The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran

NEW YORK, June 25 (Reuters Breakingviews) - The city at the heart of world capitalism has symbolically rejected the 1%. Zohran Mamdani on Tuesday won the race to be the Democratic Party’s candidate for New York mayor. If elected, the self-described democratic socialist would have limited ability to carry out his expansive campaign promises but would be a potent emblem against the rich. No wonder the city’s billionaires are spooked.

The 33-year-old Mamdani on Tuesday pulled off an unlikely triumph, besting Andrew Cuomo, who had attracted more money and the support of the city’s political and financial establishment. Fix the City, a political action committee backed by former mayor Mike Bloomberg, food delivery firm DoorDash DASH.O and hedge fund tycoon Bill Ackman, had raised a record $25 million to support the former New York governor. As recently as last month, betting site Kalshi put Cuomo’s chances of winning the nomination at 91%.

But Mamdani’s youthful enthusiasm played well against his older opponent, who resigned as governor in 2021 after an inquiry found he sexually harassed 11 women, though he denied wrongdoing. The upstart’s promises to build housing, make bus travel free, and set up city-owned grocery stores appear to have enhanced his popular appeal.

Whether Mamdani can implement these policies if he moves into the mayor’s official residence after November’s vote remains to be seen. Though New York’s municipal budget of $112 billion is the largest in the United States, this would be a big spending expansion. Mamdani proposes raising $10 billion, primarily by increasing taxes on corporations and residents earning more than $1 million. The snag is that tax changes require the approval of New York state, and Governor Kathy Hochul said recently she’s more interested in cutting levies on the rich to prevent them from fleeing to other states.

The city could borrow to pay for capital improvements. It had $41 billion of debt-incurring power as of last July, according to New York’s Comptroller. But it is already spending more than its raising, and the amount it is projected to be able to raise by 2027 will drop to $33 billion. Moreover, 8% of the city’s annual funding comes from the federal government, and that could be cut.

Still, Mamdani’s success makes him a powerful symbol, both locally and nationally. He won a majority of the votes in New York’s Financial District, which includes Wall Street, and in well-heeled areas like Soho and Brooklyn’s Park Slope. A poll conducted by YouGov earlier this month gave the candidate a commanding 20-percentage-point lead among voters with incomes over $100,000. This, combined with the rejection of the well-funded Cuomo, points to a schism between the super-wealthy and the merely well off. His nomination looks like a rejection of policies which increase income disparity. If that overall message is popular in the city that embodies capitalism, it may prove popular elsewhere, too.

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CONTEXT NEWS

Zohran Mamdani had a large lead in New York City’s Democratic mayoral primary on the morning of June 25. Former New York Governor Andrew Cuomo, the second-placed candidate, conceded the race.

Mamdani led Cuomo by 43.5% to 36.4% with nearly 95% of votes counted according to the city’s elections board. The city’s ranked choice system of elections means final tallies are not expected until July 1.

Mamdani describes himself as a democratic socialist. His campaign platform included a rent freeze for rent-stabilized tenants, elimination of fares on city buses, building city-owned grocery stores and higher taxes on corporations as well as residents earning over $1 million annually.

(Editing by Peter Thal Larsen; Production by Pranav Kiran)

((For previous columns by the author, Reuters customers can click on CYRAN/robert.cyran@thomsonreuters.com; Reuters Messaging: robert.cyran.thomsonreuters.com@reuters.net))