Why Is Mamdani Threatening a Property Tax Hike?

"In the first preliminary budget proposal of his term, Mamdani laid out this potential future in his proposed $127 billion budget which factors in a 9.5 percent increase in property taxes and would see the city withdrawing $980 million from the city's Rainy Day Fund this year as well as drawing down $229 million from the Retiree Health Benefits Trust in the next fiscal year. The final budget, once negotiated over and approved by City Council, will take effect July 1."

"During his briefing, the mayor described a city at a crossroads, facing two potential paths to balance the budget under a looming $5.4 billion budget gap Mamdani described as "historic." Mamdani said his administration's preferred funding path would be to generate revenue by a two percent increase in personal income taxes on New Yorkers earning more than $1 million a year as well as raising corporate taxes on the state's most profitable corporations, calling it the most "sustainable and the fairest" option."

""We remain firmly within a budget crisis. It is a crisis that we can and will overcome. But we cannot do so without either significant structural changes in Albany or painful decisions of last resort here at home," Mamdani said. "I am encouraged and heartened by the relationship that we have built with Governor Hochul and the state legislature and hopeful that we can arrive at a fair solution"

The preliminary $127 billion budget includes a 9.5 percent property tax increase and draws $980 million from the Rainy Day Fund this year and $229 million from the Retiree Health Benefits Trust next fiscal year. The plan confronts a $5.4 billion budget gap described as historic. The preferred revenue path is a 2 percent increase in personal income taxes on residents earning more than $1 million annually and higher corporate taxes on the state's most profitable companies, described as more sustainable and fair. Without statewide tax changes, the alternative is higher property taxes and reserve drawdowns as a last resort. The final budget will be negotiated and takes effect July 1.

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