NEW YORK — Mayor Zohran Mamdani opened the door Tuesday to raising New York City’s property taxes as part of this year’s budget — the democratic socialist’s latest gambit to pressure Albany to hike taxes on the wealthy.
Mamdani is set to unveil a $127 billion preliminary budget proposal Tuesday afternoon for the next fiscal year, which begins in July. As part of that plan, Mamdani will float raising property taxes — which he can do without state approval — to close a $5.4 billion revenue shortfall, according to city Comptroller Mark Levine and Public Advocate Jumaane Williams, who spoke with reporters at City Hall after the mayor briefed them on the forthcoming proposal.
“After years of fiscal mismanagement, we’re staring at a $5.4 billion budget gap — and two paths,” Mamdani posted on X, alluding to his new pressure tactic. “One: Albany can raise taxes on the ultra-wealthy and the most profitable corporations and address the fiscal imbalance between our city and state. The other, a last resort: balance the budget on the backs of working people using the only tools at the City's disposal.”
A Mamdani spokesperson declined to immediately share more details. Levine said Mamdani’s preliminary plan will also propose drawing down a significant amount of funding from the city’s “rainy day” fund in order to balance the budget, though it was not immediately clear how much.
According to Levine and Williams, the property hikes and tapping of the reserves could be avoided in Mamdani’s telling only if Gov. Kathy Hochul agrees to jack up taxes on millionaires and large corporations.
“The governor has the opportunity to say I am going to think about all New Yorkers, and not just the wealthiest,” Williams, a Mamdani ally, told reporters after his briefing with the mayor. “If she doesn’t do that, the city only has so many options, and they’re not the greatest.”
In zeroing in on property levies, Mamdani is ratcheting up pressure on Hochul to back his proposals to hike New York’s corporate tax rate 4.25 percentage points and raise the state’s personal income tax by 2 percentage points for residents making more than $1 million.
The mayor made taxing wealthy New Yorkers a key plank of his successful 2025 campaign, pledging he’d use new revenue streams to make the city’s public buses free and vastly expand its subsidized child care programs, among other initiatives. The promises of wealth redistribution were so animating for Mamdani’s political base that his supporters regularly burst into “tax the rich” chants at his campaign rallies.
His approach to the budget since taking office has been to lean on Hochul for more money rather than bringing the city’s fiscal house in order himself. While the mayor created chief savings officers at each agency through a recent executive order, the results of that cost-cutting effort are not due for weeks.
Mamdani is raising the possibility of property tax hikes because he must by law find a way to bridge what his administration projects is a $5.4 billion deficit in the city’s budget over the coming two fiscal years. Mamdani had pegged the gap at $12 billion just weeks ago in another attempt to muscle Hochul, though his projection was roundly dismissed by budget experts. By the time he testified in Albany last week, Mamdani said that gap had shrunk by roughly $5 billion because of revenue from Wall Street bonuses, efficiencies and reserves.
The city can increase property taxes without state action. By contrast, only the state can enact new income and corporate taxes.
But the governor, who’s up for reelection this year, has repeatedly thrown cold water on the possibility of raising taxes on the wealthy in 2026, and on Tuesday she pooh-poohed the idea of raising property taxes in New York City as well.
“I’m not supportive of a property tax increase,” she told reporters at a press conference in Manhattan. “I don’t know that that’s necessary, but let’s find out what is really necessary to close that gap.”
Legislative leaders in the state Assembly and Senate have for years voiced openness to the idea of raising taxes on the wealthy and corporations, but without Hochul’s support the proposal is unlikely to advance in Albany.
In using property tax hikes as leverage, Mamdani is putting himself and Hochul into dicey political territory.
By keeping the push to tax the rich alive, Mamdani is leaving the governor vulnerable on her left flank (although Hochul no longer has a Democratic primary challenger, after Lt. Gov. Antonio Delgado dropped out of the race). And by threatening to raise property taxes, he risks angering a huge swath of businesses and middle- and working-class homeowners in the city.
Mamdani could also risk further antagonize the governor.
Hochul has delivered several wins for him so far, including securing a major infusion of new state funding for child care programs. She earmarked another $1.5 billion in state funding for the city over the weekend specifically meant to help close the municipal budget gap.
Mamdani appears to be looking for a middle ground between giving his benefactor some space and pressuring her on taxes.
Earlier this month, Mamdani announced the alleged, short-lived $12 billion budget gap on the same day Hochul soft-launched her reelection campaign — a move that angered the governor’s inner circle. However, Mamdani is also declining to attend a massive "tax the rich" rally in Albany later this month to avoid overplaying his hand with Hochul.
Though the state doesn’t need to sign off, Mamdani would need the City Council’s support to push through any property tax hikes, and it is unclear whether Council Speaker Julie Menin would be on board.
The city hasn’t enacted major property tax increases in decades.
The last substantial property tax hike was in 2003, under Mayor Michael Bloomberg, when the city raised the rate by 18.5 percent.
Bloomberg, a registered Republican at the time, argued the property tax increase was necessary to address a budget gap that exceeded $7 billion over two fiscal years.
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