In an effort to stem the city’s projected $5.4 billion budget shortfall, newly elected New York City Mayor Zohran Mamdani issued an ultimatum to New York State Governor Kathy Hochul: Either tax the super-rich or have the middle class foot the bill.
The mayor announced the plan in a preliminary budget proposal on Tuesday, threatening a 9.5 percent property tax hike on the city’s homeowners if the governor chooses not to raise income taxes on the ultra-wealthy.
“The responsibility for solving this crisis should not lie with working-class and middle-class New Yorkers,” Mamdani said, arguing that raising property taxes would be the city’s “last resort” to address budget shortfalls. It is estimated that the tax increase will affect more than 3 million households and more than 100,000 commercial properties across the five boroughs and is expected to generate $3.7 billion in annual revenue.
That’s a big ask, since New York City property owners bear a greater tax burden than most of the country. According to the state comptroller, property taxes will account for more than 27% of the city’s cost of homeownership by 2022, compared with the national average of 22.6%. office. Property taxes are already the city’s largest single source of revenue, generating $31.8 billion by 2023, accounting for 44% total tax amount.
Statewide, the disparity is even more stark. According to the data, New York’s effective property tax rate is 1.45%, nearly double the national average (0.89%) Intelligent assets. New York has one of the highest average property tax rates in the nation. Statistically, only four states have higher property taxes wallet center. Based on the state’s median home value of $423,800, New Yorkers pay an average of $6,582 in property taxes each year. In New York City, the median home price reached a record high of $800,000 in the third quarter of 2025, and the tax burden rose to $12,441.
Income taxes are similarly concentrated. According to the U.S. Census Bureau, New York millionaires will pay 41% of all personal income taxes in 2023. state treasury. The bottom 50% of taxpayers pay 0.2%, while the top 200,000 taxpayers pay about half of the personal income tax. High-income earners in New York City also face the highest marginal tax rate in the country at 14.8%, followed closely by California at 13%.
“If we don’t address this structural imbalance and ignore New Yorkers’ calls for higher taxes on the wealthy, this crisis will not go away,” Mamdani said in the statement. “It will only come back year after year, forcing us to make harder, harsher choices each time.” That’s why Mamdani pushed Hochul (who became a close ally during Mamdani’s 2025 campaign) so strongly on the issue.
tax It must be paid, but by whom?
Raising property taxes falls under the purview of the mayor and city council, but raising income taxes would require approval from the governor and Albany. Mamdani and his supporters believe the latter would be the “most sustainable and fair” of the two options, and have even threatened voter retaliation against Hochul at the polls when she seeks re-election later this year.
“We will do everything we can in the coming months to ensure that our final budget reflects Path One,” Mamdani said. “But we can’t do that without significant structural changes in Albany or final painful decisions at home.”
The mayor’s proposal follows a joint statement released the previous day in which the governors firm More than $1.5 billion is earmarked to support the city’s operating expenses over the next two years.
“A strong New York City means a stronger New York State,” Hochul said in a statement Monday. “New Yorkers expect the state and city to work together, and I’m proud to work with the mayor to help working families.”
Mamdani praised the collaboration between the city and state but reiterated the impact homeowners will suffer if Albany doesn’t take action.
“This budget crisis was not caused by working New Yorkers, and they should not have to foot the bill,” he wrote in the statement. “This is what the beginning of a new, productive, and equitable relationship between City Hall and Albany looks like – one focused on serving working New Yorkers.”
Mamdani believes the city’s funding shortfall is the result of years of “mismanagement” by the previous administration under former Mayor Eric Adams. The deficit narrowed to $5.4 billion from $12 billion, thanks in part to the deployment of reserves and new state financing measures during the year.
This isn’t the first time the new mayor’s administration has been criticized for its stance on homeownership in the city. Mayor’s Advisor Cea Weaver is here. under attack Earlier this year, an article published in August 2019 Xthen called twitterin which Weaver wrote, “Private property, especially homeownership, is a weapon of white supremacy disguised as ‘wealth-building’ public policy.” (In the local news firestorm that followed, Mamdani endorsed Weaver.)