Mamdani floats increasing New York City property taxes as part of $127B budget plan

The mayor says increased property levies could be harmful, but argues they’ll be necessary if the state doesn’t enact 

a new tax on millionaires

By Chris Sommerfeldt and Joe Anuta

02/17/2026

NEW YORK — Mayor Zohran Mamdani proposed raising New York City’s property taxes Tuesday as part of this year’s budget — the democratic socialist’s latest gambit to pressure Albany to hike taxes on the wealthy.

Mamdani unveiled a $127 billion preliminary budget proposal for the next fiscal year, which begins in July. As part of that plan, Mamdani is relying in large part on a 9.5 percent increase in city property taxes — which he can do without state approval — to help close a projected $5.4 billion revenue shortfall over the coming two fiscal years.

But that’s not enough, so in order to balance the budget — as he must by law — he’s also proposing drawing down some $1.2 billion from the city’s “rainy day” fund and retiree health care reserves.

The city hasn’t increased property taxes since the financial turmoil in the aftermath of the 9/11 attacks.

Mamdani’s proposed increase — which drew swift pushback from various elected officials, including Gov. Kathy Hochul — would put a hefty burden on working- and middle-class homeowners in the city. The democratic socialist mayor acknowledged the increased taxes would impact more than 3 million residential units in the city, with the New Yorkers owning them having a median income of $122,000.

“This is something that we do not want to do,” he told reporters of his property tax proposal, “and this is something that we are going to utilize every single option to ensure it does not come to pass.”

What Mamdani wants to do instead is to increase taxes on millionaires and major corporations this year — new levies that only Albany can enact.

“There are two paths that we can walk: One that offers long-term stability and a second one with significant pain that we deeply hope to avoid,” Mamdani told reporters at City Hall.

But Hochul, 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.”

Though the state doesn’t need to sign off, Mamdani would need the City Council’s support to push through any property tax hikes.

City Council Speaker Julie Menin, a more moderate Democrat than Mamdani, joined Hochul in blasting the proposal to raise property taxes.

“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,” the speaker said in a statement with Council Member Julie Won, who chairs the chamber’s finance committee.

The speaker and Won did not say anything in their statement about where they stand on increasing taxes on the wealthy, though they suggested “there are additional areas of savings” that can be identified in the city budget to help address the deficit.

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 aimed at making the five boroughs more affordable for the working class.

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 expects that exercise to result in $1 billion worth of agency savings next fiscal year, or around 2.5 percent of total spending.

The mayor 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.

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.

“Owners of small rental properties are sick and tired of being treated like ATM machines every time the city needs to balance the budget,” said Ann Korchak, board president of Small Property Owners of New York, a trade group. “The mayor has declared war on thousands of immigrant property owners, most of them multigenerational families, who have their entire life savings invested in their small buildings.”

Mamdani could also risk further antagonizing 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.

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.