Mamdani to scrap plan to raise NYC property tax to close budget gap – NBC New York

Mayor Zohran Mamdani is set to officially scrap his plans to raise property taxes on New York City homeowners, according to a City Hall source familiar with the mayor’s plan to close the city’s $5.4 billion budget deficit.

Mamdani will present his plans Tuesday, a big test for the Democratic Socialist mayor within his first 150 days in office. The source told NBC New York the mayor’s budget presentation will include other ways to close the budget gap, noting that raising property taxes will no longer be necessary.

In February, the mayor said raising property taxes by 9.5% would generate $3.7 billion in revenue. He insisted it would be the only way to balance the city budget, unless Albany agreed to raise taxes on corporations and the wealthy.

Mamdani hasn’t pushed the idea for many weeks, and may not have been able to move forward with the idea anyway because City Council Speaker Julie Menin immediately said it was off the table. After the proposal drew criticism, Mamdani distanced himself from the idea, saying it was intended only as “a last resort” but he has never assured New Yorkers it would not move forward.

While property taxes are the only taxes the city has the authority to raise without permission from Albany, Mamdani would have needed Council approval to do so. With Menin opposing the idea from the start, the idea did not seem likely to get off the ground.

Mamdani had insisted there were two paths out of the current budget crisis: raising personal income and corporate taxes, or raising property taxes. But he appears to have found a third path, either by identifying more savings or securing more revenue from Albany, or more likely a combination of the two.

Gov. Kathy Hochul last month introduced a pied-à-terre tax that would generate an estimated $500 million a year. It came as a concession from Hochul, who otherwise resisted Mamdani’s calls to tax the rich.

On Monday, the governor said she was still working to help the mayor dig out of the city’s budget hole, referencing more state education aid and pension re-amortizations.