NYC Mayor Removes Property Tax Increase From $124.7 Billion 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. The mayor had threatened a broad property tax increase for months as leverage to secure more funding from Albany but walked back that proposal in the executive budget.

Mamdani said the administration first narrowed an inherited fiscal gap of more than $12 billion to $5.4 billion through savings measures and updated revenue projections. The revised plan then uses additional state support and agency efficiencies to balance the budget entirely without tapping reserves or imposing widespread tax hikes.

“This budget does not raise property taxes and it refuses to slash services,” Mr. Mamdani said at a Tuesday press conference. That hike was framed as a last resort if state leaders 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 $500 million in new revenue through a pied-à-terre tax on second homes valued above $5 million.

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

The administration achieved $1.77 billion in gap-closing savings across city agencies, partly through Chief Savings Officers appointed at every department under an executive order. One element of the plan reduces a personal income tax credit for filers making more than $142,000 a year who are also subject to the city’s unincorporated business tax, generating $68 million annually.

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. They 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.

““This budget does not raise property taxes and it refuses to slash services. 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. Mamdani took office in January after winning the mayoral race on a platform that included property tax increases among proposed funding mechanisms. The budget now goes to the City Council for a vote following oversight hearings. One source reported the spending plan as $127 billion while another listed $124.7 billion, a discrepancy that appears tied to differing treatment of state aid and multi-year projections. Both accounts agree the budget closes the immediate gap without broad property tax increases or service cuts. The mayor attributed the original shortfall, estimated at more than $12 billion over two years, to previous mayoral administrations and described it as the largest gap in funding since the Great Depression.”