Mamdani Warns of Nearly 10% Property-Tax Boost if No Tax on Wealthy
New York City mayor says ‘drastic measures’ might be needed to fund his proposed budget
- Mayor Zohran Mamdani proposed a 9.5% New York City property tax hike to generate $3.7 billion for the fiscal year 2027.
- The proposal follows his failure to persuade Gov. Kathy Hochul to approve higher taxes on corporations and wealthy individuals.
- The city faces a $5.4 billion two-year budget gap.
Mayor Zohran Mamdani proposed raising New York City property taxes by nearly 10%, having failed so far to persuade New York Gov. Kathy Hochul to increase taxes on corporations and the wealthy.
Higher taxes for rich corporations and individuals remains his first choice, Mamdani said Tuesday as he shared his proposed budget for fiscal year 2027.
If those options are off the table, his budget recommends raising city property taxes by 9.5%, which would generate $3.7 billion. He also called for drawing down the city’s reserves by $1.2 billion to help close a looming budget deficit.
“We do not want to have to turn to such drastic measures to balance our budget,” Mamdani said. “But, faced with no other choice, we will be forced to.”
Mamdani, a Democratic socialist, campaigned on raising taxes on the wealthy and corporations to pay for many of his initiatives such as free child care and free bus service. Increasing taxes on corporations and on the wealthy, however, requires the approval of the state legislature and governor.
Hochul, a Democrat who is up for re-election this year, has opposed raising taxes. She said Monday that the state would steer $1.5 billion to New York City over two years to help address its cash crunch.
“I’ve worked hard to bring in unprecedented levels of money to help the city because the strength of the city affects the strength of the state,” Hochul said Tuesday at an unrelated news conference.
The Mamdani administration had initially identified a budget deficit of about $12 billion over the next two years. After accounting for some revenue adjustments and the additional $1.5 billion from Hochul and other measures, the city is looking at a two-year gap of $5.4 billion.
Raising property taxes to fill the budget hole would affect more than 3 million residential units and over 100,000 commercial buildings, the mayor’s office said.
New York City Council Speaker Julie Menin and City Council member Linda Lee, chair of the finance committee, criticized Mamdani’s plan.
“At a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever,” they said in a statement.
Mamdani needs the council’s support to pass his budget and approve any property tax increases.
The Real Estate Board of New York, a trade group, urged the city to first evaluate its spending.
“Using tax hikes of any kind, including increases to an already egregiously regressive property tax system, to raise revenue or plug budget holes is a non-starter,” said James Whelan, president of REBNY.
Hochul said Tuesday she didn’t support raising property taxes and didn’t know if it would be necessary to pass a budget. Mamdani and the city council, however, don’t need Hochul’s approval to raise property taxes.
“That’s between the City Council and the Mayor,” Hochul said. “That’s their prerogative to look at that as an option.”