New York City Mayor Zohran Mamdani has unveiled two competing budget proposals to address the city's growing fiscal crisis, triggering significant pushback from political leaders across the city and state.
Mamdani's first proposal would raise income and corporate taxes on the city's wealthiest residents and corporations, a move that requires approval from Governor Kathy Hochul. His alternative proposal would increase property taxes by 9.5%, which could affect more than 3 million single-family homes, co-ops, and condos, along with over 100,000 commercial buildings.
"The first path is the most sustainable and fairest: raising taxes on the wealthiest and corporations, and ending the drain by fixing the imbalance between what the City provides the State and what we receive in return," Mamdani said. He warned that rejecting the income tax approach would force the city down "a more harmful path of property taxes and raiding our reserves."
The city faces a budget deficit expected to grow to 7 billion dollars over the next two years, up from 5.4 billion dollars. Hochul has pledged to contribute 1.5 billion dollars in state funding to help close the gap, but has ruled out approving income tax increases.
The property tax increase proposal has drawn swift criticism from city officials across the political spectrum. City Comptroller Mark Levine called it "a pretty extreme option," while City Council Speaker Julie Menin and Finance Committee Chair Linda Lee said raising property taxes during an affordability crisis is inappropriate. Queens Borough President Donovan Richards called a 9.5 percent property tax increase "a nonstarter," saying the city should not "balance our budget on the backs of working-class New Yorkers, especially seniors on fixed incomes."
Republican Council Member David Carr characterized raising property taxes as "among the worst ideas imaginable," describing it as one of the most regressive taxes the city levies.
Governor Hochul told reporters she does not believe a property tax increase is necessary.
Mamdani's budget proposals come as he inherited a larger deficit than expected from his predecessor, Eric Adams. The proposals align with campaign promises to make top earners and corporations contribute more to fund ambitious programs including free childcare, free buses, and rent freezes for one million rent-stabilized apartments.
City Council Speaker Menin acknowledged that budget negotiations typically involve significant back-and-forth between the mayor and city council, but expressed hope for more coordinated discussions going forward. She told media outlets she has been engaging "very constructively" with Mamdani about the budget proposals.
The competing proposals are expected to trigger prolonged negotiations between city and state officials before final budget decisions are made.