(Bloomberg) — New York City Mayor Zohran Mamdani is proposing raising New York City’s property taxes for the first time in more than two decades and is looking to raid the city’s reserve funds to fill a roughly $5 billion budget gap.
“He’s put a pretty extreme option on the table, which is a combination of raising property taxes and taking money from reserves and relying on some pretty aggressive revenue projections to boot,” said New York City Comptroller Mark Levine.
Mamdani’s pitch, which will be unveiled Tuesday afternoon as part of his preliminary budget proposal, comes a day after Governor Kathy Hochul announced the state would provide $1.5 billion in additional aid to the city for the current fiscal year and next. She also will include $510 million for future years — a concession intended to help address the city’s fiscal problems.
Mamdani said last month the city was facing an extraordinary $12.6 billion two-year deficit, which he blamed on former Mayor Eric Adams’ administration’s underbudgeting for expenses including cash assistance, rental assistance for homeless residents, special education and overtime costs.
Mamdani argued the state should deliver billions more in funds and has pressed Hochul to raise taxes on corporations and wealthy residents, which she has resisted.
Steve Fulop, the president of the Partnership for New York City, a business advocacy group, said the pressure to raise taxes will hurt the city’s competitiveness as corporations seek to relocate to lower-tax areas.
“I know for a fact that several are exploring both moving jobs and of course the obvious is happening of growing elsewhere,” he said.
Hochul said a decision to raise the property tax rate lies with Mamdani and the city council, though she noted that the mayor’s pitch is subject to change as the budget is negotiated.
“I’m not supportive of a property tax increase,” Hochul said at an unrelated press event on Tuesday. “I don’t know that that’s necessary, but let’s find out what is really necessary for him to close that gap.”
Mamdani’s own rhetoric about the size and scope of the city’s budget situation has shifted. Earlier this month, just two weeks after describing the city’s $12.6 billion budget deficit as the city’s largest since the Great Recession, Mamdani revealed the hole had actually shrunk by $5 billion, because of higher tax revenue, propelled by personal income tax growth and Wall Street bonuses.
Even threatening to raise property taxes could prove a political lightning rod for Mamdani, after campaigning to reform that system, which has been criticized for overburdening lower- and middle-income residents. The last time the city increased property tax rates was under former Mayor Michael Bloomberg in the early 2000s. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)
The city took in over $33 billion in property tax revenue in fiscal year 2025. Changing the system to make it fairer by lowering some property owners’ tax burdens would lead to less city revenue overall, unless rates are increased on other property owners.
Mamdani is limited in his ability to raise revenue but is able to set property tax rates as part of the annual budget process. Homeowners are already expected to see increases after the city’s Department of Finance last month reported that the assessed value of all properties — or the portion of market value that is subject to tax—rose 5.6%, to $325.8 billion. The city determines tax bills by multiplying the tax rate with the assessed value of the property.
–With assistance from Danielle Muoio Dunn, Nacha Cattan, Michelle Kaske and Elizabeth Campbell.
(Updates with comments from business group and New York governor beginning in sixth paragraph.)
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