Mayor’s Tax Ultimatum Shakes NYC

Person typing on laptop with tax-related icons displayed.

New York City’s new progressive mayor is floating a 9.5% property-tax hike that would land on millions of homes—unless Albany signs off on a new “wealth tax” instead.

Story Snapshot

Mayor Zohran Mamdani’s preliminary FY2027 budget includes a contingency 9.5% property-tax increase tied to closing a reported $5.4 billion gap.
Mamdani says he prefers a 2% income-tax increase on residents earning more than $1 million, but Gov. Kathy Hochul opposes that approach.
City Council leaders are already pushing back, arguing the city should find savings rather than raise taxes on property owners and small businesses.
The plan would generate about $3.7 billion in FY2027, but key numbers—like how many units would be affected—have been disputed or hard to independently confirm.

A Tax Ultimatum Hits an Already Pricey City

Mayor Zohran Mamdani unveiled a preliminary fiscal year 2027 budget that ties a major property-tax increase to Albany’s refusal to authorize his preferred “wealth tax” approach. Under the proposal, property taxes would rise 9.5% as a fallback, a move the administration says would help close a budget deficit estimated at $5.4 billion. Mamdani described the property-tax route as harmful—yet still placed it on the table as leverage.

For many families, the alarm is practical, not theoretical: higher property taxes tend to filter through the housing market. Homeowners face bigger bills, and landlords often try to recoup costs through rent where regulations and market conditions allow. With inflation still fresh in voters’ memory after years of federal overspending, a city plan that risks raising housing costs reads like the opposite of “affordability,” even before the final numbers are locked.

What Mamdani Says the Budget Would Raise—and From Whom

The preliminary framework says the 9.5% property-tax hike could raise roughly $3.7 billion in FY2027. Mamdani’s alternative is a 2% income-tax increase on New Yorkers earning over $1 million annually, framed as a fairness measure that would avoid pushing costs onto working and middle-class residents. One complication: reporting around the plan notes that some impact figures—such as the total number of units and buildings affected—have been difficult to confirm.

Budget math is also moving. The administration previously discussed a much larger gap—about $12 billion—before revising the shortfall to $5.4 billion after adjustments that include Wall Street bonus revenue assumptions, agency “efficiencies,” and reserve usage. When government leaders swing numbers that widely in a short span, taxpayers are right to demand clarity. Conservative readers especially recognize the pattern: optimistic projections now, higher taxes later if the estimates miss.

Albany Resistance and City Council Pushback Put the Hike in Doubt

Gov. Kathy Hochul has opposed the wealth-tax concept and has publicly downplayed certainty that a property-tax hike will happen, pointing to the long negotiation runway before a final budget is due in July. Hochul’s budget posture includes about $1.5 billion in additional state support and a focus on expanding universal childcare, while also signaling that the city’s preliminary plan is not the final product required by law.

Inside the city, the political roadblock is even more direct: the City Council must approve property-tax changes. Council Speaker Julie Menin and Finance Chair Linda Lee have argued the city should find savings rather than increase property taxes, emphasizing the strain on small property owners and neighborhood businesses. Queens Borough President Donovan Richards warned that higher property taxes could force people from their homes—language that underscores how quickly “tax policy” becomes displacement politics.

Reserves, “Savings Officers,” and the Limits of Government Fixes

Mamdani’s budget also leans on non-tax tools to paper over the gap, including reserve draws and internal savings targets. The city applied $980 million from its Rainy Day Reserve Fund in FY2026 and $229 million from the Retiree Health Benefit Trust in FY2027. Mamdani also ordered agencies to install “chief savings officers,” with an estimated $1 billion in savings expected through roughly 2.5% reductions in agency spending.

Those steps might soften the immediate blow, but they don’t erase the underlying conservative concern: government tends to treat taxpayers like an ATM when spending expectations are politically protected. An academic expert quoted in coverage also warned that wealth taxes can backfire because high earners are mobile and can leave, shrinking the base. On the property-tax side, the same expert suggested a 10% bump would be noticeable but not catastrophic—still, “noticeable” is plenty when housing is already squeezed.

The warmth of Mayor Zohran Mamdani's collectivism requires increasing property taxes on working- and middle-class New Yorkers, apparently. https://t.co/K2odNYYcQ2

— reason (@reason) February 18, 2026

For constitutional-minded Americans watching from outside New York, the broader takeaway is governance, not geography. When leaders promise affordability and deliver either higher property taxes or higher income taxes, the issue is trust—and the risk that normal working households get stuck holding the bag. With final decisions months away, New Yorkers will learn whether city hall trims spending and reforms priorities, or defaults to the familiar cycle of bigger government financed by bigger bills.