It comes after U.S. President Donald Trump earlier this month issued a memo laying out criteria to consider when reviewing funding for states and cities that are "permitting anarchy, violence, and destruction in American cities".
The Justice Department said the three cities were designated because they meet four main criteria, including "whether a jurisdiction forbids the police force from intervening to restore order amid widespread or sustained violence or destruction" and whether the city "disempowers or defunds police departments".
Any move to defund the city could also put severe strain on public health agencies and hospitals that are bracing for another wave of coronavirus infections this fall.
New York City officials disagreed with the assessment, saying its legality was questionable. "This nation has not been attacked by an enemy who has killed more and ravaged more than COVID since World War II and the President as a commander-in-chief has been an abysmal failure in the war against COVID".
It also noted that NY had reduced its police budget, facing increasing public pressure to use government money for health, education and mental health resources. Protesters had said the unit unfairly targeted Black men.
"I was out in Elmhurst Queens this morning, I saw peace, tranquility, I saw people going about their business, people excited that it's the first day of school - I saw anything but anarchy", de Blasio said.
The mayor added that he believes Trump is racist, "and it's sad".
The Trump administration's aggressive actions towards Democratically run cities drew the ire of many on Twitter-particularly those who live in New York City-where there hasn't been any violent protesting (at least outside the norm) since the earliest days of the civil unrest that followed the killing of George Floyd.
And while shootings are up dramatically, overall crime rates continue to go down in the five boroughs.
Gov. Cuomo blasted the flimsy reasoning as evidence that Trump's only trying to score a political point ahead of November's election.
Seattle permitted the establishment of a so-called "autonomous zone", where protesters forbade police from entering six square blocks of the downtown part of the city for almost a month. "It's insulting to the people of New York City and his effort to withhold our funding is unconstitutional". Trump has frequently touted himself as the "law and order" candidate as he seeks reelection in the wake of the summer's demonstrations over racial justice, even though the overwhelming majority of the protests have been peaceful.
There is also a strong possibility that the cities named on Monday will challenge their newfound designations in the courts, especially if they result in loss of funding from the federal government.
All the while, Trump has looked the other way to violent acts committed by his far-right supporters. And a little more than halfway through September the city already had 64 shootings, or double the shootings from the same month past year.