That proposed 9.5% hike, which Mamdani framed as the city\u2019s nuclear option, would be the first of its kind since 2003.<\/p>\n
\u201cWe remain firmly within a budget crisis,\u201d the mayor said at the\u00a0City Hall\u00a0announcement of his preliminary budget plan, which represents the first step in the budget negotiation process.<\/p>\n
\u201cIt is a crisis that we can and will overcome, but we cannot do so without either significant structural changes in\u00a0Albany or painful decisions of last resort.\u201d<\/p>\n
The administration is currently projecting a\u00a0$5.4 billion budget gap,<\/a>\u00a0which Mamdani has blamed on fiscal mismanagement and underbudgeting during the\u00a0Adams\u00a0administration. The mayor\u2019s proposed budget for the upcoming fiscal year comes in at a whopping $127 billion.<\/p>\n Administration officials said the property hike would generate $3.7 billion in revenue in the next fiscal year. It would impact more than 3 million residential units and over 100,000 commercial buildings, the mayor said<\/p>\n Mamdani said he has little appetite for the property tax hike, which would hit a constituency he\u2019s struggled to win over\u2014homeowners in\u00a0mostly Black neighborhoods<\/a>\u2014especially hard. He framed as the last possible option for his administration the possibility of making those working-class New Yorkers fork up, saying the administration has \u201cexhausted almost every option.\u201d<\/p>\n \u201cWe do not want to have to turn to such drastic measures to balance our budget,\u201d Mamdani said. \u201cBut faced with no other choice, we will be forced to.\u201d<\/p>\n Property taxes are the only taxes the mayor could raise without the state, though the City Council would have to approve the hike.<\/p>\n \u201cAt 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,\u201d Council Speaker\u00a0Julie Menin\u00a0said in a statement.<\/p>\n Mamdani\u2019s gamble that the threat of higher property taxes could be used to get Hochul to establish tax hikes on the rich comes as the mayor is coasting on his widespread popularity and as\u00a0Hochul is facing reelection<\/a>, with much of her Democratic base residing in the five boroughs.<\/p>\n \u201cI\u2019m not supportive of a property tax increase. I don\u2019t know that that\u2019s necessary,\u201d Hochul said at an unrelated Hudson Yards press conference. She added that she\u2019s brought \u201cunprecedented levels\u201d of state cash to the city, including the extra money announced Monday.<\/p>\n Just a day earlier,\u00a0Gov. Hochul\u00a0announced the state\u00a0would give $1.5 billion to the city<\/a>\u00a0over the next two fiscal years\u2014significantly decreasing the city\u2019s budget gap projections from $7 billion to $5.4 billion.<\/p>\n To balance this fiscal year\u2019s budget, the city also plans to draw down $980 million from \u201cRainy Day\u201d reserves, and would plan to withdraw hundreds of millions more in the upcoming fiscal year. Mamdani then said the city would pay back funds taken from the reserves in fiscal year 2028.<\/p>\n Critics said Mamdani\u2019s proposal presented a false binary.<\/p>\n \u201cMayor Mamdani\u2019s preliminary budget proposes a false choice: either the state raises personal income and business taxes, or the city raises property taxes and saps money from reserves, including those to protect New Yorkers from a recession,\u201d\u00a0Citizens Budget Commission\u00a0President\u00a0Andrew Rein\u00a0said in a statement. \u201cThe best choice is to eliminate spending that does not improve New Yorkers\u2019 lives and make government more efficient and effective.\u201d<\/p>\n Queens Borough President\u00a0Donovan Richards\u00a0said a property tax hike would \u201cforce people out of their homes.\u201d<\/p>\n And City Comptroller\u00a0Mark Levine\u00a0called the proposed hike a \u201cregressive\u201d tax that will hit \u201ccommunities of color much more than it hits homeowners in wealthier areas.\u201d<\/p>\n \u201cWe do have a big gap to fill, and he\u2019s 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,\u201d Levine, who was\u00a0briefed on the proposal<\/a>\u00a0Tuesday morning, said.<\/p>\n On the campaign trail, Mamdani emphasized a need to reform the\u00a0city\u2019s property tax system<\/a>, which economists say favors single-family homes, luxury condos and predominantly white neighborhoods overall, and places more weight on multifamily buildings and homeowners in mostly Black neighborhoods.<\/p>\n Mamdani said Tuesday the city plans to introduce property tax reform legislation \u201cin the next few weeks.\u201d<\/p>\n The mayor has framed the tax increases on the rich as both a means to close the budget gap and to set the city on a stronger financial footing by giving him the cash to implement his affordability-centric agenda items.<\/p>\n Mamdani has not yet made good on his campaign promises to expand programs and funding for other agencies, with just 4% of the new spending in his preliminary plan allocated to new programs.<\/p>\n He also did not include funding for the proposed\u00a0Department of Community Safety\u00a0in the preliminary plan, though he promised to earmark funding for it in the executive plan, which is set to be released in April.<\/p>\n Mamdani has singled out the city\u2019s rental assistance voucher program,\u00a0CityFHEPS<\/a>, as one particularly egregious area of overbudgeting under\u00a0Adams. Mamdani last week said he\u2019s backtracking on his campaign promise to grow the program by seeking a\u00a0settlement in a lawsuit<\/a>\u00a0against the expansion.<\/p>\n Photo caption: New York City Mayor Zohran Mamdani speaks to reporters about New York City\u2019s finances during a news conference at City Hall in Manhattan on Feb. 17, 2026. (YouTube)<\/p>\n ______<\/p>\n \u00a92026 New York Daily News. Visit\u00a0nydailynews.com<\/a>. Distributed by\u00a0Tribune Content Agency LLC.<\/p>\n \t\t\t\t\t \t\t\tThanks for reading CPA Practice Advisor!<\/p>\n Subscribe for free to get personalized daily content, newsletters, continuing education, podcasts, whitepapers and more\u2026<\/p>\n \n\t\t\t\t\t\t\t![\"](\"https:\/\/www.cpapracticeadvisor.com\/wp-content\/uploads\/CPAPA-Logo.svg\"){kind=logo}
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