Mamdani’s Budget ‘Ultimatum’: State-led 2% tax on millionaires or city-mandated 9.5% property tax hike

( OAN )

Democratic socialist New York City Mayor Zohran Mamdani proposed a 9.5% increase in the city’s property tax rate as a “last resort” to help close a projected $5.4 billion budget gap over the next two years — if Albany refuses to approve new taxes on wealthy residents and profitable corporations.

“Today, I’m releasing the City’s preliminary budget,” Mamdani (D-N.Y.) announced in an X post on Tuesday. “After years of fiscal mismanagement, we’re staring at a $5.4 billion budget gap — and two paths.” The first option, according to Mamdani, is that “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,” he added.

Mamdani, 34, had promised a push for raising taxes for millionaires throughout his mayoral campaign.

Last week, the Ugandan-born NYC mayor also beseeched Governor Kathy Hochul (D-N.Y.) to make the 2% increase at the annual “Tin Cup Day” event.

“If we do not go down the first path, the city will be forced down a second, more harmful path. Faced with no other choice…we would have to raise property taxes. We would also have to raid our reserves,” Mamdani said at a Tuesday press briefing in the Blue Room at New York City Hall. “The options of the second path are the options of last resort.”

Property taxes remain New York City’s largest revenue stream and the primary fiscal lever under Mamdani’s direct authority. In his first preliminary budget, he framed a potential 9.5% property tax hike as a “last resort” necessitated by a historic $5.4 billion deficit.

This hesitation appears to align with Governor Hochul’s outspoken disapproval of such an increase, as Mamdani continues to pressure Albany to instead authorize a 2% wealth tax on high-earners — a move the governor has so far resisted in favor of more moderate fiscal solutions.

“I’m not supportive of property tax increase, I don’t know that that’s necessary,” Hochul said at an unrelated event after word of Mamdani’s property tax idea leaked.

Meanwhile, fiscal watchdog groups have reacted sharply to the proposed 9.5% property tax hike as well, with the Citizens Budget Commission (CBC) labeling it a “false choice” between taxing the rich or burdening property owners.

Rather than relying on these “last resort” revenue measures, the Citizens Budget Commission (CBC) and City Comptroller Mark Levine have urged Mamdani to prioritize operational efficiencies and more aggressive spending cuts to close the city’s $5.4 billion deficit, which watchdogs argue stems from years of chronic underbudgeting.

“It’s false to think they are the only two choices,” said Andrew Rein of the CBC. “The best option… dig into the agencies, identify spending that is helping New Yorkers and keep it, identify spending that is not helping New Yorkers and shrink it.”

Additionally, New York City Council Speaker Julie Menin released a statement on Tuesday in relation to the proposal.

“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,” she contended. “The Council believes there are additional areas of savings and revenue that deserve careful scrutiny before increasing the burden on small property owners and neighborhood small businesses, which could worsen the affordability crisis.” On Tuesdays, after being asked by reporters what he would do if the City Council opposes a property tax hike, Mamdani replied, “I agree that this is not something that should be on the table. However, the City has very limited tools by which it can reach the legal requirement of a balanced budget in both this fiscal year and the next fiscal year.”

The Big Apple has not enacted a broad, legislative increase to its property tax rates since late 2002, when former Democrat Mayor Michael Bloomberg pushed through a record 18.5% hike to “stabilize the city’s budget” following the 9/11 terrorist attacks.

While property tax bills have continued to climb over the last two decades, the actual tax rate has remained relatively stable — making Mamdani’s current proposal for a 9.5% increase the most significant direct rate intervention in nearly a generation.