled legislature routinely pitches tax hikes in its proposed budget, which serves as a launching point for a final fiscal plan ultimately approved by Hochul.

Federal cuts to health care and food stamps will fall hardest on New York City, where Mamdani faces a $5 billion gap in next year’s budget.

“There are going to be tax increases, whether anybody likes it or not, at the very minimum, to recoup reductions in federal tax bills,” State Senator John Liu said in an interview, referring to the extension of President Donald Trump’s tax cuts. “The governor would not like to have new taxes in a reelection year, but she doesn’t want to have millions of people in New York not have insurance, not have health coverage.”

Mamdani wants to raise New York City’s income tax on earnings above $1 million a year by 2 percentage points — quadruple what former Mayor Bill de Blasio proposed for earnings above $500,000 — to pay for universal pre-kindergarten (de Blasio did not get the tax increase). Mamdani also backs lifting the state corporate tax to 11.5%, matching New Jersey and tied for highest in the US, from 7.25%.

The tax hikes — which would raise $9 billion, according to Mamdani’s campaign — risk driving top earners and businesses to lower-tax states.

New York already ranks 50th on the Tax Foundation’s State Tax Competitive Index. Republicans will likely wield any tax increase as a cudgel in next year’s congressional elections, especially in Long Island, where Democrats have faced tough campaigns. 

All told, Hochul still has incentives to work with Mamdani.

She faces a primary challenge from Lieutenant Governor Antonio Delgado, who is advocating for free childcare and building affordable housing similar to Mamdani’s platform and will be angling for his endorsement. If she defeats Delgado, Hochul will need Mamdani’s backing to shore up her left flank and avoid a third-party challenger in the general election.

“The governor’s going to want to give the incoming mayor a win,” Smith of Tusk Strategies said. “New York City is such a strong base for Democrats.”

Jack O’Donnell, an Albany lobbyist, said Mamdani will want early proof that he can deliver on his promises, while Hochul will welcome policies that improve affordability for middle- and low-income residents.

“Finding ways to help middle class and working-class New Yorkers really aligns between both Mamdani and Hochul,” O’Donnell said. “You see that most brightly in something that she’s been talking about her whole career, which is childcare. And I would expect that we’re going to see a real, concrete proposal in the state budget.”

State estimates put the price of universal childcare at roughly $14 billion annually, according to Hochul. She’s said she’ll look for “creative” ways to fund it.

When de Blasio took office in 2014, he proposed taxing the wealthy to fund pre-kindergarten. Then-Governor Cuomo resisted the increase, but he and the legislature agreed to fund the program without raising taxes — a compromise that could offer a model for Hochul and Mamdani. 

“The Democratic base has become more progressive, and I think wants to see bigger ideas from their leaders,” said Basil Smikle, former head of the New York Democratic Party. “Mamdani might find a much more receptive state legislature than de Blasio did, and he may find a more receptive governor.”

Related Topics:
Continue Reading

Accounting

Global ESG Reporting Standards and Double Materiality Compliance

Published

5 days ago

on

August 9, 2026

By

Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

Continue Reading

Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

Published

1 week ago

on

August 5, 2026

By

Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

Continue Reading

Accounting

Automated Tax Compliance and Global Regulatory Harmonization in 2026

Published

1 week ago

on

August 5, 2026

By

Corporate tax accounting departments are navigating an era of unprecedented regulatory complexity as global tax harmonization frameworks take full effect alongside real-time digital tax reporting mandates. Tax directors and accounting teams are adopting cloud-based tax compliance automation tools to manage multi-jurisdictional tax liabilities and satisfy stringent reporting rules across international jurisdictions.

Implementation of Global Minimum Tax Provisions
The implementation of international tax reform agreements—notably the Pillar Two global minimum tax framework—has reshaped multinational corporate tax planning. Multinational enterprises with consolidated revenues exceeding established thresholds must ensure an effective tax rate of at least 15% across every jurisdiction in which they operate.

Accounting teams are implementing specialized tax calculation modules integrated directly into enterprise resource planning (ERP) platforms. These automated tools calculate effective tax rates per country, identify top-up tax liabilities, and generate standardized compliance documentation required by national tax authorities.

Real-Time Digital Invoicing and E-Reporting Mandates
Tax authorities across Europe, Latin America, and Asia-Pacific have enacted mandatory electronic invoicing (e-invoicing) and continuous transaction controls (CTC). Under these systems, corporate transaction data must be submitted electronically to government portals in real time at the point of sale or invoice issuance.

This shift toward continuous digital tax reporting eliminates traditional annual tax audits in favor of ongoing automated compliance monitoring. Accounting departments are upgrading invoicing software to ensure seamless XML data formatting, digital signature authentication, and real-time validation against tax authority databases.

Automation and Data Analytics in Corporate Tax Strategy
To keep pace with dynamic tax legislation, tax departments are transitioning from reactive compliance teams to proactive strategic advisors. Machine learning algorithms analyze corporate transactional data to identify tax credits, research and development (R&D) incentives, and cross-border transfer pricing adjustments.

By automating routine tax return filings and calculations, corporate tax directors can focus on long-term capital structuring, evaluating the tax implications of corporate mergers, and optimizing international supply chain networks.

Strategic Priorities for Tax Executives
1. ERP System Upgrades: Ensure enterprise software is capable of generating real-time, granular tax data required for global minimum tax compliance.
2. E-Invoicing Integration: Implement scalable e-invoicing platforms to satisfy regional continuous transaction control regulations.
3. Strategic Tax Analytics: Utilize predictive tax modeling tools to evaluate structural changes in corporate operations and cross-border trade.

Continue Reading

Trending