New York City Mayor Zohran Mamdani ignited a sharp political confrontation Tuesday by presenting a new preliminary budget for 2027 and warning that if New York State does not approve tax hikes on the wealthy and corporations, the city will be forced to raise property taxes for residents.
Under the plan, property taxes would rise by approximately 9.5%, affecting more than three million residential properties and over one hundred thousand commercial properties. Mamdani also announced that the city is considering drawing on its reserve funds to close the deficit.
The Mayor's Preliminary Budget begins an important conversation about NYC's fiscal future.
The Council will release its own projections and closely review the Administration's plan to deliver a balanced budget that protects essential services and addresses affordability. pic.twitter.com/wxB83iTW8J
— New York City Council (@NYCCouncil) February 17, 2026
Mamdani described the move as a "last resort," making clear that he would prefer an alternative: higher taxes on top earners at the state level. But if New York State fails to act, he warned, "we will be forced to go down a more damaging path." The new budget, totaling approximately $127 billion, is designed to close a roughly $5.4 billion deficit that the city is legally required to balance. The proposal drew sharp opposition from within New York City's own leadership, including two of the most senior Jewish officials in city government.
City Council Speaker Julie Menin attacked the prospect of a tax increase. "At a time when New Yorkers are already grappling with a cost-of-living crisis, tapping the emergency reserve fund and proposing significant property tax hikes should not be on the table at all," she said.
City Comptroller Mark Levine also pushed back. Levine said, "Our property tax system is deeply unfair and inconsistent, and an across-the-board hike in this tax would be regressive. Drawing from reserves during a period of economic growth would leave us vulnerable to economic shocks next year."
The clash marks the first rift between the new mayor and two of the most powerful figures in city government – both of whom hold key positions in the budget approval process. The City Council must approve the final budget by summer, and the tax increases cannot take effect without its support.
Looming in the background is a dispute with state leadership as well. New York Governor Kathy Hochul said she does not support property tax increases and is not certain the move is necessary, while Mamdani continues to press for higher taxes on the wealthy and corporations at the state level. The budget battle is expected to continue in the coming months, but the central question that remains is not just how to close the deficit – it is who will bear the cost.
