New York City Mayor Zohran Mamdani, the self-described democratic socialist who now runs America's largest city, dropped a $127 billion preliminary budget proposal on Tuesday that includes a 9.5% property tax increase affecting roughly three million residential units and 100,000 commercial properties. The proposal represents an $11 billion increase over the current fiscal year's $115.9 billion budget.
The catch: Mamdani says he doesn't actually want to raise property taxes. He wants the state to raise income taxes on the wealthy instead. If Governor Kathy Hochul and the state Legislature don't approve a 2% income tax increase on those earning more than $1 million, Mamdani warned he would be forced to impose the property tax hike on working and middle-class New Yorkers.
In other words, the mayor of New York City just used his own residents as hostages in a negotiation with Albany.
The city faces an estimated $5.4 billion budget gap, according to the New York Post. Mamdani's proposed property tax increase would generate approximately $3.7 billion, according to city officials. On top of that, he wants to draw more than $3.25 billion from the city's main reserves, plus additional millions from other savings accounts.
Governor Hochul pitched in $1.5 billion this week to help cover the deficit, but that barely dents a gap this size.
The budget also contains a few sizable cutbacks. Instead, it pours money into spending. The Department of Education alone would receive $38 billion, a $3 billion increase. The NYPD would get $6.38 billion, up $100 million. And the Law Department would receive $38 million to hire 200 new attorneys and 100 support staff.
Consider the math from a homeowner's perspective. A single-family home in Park Slope with a market value of $3.2 million and a city-assessed value of $44,000 would see its annual property taxes jump from roughly $8,700 to about $9,500. An Upper West Side condo assessed at $120,000 would go from $14,926 to $16,345 per year. The proposed rates break down as follows:
The last time New York City raised property taxes was after September 11, 2001. That increase came in response to a national tragedy and an unprecedented crisis. This one comes in response to a budget the mayor himself wrote.
Mamdani framed the entire exercise as a binary choice. At his press conference, flanked by First Deputy Mayor Dean Fuleihan and budget director Sherif Soliman, he cast himself as reluctant:
"I do not want to raise property taxes."
Then he explained who he thinks should foot the bill instead:
"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. I believe that they can afford to pay a little bit more."
This is the socialist playbook dressed in moderate clothing. The preferred option is always a tax increase. The only question is which tax increase? Cutting spending, streamlining bureaucracy, and eliminating waste from a $127 billion budget: none of these appear to be serious considerations. The debate Mamdani wants is not whether to tax more, but whom to tax more.
And the political dynamics make the whole thing look like a theater. Hochul faces re-election this fall. She told reporters at an unrelated event on Tuesday that she was "not supportive of a property tax increase" and added, "I don't know that that's necessary." There has long been support among some state legislators for income tax hikes similar to what Mamdani proposed, but Hochul has voiced opposition to raising income taxes on the wealthy.
Political consultant George Arzt called it exactly what it is: "It's a strategy. It's posturing, for now." He added that Mamdani "is playing the same game every other mayor has played at this point in the budget process."
One unnamed Democratic insider was less diplomatic:
"It really is stunningly risky. Broad-based property tax increases are historically so deeply unpopular that he is essentially betting his political career on a game of chicken with Albany."
What makes this story remarkable is that the opposition isn't coming from Republicans. It's coming from Mamdani's own side.
City Comptroller Mark Levine warned that the property tax proposal would have "dire consequences" and said the city was under "the greatest fiscal strain since the Great Recession." His critique went further:
"Our property tax system is profoundly unfair and inconsistent, and an across-the-board increase in this tax would be regressive."
Regressive. That's a word progressives normally reserve for policies they accuse Republicans of supporting. Here, it's being lobbed at a democratic socialist mayor by his own comptroller.
City Council Speaker Julie Menin, who would need to approve any property tax increase, wasn't buying it either:
"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."
One unnamed source captured the mood among city insiders: "They all know Hochul isn't going to raise taxes. Even progressives are saying what the hell is this. This whole thing is a mirage." Another source went further, calling it "one of the most outrageous, fiscally irresponsible things" and adding that Mamdani "is causing panic."
Andrew Rein, executive director of the Citizens Budget Commission, offered the most succinct rebuttal:
"The mayor should ensure that every one of the people's $127 billion is used well, before asking them to dig into their pockets."
Here is what the entire debate misses. New York City does not have a revenue problem. It has a $127 billion budget. The question that no one in city government seems willing to ask is whether a city needs to spend $127 billion in the first place.
Mamdani's preferred solution is a 2% income tax hike on millionaires. His backup plan is a 9.5% property tax hike on everyone. His third option, draining the rainy day fund by more than $3.25 billion, would leave the city exposed the next time an actual emergency arrives. What none of these options involves is spending less money.
Rein put it plainly: "The best choice is to eliminate spending that does not improve New Yorkers' lives and make government more efficient and effective."
That sentence could serve as the governing philosophy for any competent executive. But efficiency is not what democratic socialism produces. It produces $38 billion education budgets, 200 new government lawyers, and ultimatums demanding that someone else pay for it all.
The timeline ahead is tight. Albany's state budget is due April 1, though the state has a long history of missing that deadline. New York City's finalized budget must land by June 5 and take effect July 1. Between now and then, Mamdani, Hochul, Menin, and the state Legislature will engage in the kind of high-stakes negotiation that New York's political class treats as sport.
Property taxes remain the only taxes the mayor can control without state approval. That makes the threat real, even if the strategy is cynical. If Albany doesn't blink, three million residential units and 100,000 commercial properties absorb the hit.
New Yorkers who already pay some of the highest taxes in America are watching their new mayor propose even higher ones, with the justification that someone wealthier should really be paying instead. And when that someone wealthier declines to stick around for the privilege, the bill will land exactly where it always does: on the people who can't leave.
