Mamdani Threatens Blanket Property Tax Hike as ‘Last Resort’

by Katie Honan

This article was originally published on February 17 11:03 a.m. EST by THE CITY

Mayor Zohran Mamdani presented a “last resort” option of raising the property tax rate to close an estimated $5.4 billion budget gap, as Governor Kathy Hochul continues to resist raising taxes on the wealthiest individuals and corporations.

“We remain firmly in 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 the painful decision of last resort,” he said during his preliminary budget address Tuesday afternoon at City Hall.

“We would have to raise property taxes. We would also be forced to raid our reserves.”

He said it’s a “more harmful path” than making the richest New Yorkers pay 2 percentage points more in taxes, which requires state approval.

Under his proposal, which requires City Council approval, the tax rate for all properties would increase by 9.5 percent.

The last property tax rate increase happened under Mayor Michael Bloomberg, who first raised it after taking office and then temporarily decreased it, before raising it again because of the Great Recession. The city’s effective property tax rate has remained the same since then.

Mamdani continued to blame the budget gap on underbudgeting from former Mayor Eric Adams, leaving gaps larger than those during the financial crisis in 2008 and 2009.

The mayor said City Hall is “being as aggressive as we can in recognizing additional revenue” and looking for other ways to rein in spending. Agency-wide “chief savings officers” will each release a report by March 20 showing ways to save significant money in the city’s budget.

Governor Hochul told reporters at an unrelated event Tuesday that she did not “think a property tax increase is necessary.”

She has repeatedly said she would not raise taxes on the wealthy this year.

On Monday, she announced an increased $1.5 billion in state money to help fill that gap, including more than $500 million in recurring funding, which reduced the budget gap from last week’s $7 billion to more than $5 billion.

“This investment protects services and puts the city on stable financial footing,” she said in a statement.

Mamdani’s property tax increase proposal was immediately shot down by other elected officials, who vowed to fight the increase.

“We do have a big gap to fill, and he’s put a pretty extreme option on the table, which is a combination of raising property taxes and taking money from reserves and relying on some pretty aggressive revenue projections to boot,” Comptroller Mark Levine said Tuesday morning, after he was briefed on the plans.

“This is absolutely a non-starter for me,” Donovan Richards, the Queens Borough President, told reporters, noting there should be reform of the current system before any increase.

Deputy Council Speaker Nantasha Williams, who represents predominantly Black homeowners, said the plan wasn’t “equitable.”

“To advance a tax increase without first addressing that inequity feels deeply tone-deaf to Black, Brown, and working-class homeowners like the families I represent in Southeast Queens who are already shouldering a disproportionate share of the property tax burden,” she said in a statement.

Kenny Burgos, CEO of the New York Apartment Association and a former colleague of Mamdani’s in the Assembly, said the mayor should “be fighting for tax reform, not using the city’s largest stock of affordable housing as a piggy bank.”

Mamdani campaigned on reforming the city’s complex property tax system, which is more than 40 years old and favors single-family homes and owners of luxury condos while burdening multi-family buildings, which then pass on tax costs to tenants.

Homeowners in predominantly Black neighborhoods also pay property tax rates that can be double what homeowners in primarily white neighborhoods pay.

The disparity – and many stalled attempts to reform it – was highlighted by Mamdani in his inauguration speech.

“Because no matter what you eat, what language you speak, how you pray, or where you come from — the words that most define us are the two we all share: New Yorkers,” he said on Jan. 1. “And it will be New Yorkers who reform a long-broken property tax system.”

Last week, Mamdani’s budget director, Sherif Soliman, said the city planned to introduce a property tax reform legislation “in a matter of weeks.”

The city had been projected to face a $12 billion budget gap over two fiscal years, which the mayor blamed on former Mayor Eric Adams and former Governor Andrew Cuomo.

During his appeal to state lawmakers in Albany last week, he said that gap had shrunk by $5 billion, thanks to Wall Street bonuses, some cuts and $1 billion from the city’s reserves.

In 2024, the state’s highest court voted to reinstate a lawsuit by a group called Tax Equity Now New York looking to overhaul it.

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