Mamdani says if the state won’t tax the wealthiest New Yorkers, he’d have to tax the middle class as a ‘last resort’

• A property tax increase in New York City is on the table as a “last resort,” Mayor Zohran Mamdani said.

• Higher taxes on the wealthy is his preferred way to close the $5.4 billion budget deficit, but it requires state involvement.

• A potential tax increase could impact middle-class New Yorkers and renters.

New York City Mayor Zohran Mamdani He says if the state doesn’t play ball tax the richIt would have to impose a higher tax on its own, which could hit middle-class New Yorkers.

At a news conference Tuesday, he laid out two options for addressing what he said was the city’s $5.4 billion budget deficit from the previous administration.

Mamdani outlined two potential paths forward to balance his preliminary $127 billion budget. Mamdani’s first method relies on the cooperation of New York Governor Kathy Hochul: increasing taxes The rich and corporations are the cornerstone of Mamdani’s campaign. It was hochul lukewarm about this idea.

Without Albany’s willingness to raise income and corporate taxes, Mamdani is signaling he will have to resort to other measures to fund his budget. he is swimming increasing property taxes for city residents — which will hit the middle and working classes as much as their typical targets on Wall Street — as well as tapping into funds the city keeps in reserve in case of an economic downturn.

Mamdani called that option “painful” and a “means of last resort” and said his administration would continue to work with Albany to avoid it.

“This is a preliminary budget,” he said at the press conference. “This is a budget that reflects the only tools the city has at its disposal.”

What does a New York City property tax increase mean?

If Hochul or Albany doesn’t back down, Mamdani said he would raise property taxes by 9.5%.

At the press conference, Mamdani said the tax would hit middle-class New Yorkers the hardest. His office did not immediately respond to a request for comment on which income groups would be most affected or the potential impact of the proposal on middle-income New Yorkers.

Multi-unit buildings – where tenants tend to live — are taxed at a higher rate than single-family or low-density homes, where wealthier New Yorkers tend to live. While renters do not pay property taxes directly, homeowners may be paid higher property tax taxes over time. will translate into higher rents.

“New York’s property tax system dates from the 1970s, trying to balance the needs of homeowners in the outer borough with commercial and multifamily housing in Manhattan,” said Rita Jefferson, a local analyst who focuses on equity at the Institute on Taxation and Economic Policy. “As a result, property tax rates on single-family homes are much lower than rates on multifamily units, resulting in very different bills for properties with the same market value.”

New York City Comptroller Mark Levine, an elected position not appointed by the Mayor, said Mamdani proposed a budget that “honestly and transparently reveals the extent of our challenges” and that the city “undoubtedly” needs more help from Albany.

“Relying on property tax increases and significantly reduced reserves to cover our deficit could have dire consequences,” Levine said. expression. “Our property tax system is highly unfair and inconsistent, and an across-the-board increase in this tax would have a regressive effect. Reducing reserves during a period of economic growth would leave us vulnerable to next year’s economic turbulence.”

The offer drew reaction from the USA Representative Nicole Malliotakisis a Republican whose district includes Staten Island and parts of South Brooklyn.

“The city is further squeezing the middle class by increasing the property tax levy every year, and now Mamdani wants to raise that rate, making the American dream of homeownership less attainable and the cost of housing even more unaffordable for both property owners and renters,” Malliotakis said in a statement. he said.

Mamdani’s offer does not mean this tenants or property owners will immediately face a huge tax bill; As he emphasized at the press conference, the budget is far from final. Hochul reportedly said. said at an unrelated event He doesn’t think a property tax increase is necessary.

“This is something we don’t want to do and we will use every option to make sure this doesn’t happen,” Mamdani said.

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