"If we do not go down the first path, the city will be forced down a second, more harmful path," Mamdani said. "Faced with no other choice, the city would have to exercise the only revenue lever fully within our own control. We would have to raise property taxes."
A potential 9.5% property tax increase could impact over three million residential units and over 100,000 commercial buildings.
Mamdani says raising property taxes is a last resort to close budget gap
He would draw down $980 million from the city's Rainy Day Fund and another $229 million from the Retiree Health Benefits Fund.
"What we are announcing is a path of last resort, one that we do not want to pursue," Mamdani said.
The mayor says there would be no cuts to city services and increased spending for snow removal, outreach to the homeless and services for the mentally ill.
At an unrelated event on Tuesday, Gov. Hochul responded to Mamdani's presentation, saying "I am not supportive of a property tax increase, I don't know that that's necessary."
She noted the budget year does not start until July.
But today, "he is required to put options on the table, but that does not mean that's the final resolution.... there is no way to know today that is the outcome of what this process will look like after many months of negotiation with the City Council," Hochul said. "But let's find out what is really necessary for him to close that gap."
Mamdani says taxing the wealthy is the best option to close the budget gap
The city hasn't raised property taxes in 23 years, since the Bloomberg administration, and the mayor is expected to face pushback from the City Council if he uses those monies to fulfill campaign promises.
"At 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," Council Speaker Julie Menin said in a statement. "The Council believes there are additional areas of savings and revenue that deserve careful scrutiny before increasing the burden on small property owners and neighborhood small businesses, which could worsen the affordability crisis."
Progressive councilmembers like Lincoln Restler are counting on the governor and state lawmakers to come through with the money.
"And if we are unable to get it, we'll cross that bridge when we get there," Councilmember Lincoln Restler said.
The Democratic Socialists of America released a statement saying not to raise taxes would be a "declaration of war" on Mamdani's affordability agenda.
The budget presentation comes a day after Hochul announced a $1.5 billion investment into the city over the next two years.
That additional funding includes $510 million targeting costs that have shifted from the state to the city under prior administrations, including $300 million for youth programs, $60 million for public health, and a restoration of $150 million in sales tax receipts that would have been retained by the state.
During testimony in Albany, Mamdani had said the city is facing a $7 billion budget gap, down from what he initially estimated to be $12 billion last month, that he says he inherited from the previous administration, calling it "Mayor Adams' budget crisis."
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