New York City Mayor Zohran Mamdani released a city budget on Tuesday that completely eliminates what he has described as a $12 billion deficit left over from the Eric Adams administration, the largest gap since the Great Recession. The budget does not include the property tax increases Mamdani threatened earlier in the year or any new taxes on ordinary New Yorkers, and the mayor’s office says there are no cuts to city services for those in need.

Solving the budget riddle, which is still subject to negotiations with the city council and the resolution of a state budget that funnels billions to the city, clears a major hurdle that threatened Mamdani’s expansive agenda before it even got started. The mayor had planned for several new investments, including universal child care, free and fast city buses, a pilot of five public grocery stores, and much more. Some of these priorities are embedded in the new budget.

The deficit closure is achieved in part through addressing what Mamdani has called gimmicks and making more forthright assessments of what the city can bear. But it also adopts the kind of government efficiency critics often argue that democratic socialists refuse to provide.

“Many said the only way out of this was slashing services and passing an austerity budget. We rejected that,” Mamdani said in a video accompanying the announcement. “Our city is now on firm financial ground.”

Much of the budget hole was filled by changing the relationship between New York state and its largest city. Earlier on Tuesday, Mamdani and Gov. Kathy Hochul announced a total of $8 billion in state assistance for New York City over the next two fiscal years, achieved through reducing costs on the city while formalizing the expansion of universal free child care (worth $1.2 billion annually) and making investments in education and infrastructure.