New York City Mayor Zohran Mamdani has unveiled a record $127 billion preliminary budget for fiscal year 2027 and issued a blunt ultimatum to Kathy Hochul: approve a tax hike on millionaires or face a nearly 10% property tax increase.
The proposal represents an $11 billion increase over the current $115.9 billion fiscal year 2026 budget, a 9.6% jump that would make it the largest spending plan in city history. Despite warning of a projected $5.4 billion budget gap, the mayor’s proposal contains few significant spending cuts.
Instead, Mamdani is pressing Albany to approve a 2% income tax increase on individuals earning more than $1 million annually. That change requires state authorization. If Hochul and the Legislature refuse, Mamdani said he would be “forced” to pursue what he described as a “second, more harmful path” — a 9.5% property tax increase across the board.
“I do not want to raise property taxes,” Mamdani said while presenting the budget. “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 hike would affect roughly 3 million residential units and 100,000 commercial properties. City officials estimate it would generate approximately $3.7 billion, still short of fully closing the budget gap.
The spending plan allocates $38 billion to the Department of Education, a $3 billion increase, and $6.38 billion to the NYPD, up $100 million.
It also includes $38 million for the Law Department to hire 200 new attorneys and 100 support staff.
Mamdani additionally proposed drawing more than $3.25 billion from city reserves and tapping other savings accounts to help balance the budget.
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Under the property tax proposal, residential homes and small buildings with three or fewer units could see increases approaching 22%, larger apartment buildings could face hikes exceeding 13%, and commercial properties could see increases near 12%.
For example, the owner of a single-family Park Slope home with a market value of about $3.2 million currently paying roughly $8,700 in annual property taxes could see that bill rise to around $9,500.
An Upper West Side condominium assessed at $120,000 could see its annual tax bill increase from $14,926 to $16,345.
Property taxes have not been raised citywide since shortly after the September 11, 2001 attacks.
Hochul quickly signaled opposition to the idea. “I’m not supportive of a property tax increase. I don’t know that that’s necessary,” she told reporters during an unrelated event.
Without state approval for the income tax increase, property taxes are the only major revenue source the mayor can adjust with City Council approval. That reality has intensified the standoff between City Hall and Albany as both budgets move through their respective processes.
City Comptroller Mark Levine warned that the proposed property tax increase would have “dire consequences,” calling the city’s property tax structure “profoundly unfair and inconsistent” and describing an across-the-board increase as regressive. Andrew Rein, executive director of the Citizens Budget Commission, said the mayor should focus on efficiency before seeking new revenue, stating that every dollar of the $127 billion budget should be used effectively before asking taxpayers to contribute more.
Even within Democratic circles, frustration is reportedly mounting. Sources familiar with council dynamics suggested that left-wing members are skeptical of the strategy, noting that Hochul has repeatedly expressed resistance to raising income taxes ahead of her reelection campaign.
Albany’s budget is due April 1, though delays are common. New York City’s finalized budget must be approved by June 5 and takes effect July 1. Political observers say Mamdani’s approach amounts to high-stakes leverage, but broad property tax increases have historically been unpopular with voters.
With the richest city budget in history on the table and a looming fiscal gap, Mamdani is effectively wagering that Albany will blink before City Hall does.
