Flash Insights: New York (City) state of mind—NYC mayoral election

On November 4, 2025, New York City voters will be electing a new mayor. We’ve been receiving a lot of questions from municipal bond investors about what impact this will have on New York City’s bonds and credit rating. Here is a summary of our thoughts.

Do we expect the election to result in a rating change?

No, the election of a new mayor specifically will not cause a rating change. Election promises don’t automatically equate to implemented policy. We and the rating agencies will wait to see what the new mayor can get implemented and what the resulting impact will be before deciding whether a rating change is necessary.

Is it easy for the new mayor to implement policy and tax changes?

No, in order to implement policy and/or tax changes, the mayor will need approvals from many other people. First, the mayor will need the cooperation of the city council. In many cases, policy and tax changes require approval from the state. And finally, New York City is subject to certain financial standards following the fiscal crisis of the 1970s.  These protections will help ensure budget balance or risk the state implementing a financial control board.

Can you elaborate on what triggers a financial control board?

The state of New York has a mechanism to implement a temporary fiscal control board, which is an independent state public benefit corporation that provides varying levels of oversight to assistance in the event certain triggers are met. In 1975, the Municipal Assistance Corporation was implemented to take over New York City, and it has been used in other cities, counties and school districts throughout the state. One important trigger the new mayor will need to be focused on is the balance budget requirement. The state could implement a fiscal control board if the city doesn’t pass a balanced budget and maintain it. This would require that the city avoid deficit operations. This means that the mayor cannot implement huge spending programs without making sure there is sufficient revenue (or other spending cuts) to ensure the budget is balanced. These triggers, in conjunction with the need to get approval from the state for many tax increases, will make it difficult for a new mayor to implement radical policies.

Summary

We have not changed our view on New York City’s rating or its ability to pay debt based on the potential of any of the current candidates ultimately winning the election. If the new mayor is able to implement policy changes that impact the city’s finances or economic condition, we expect any changes will be in line with the strict financial management guidelines required. That doesn’t mean the new mayor won’t be able to increase spending or taxes, or impact demographics, but we think any changes are likely to be mitigated from current campaign promises. We will continue to review the city’s ongoing financial condition and make changes to our credit thesis when necessary.