Mamdani Unveils $127 Billion Budget, Threatens 9.5% Property Tax Hike

New York City Mayor Zohran Mamdani has rolled out a staggering $127 billion preliminary budget for fiscal year 2027 — the largest spending proposal in city history — while delivering a pointed warning to Gov. Kathy Hochul: approve a tax hike on millionaires or brace for a sweeping property tax increase of nearly 10 percent.

The proposal marks an $11 billion jump from the current $115.9 billion fiscal year 2026 budget, a 9.6 percent surge in spending despite a projected $5.4 billion deficit. Notably absent from the plan are major structural spending cuts, even as city leaders acknowledge looming fiscal pressures.

Instead, Mamdani is urging Albany to authorize a 2 percent income tax increase on individuals earning more than $1 million annually — a move that requires state approval. Should Hochul and state lawmakers decline, the mayor said he would be “forced” to pursue what he described as a “second, more harmful path” — a 9.5 percent across-the-board property tax hike.

“I do not want to raise property taxes,” Mamdani said during his budget presentation. “When faced with this crisis, the question is who should pay these taxes? I believe that it should be the wealthiest New Yorkers, the most profitable corporations.”

The proposed property tax increase would impact approximately 3 million residential units and 100,000 commercial properties across the five boroughs. City estimates suggest the hike would generate roughly $3.7 billion — still insufficient to fully close the projected gap.

Spending priorities in the plan include $38 billion for the Department of Education, reflecting a $3 billion increase, and $6.38 billion for the NYPD, an additional $100 million. The proposal also sets aside $38 million for the city’s Law Department to hire 200 new attorneys and 100 support staff.

To further plug the deficit, Mamdani is seeking to draw more than $3.25 billion from city reserves and other savings accounts — a maneuver critics warn could weaken the city’s financial cushion in the face of economic uncertainty.

Under the property tax framework outlined by City Hall, homeowners and small buildings with three or fewer units could see increases approaching 22 percent. Larger apartment buildings could face hikes exceeding 13 percent, while commercial properties might see increases near 12 percent.

For example, the owner of a single-family Park Slope home valued at roughly $3.2 million — currently paying about $8,700 annually in property taxes — could see that bill climb to approximately $9,500. Meanwhile, an Upper West Side condominium assessed at $120,000 could experience an increase from $14,926 to $16,345 per year.

Citywide property taxes have not been raised at this scale since the aftermath of the September 11, 2001 terrorist attacks — a comparison that underscores the magnitude of the proposal.

Gov. Hochul quickly distanced herself from the idea. “I’m not supportive of a property tax increase. I don’t know that that’s necessary,” she told reporters at an unrelated event.

Without state authorization for an income tax hike, property taxes remain one of the few significant revenue levers available to the mayor with City Council approval. That dynamic has intensified tensions between City Hall and Albany as both governments move through their respective budget negotiations.

New York City Comptroller Mark Levine warned that a blanket property tax increase could have “dire consequences,” arguing that the city’s property tax system is already “profoundly unfair and inconsistent.” He described an across-the-board increase as regressive, raising concerns that middle-class homeowners and small landlords would shoulder a disproportionate burden.

Andrew Rein, executive director of the Citizens Budget Commission, echoed calls for fiscal restraint, stating that before seeking new revenue streams, city leaders should ensure that every dollar of the $127 billion budget is being spent effectively and efficiently.

Even among Democrats, unease is reportedly growing. Sources familiar with City Council deliberations suggest some left-wing members question the wisdom of confronting Albany so directly, especially given Hochul’s repeated reluctance to raise income taxes as she approaches her reelection campaign.

Albany’s budget deadline falls on April 1, though delays are common. New York City’s final budget must be approved by June 5 and takes effect July 1. Political observers note that Mamdani’s strategy appears to be a high-stakes gambit — leveraging the threat of broad property tax hikes in hopes that state lawmakers will yield.

With the most expensive municipal budget in American history on the table and a multibillion-dollar shortfall looming, Mamdani is effectively betting that Albany will blink first — before New York’s homeowners and small businesses are handed the bill.