$127 Billion for One City. Worse Outcomes Than Houston.

Blue cities are out of control. That’s not a Republican talking point. That’s CNN’s Fareed Zakaria, a center-left columnist who watched NYC Mayor Zohran Mamdani unveil a $127 billion budget and decided enough was enough.

The numbers are brutal. NYC’s budget equals the annual expenditure of Greece or Thailand, devoted to governing one city. That budget doubled in a decade, from $70 billion in 2014 to $127 billion today. During the same period, the city’s population fell 5%. Larger bill, fewer payers. Per-capita spending is 30% higher than LA and double Houston, for worse outcomes across the board.

The $35,000 Student

NYC’s education budget tells the whole story. It grew from $34 billion to over $40 billion while enrollment shrank. Per-student spending is projected to reach $35,000 in 2026, among the highest in the nation. The outputs? Middling graduation numbers and test scores comparable to places spending a fraction of the cost.

San Jose, by comparison, spends $5,600 per resident total. One city is building housing. The other is building bureaucracy.

The Homelessness Money Pit

LA spent $950 million on homelessness for 2025-26. Homelessness surged 70% countywide since 2015. A $2.4 billion audit found officials couldn’t reliably track where the money went or what it achieved.

NYC tried throwing cash at housing too. Rental assistance spending went from $263 million in 2020 to $1.34 billion, a five-fold increase. Housing costs only got worse. Subsidies drove up the cost of rent, as subsidies naturally do.

California spent $17.5 billion over four years on homelessness while the homeless population grew. That’s not policy. That’s a money pit.

The Lurie Difference

Brad Gerstner, founder of Altimeter Capital, sees something different happening in San Francisco.

Mayor Lurie is fighting some serious grift from Supervisors Fielder, Walton, and Chan on the Board. He’s proposing to restructure homeless funding for flexibility, shifting resources toward treatment beds instead of rigid Housing First allocations that haven’t worked. He’s rounding up drug dealers, recruiting businesses, and actually reining in spending.

Compare that to Mamdani in NYC, who wants to hike income and corporate taxes even further on a city already at 55% combined marginal rates on investment income. NYC already has the highest combined corporate tax rate in the country at 17%. His response to fiscal dysfunction is more of the same.

Build, Don’t Subsidize

Zakaria cites Matt Yglesias on the solution: make it easy and routine to build abundant market rate housing. That brings in more people, expands the tax base, fills the schools, and increases local GDP. That makes budgets affordable.

Matt Mahan in San Jose proved it works. He built 2,000+ housing units in 2025 versus zero market rate units the year before. Cut unsheltered homelessness 23%. Created 1,000+ interim housing beds at $18,000 per year, a fraction of what San Francisco pays.

The choice isn’t left vs right. It’s competence vs theater.

Zakaria’s prescription is simple: “Stop governing as if the goal is to announce new entitlements, and instead make government work. Safer streets, functioning schools, predictable sanitation, and above all, enough housing that the middle class can find places to live.”

Lurie is trying to do exactly that in San Francisco. The question is whether voters in NYC, LA, and Chicago will demand the same, or keep doubling down on the approach that’s bankrupting their cities while making them less livable.