Mayor Zohran Mamdani on Tuesday proposed to raise property tax rates in New York City by nearly 10 per cent, a measure he is preparing as a “last resort” to be deployed if he cannot persuade governor Kathy Hochul to raise income taxes on the wealthy.

The suggested 9.5 per cent increase would affect more than 3 million single-family homes, co-ops and condos and over 100,000 commercial buildings, Mamdani said as he delivered his preliminary spending plan.

The mayor acknowledged that his proposal would not merely force the wealthy to pay more taxes, but would also be a “tax on working- and middle-class New Yorkers”, and stressed that this was not his first choice.

But he noted that New York City mayors had little authority to raise taxes without the governor’s and Legislature’s acquiescence, and said that a city property tax increase — combined with raiding the city’s reserve funds — was the only way to address a looming budget deficit projected to reach $5.4 billion over two years.

“If we cannot follow this first path,” he said, referring to his proposed income tax hike on wealthier New Yorkers, “we will be forced onto a much more damaging path of last resort — one where we have to use the only tools at the city’s disposal: raising property taxes and raiding our reserves”.

“The second path is painful,” he added. “We will continue to work with Albany to avoid it.”

If other options surface, Mamdani may yet water down or abandon the proposed tax increase as the June 30 city budget deadline draws closer — a possibility that Hochul alluded to on Tuesday, as she played down the likelihood of city property taxes rising.

“That’s their prerogative to look at that as an option,” she said, suggesting that cost-cutting measures and updated accounting might make such an increase unnecessary. “He’s required to put options on the table; that does not mean that’s the final resolution.”

The budget plan, Mamdani’s first since becoming mayor, totals $127 billion — a $5 billion increase from the current budget — and would take effect July 1, following revisions and negotiations with the City Council.

By law, city budgets must be balanced. But the mayor’s initial proposal for how to do so seemed less like a last resort and more like an opening foray in a pressure campaign to get Hochul to back his call to raise taxes on those making $1 million or more a year.

In recent weeks, Mamdani has seemed to go out of his way not to antagonise the governor, a pro-business Democrat who is up for re-election this year and with whom the new democratic socialist mayor has forged a warm alliance despite their ideological differences.

The mayor recently endorsed Hochul for re-election and told allies he would most likely skip a “Tax the Rich” rally planned for next week in Albany.

New York Times News Service