New York City Mayor Zohran Mamdani has decided to abandon his previously announced plan to raise property taxes, a move that will be reflected in the executive budget he is set to release on Tuesday. The omission of the tax increase from the latest version of the mayor’s spending plan was disclosed by a person familiar with the matter, according to Bloomberg News.
Earlier in the year, Mamdani had put forward a proposal to boost property taxes by almost 10 percent. He framed that proposal in part as a lever to push Governor Kathy Hochul for additional state assistance. The proposal encountered resistance within the City Council, including objections from Speaker Julie Menin, and any measure to raise property taxes would have needed the council’s approval to take effect.
On Tuesday, Mamdani and Governor Hochul announced an agreement in which the state would deliver an additional $4 billion in new support to the city to help close a projected two-year budget shortfall. Separately, a tax targeting second homes, commonly described as a pied-a-terre levy and proposed by the governor, remains under discussion as part of state budget negotiations. How that second-home tax would be structured and implemented has not been clarified.
Mamdani’s initial budget blueprint, which included the near-10 percent property tax increase, triggered a reassessment by credit rating firms. Ratings agencies revised their outlook on the city to negative, citing concerns about long-term structural budget deficits. To address the shortfall in his preliminary plan, the mayor had also proposed drawing nearly $1 billion from the city’s savings, funds that are specifically reserved for fiscal emergencies.
The removal of the property tax increase from the executive budget marks the latest adjustment to the mayor’s approach to closing the fiscal gap for the fiscal year that begins on July 1. With state support now pledged and additional state-level tax options still unresolved, the final composition of the city’s revenue and savings strategy remains subject to ongoing budget negotiations.