Mamdani Proposes 9.5% Property Tax Hike to Address $5.4B Deficit

New York City Mayor Zohran Mamdani has proposed a 9.5% property tax increase if he and Gov. Kathy Hochul don't come to an agreement on raising income taxes on the wealthy.

The Details: Mamdani revealed a $127 billion spending plan for fiscal year 2027 with the goal of closing the city's $5.4 billion deficit over the next two years. He proposed the 9.5% property tax increase as a "last resort" if Albany refuses to increase taxes for corporations and increase personal income taxes on wealthy residents by 2%. The property tax would reportedly impact over 3 million residential units and over 100,000 commercial buildings. It would also generate roughly $3.7 billion in annual revenue. The spending plan is a $5 billion increase from the current budget and is expected to begin July 1. 

For Context: Under New York law, the Mayor is legally required to maintain a balanced budget. Mamdani would need Hochul's approval to raise income taxes, however the mayor and city council can influence property taxes without approval from the governor or State Legislature. Hochul previously announced $1.5 billion in state aid for New York City, which Mamdani said was insufficient to bridge the gap. 

Impact of Raising Income Taxes: New York Post (Lean Right bias) said the income tax hike could lead to downstream costs for tenants. It quoted spokespeople for the New York Apartment Association saying landlords would "ultimately pass down some of the costs of increased taxes onto renters." It quoted the president of Small Property Owners of New York who said Mamdani had "declared war on thousands of immigrant property owners…who have their entire life savings invested in their small buildings." Newsmax (Right) said raising taxes could cost some of the highest-income taxpayers to leave New York City just as they did California and Oregon after tax increases.

Response from Democrats: New York Times (Lean Left) highlighted previous disagreements and ideological differences between Mamdani and Hochul, especially on their views of increasing taxes for the wealthy. The outlet cited Democratic city council members who also opposed the idea, and quoted other local leaders who called raising property taxes "a nonstarter" and said Mamdani was presenting a "false choice" between income and property tax hikes. Politico (Lean Left) also noted dissent from Hochul and wrote Mamdani's "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." It said Mamdani's use of property tax hikes as "leverage" puts himself and Hochul "into dicey political territory."

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