One of Mayor Zohran Mamdani’s central campaign promises was to raise the New York City income tax on the highest tax bracket from 4% to 6%. However, in order to raise the New York City income tax, Mayor Mamdani must gain approval from state lawmakers in Albany. All indicators show that Governor Kathy Hochul, who endorsed Mayor Mamdani’s election campaign, is against proposed increases to New York City taxes. Without Governor Hochul’s support, and the support of the state legislature, Mayor Mamdani’s plans to increase New York City income taxes on the wealthy cannot be completed.
According to the Wall Street Journal, New York City is set to face a two-year budget gap of $5.4 billion. In order to mitigate this budget crisis, and further his ambitious agenda, Mayor Mamdani has proposed to raise New York City property taxes by 9.5%. This proposal would generate an estimated $3.7 billion in revenue for the City.
On February 17, Mayor Mamdani remained adamant that his first choice remains to be higher taxes for rich corporations and individuals. But, he said if that option is off the table, then he will push a property tax increase to mitigate the City’s budget crisis.
Unlike raising the City’s income tax, raising the property tax does not require approval from Albany. Instead, it requires Mamdani to seek approval from the City Council.
Governor Hochul has made it clear that she does not support an increase in City property taxes, but she also said, “that’s [property taxes are] between the City Council and the Mayor.”
Even though Mayor Mamdani has said he will attempt to pass a property tax increase, his plan has received significant criticism from New York City Council Speaker Julia Menin and City Council member Linda Lee, chair of the finance committee.
They released a joint statement saying, “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.”
The Mayor’s office has admitted that a proposed property tax increase would affect more than 3 million residential units and over 100,000 commercial buildings.
Mayor Mamdani will be required to work towards common ground with the City Council, as the Council is essential for passing any property tax increase and budget plans.
Critics of Mayor Mamdani’s plan have called the proposal “regressive”, “backwards”, and “a burden on the average New Yorker.” While Mayor Mamdani has quickly acknowledged the City’s growing budget problem, his plan to repair it will raise taxes on all property-owning New Yorkers, rather than exclusively the ultra-wealthy.
Many New Yorkers do not own a home or a property, but they may also be affected by the new property tax increases, assuming that landlords will move to increase rents.
Indications from Governor Hochul tell us that Albany has effectively dismissed an income tax increase as an option. Therefore, as long as Albany stonewalls an increase to the City’s income tax, Mayor Mamdani will work to solve the budget problem through a property tax increase, rather than proposing cuts to the City’s budget.
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