Mayor Mamdani faces backlash over threat to raise property taxes
NEW YORK CITY (WABC) -- Mayor Zohran Mamdani's proposal to raise property taxes by 9.5% to close a more than $5 billion budget gap is facing pushback from local leaders and small business owners.
During his preliminary budget proposal on Tuesday, Mamdani suggested "a path of last resort" of raising property taxes and dipping into New York City reserves to close a $7 billion budget gap, if Gov. Kathy Hochul doesn't commit to raising taxes on corporations or those earning over a million dollars a year.
By some estimates, increasing the city's property tax would cost the typical homeowner an extra $700 a year. But the real impact, from the high-rises in Manhattan to the apartments in the Bronx and Upper Manhattan, to the woodframe homes on Staten Island is difficult to measure.
"The onus for resolving this crisis should not be placed on the backs of working and middle-class New Yorkers," Mamdani said.
Mayor Mamdani, a democratic socialist, repeated his call for higher taxes on millionaires and major corporations and returning more tax dollars from the state to the city.
"If we do not go down the first path, the city will be forced down a second, more harmful path," the mayor 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."
Specifically, a 9.5% property tax increase on more than three million residential apartments and over 100,000 commercial buildings.
"What we are announcing is a path of last resort, one that we do not want to pursue," Mamdani said.
It's an ultimatum to the state legislature and to Hochul, who has ruled out raising taxes.
On Wednesday, Mamdani announced that he has seized control of the Rent Guidelines Board to make good on his campaign promise to freeze rents.
Small Property Owners say the prospect for them is grim.
"Raising property taxes, while at the same time freezing rents... would be crushing to small owners, driving us into foreclosure and bankruptcy," said Ann Korchak, the president of Small Property Owners of New York.
The leader of the city's largest business group says corporations are already relocating to cities in Texas. And that new companies will be reluctant to locate to New York City.
But Mamdani insists that significant cuts to the city's budget would impact the very New Yorkers who can least afford them.
"We want to build a city that makes this one where working people can not only live, but can also dream," Mamdani said. "And what that means is we have to work together to ensure that they are not stuck with the bill of a fiscal crisis they had nothing to do with."
The mayor's proposal is already getting plenty of pushback from local leaders.
"Think about the senior citizens living on the margins already. We have a food insecurity issue. People are struggling out there and this is a nonstarter," said Queens Borough President Donovan Richards.
Mamdani "should be decreasing spending that isn't improving New Yorkers' lives. That's where he should be focused now. Not increasing taxes, but decreasing un-useful spending," said Andrew Rein of the Citizens Budget Commission.
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."
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