NYC Mayor Zohran Mamdani drops broad property tax hike in revised budget

New York City Mayor Zohran Mamdani on Tuesday unveiled a $124.7 billion budget for fiscal year 2027 that closes a projected $5.4 billion gap without raising property taxes on most property owners, walking back a threat he had used for months to pressure Albany for more funding.

Mr. Mamdani said the administration had already reduced what it described as a broader inherited fiscal gap of more than $12 billion to $5.4 billion through savings measures and updated revenue projections before relying on additional state support and agency efficiencies to balance the budget entirely.

“This budget does not raise property taxes and it refuses to slash services,” Mr. Mamdani said at a Tuesday press conference. “We pulled New York City back from an existential fiscal brink.”

In February, Mr. Mamdani’s preliminary budget had included a 9.5 percent property tax rate increase projected to generate $3.7 billion in fiscal year 2027, framing the hike as a last resort if Albany declined to raise taxes on the wealthiest New Yorkers and most profitable corporations. 

The executive budget instead relies on a mix of state support and targeted new revenue. State leaders helped secure $4 billion in state support, including $352 million in direct aid, $3.2 billion in state authorizations — such as pension liability restructuring and school class-size flexibility — and $500 million in new revenue through a pied-à-terre tax on second homes valued above $5 million. 

The pied-à-terre tax, which applies to non-primary residences at that valuation threshold, represents one of the mayor’s signature revenue wins. New York City’s own comptroller has cautioned, however, that realistic annual receipts may fall between $340 million and $380 million after accounting for behavioral changes among affected property owners.

The administration also achieved $1.77 billion in gap-closing savings across city agencies, in part through Chief Savings Officers appointed at every department under an executive order issued by Mr. Mamdani. 

City Council Speaker Julie Menin and Finance Committee Chair Linda Lee said in a joint statement that they had a productive meeting with the mayor and credited the administration with moving toward an approach that identifies savings and avoids raising property taxes or raiding reserves. “The Council will closely review the Executive Budget and hold oversight hearings over the coming weeks as we work to deliver for hardworking families,” they said. 

Fiscal watchdogs offered a mixed assessment. The nonpartisan Citizens Budget Commission warned that city-funded spending continues to grow rapidly, rising by $24.4 billion, or 28 percent, between fiscal years 2025 and 2030, and that out-year budget gaps could swell to nearly $10 billion by fiscal year 2030.

The budget now goes to the City Council for a vote. Mr. Mamdani took office in January after winning the mayoral race on a platform of Democratic socialist policies, including free bus transit and city-run superstores, with property tax increases among the proposed funding mechanisms.