New York City Mayor Zohran Mamdani dropped a $127 billion preliminary budget for fiscal year 2027 on Tuesday, an $11 billion increase over the current year's $115.9 billion spending plan.

Attached to it is an ultimatum for Governor Kathy Hochul. Approve income tax increases on the wealthy, or he raises property taxes by 9.5% on roughly three million residential units and 100,000 commercial properties across the five boroughs.

The last time New York City raised property taxes was shortly after September 11, 2001, the NY Post reported. Mamdani wants to do it to fill a $5.4 billion budget gap, and he wants everyone to know it's Albany's fault if he does.

The Squeeze Play

The structure of Mamdani's pitch is simple. His preferred path is a 2% income tax increase on New Yorkers earning more than $1 million, which requires state approval. If Hochul and the state Legislature refuse, Mamdani says he'll be "forced to go down a second, more harmful path of property taxes," which he frames as "placing the onus for resolving this crisis on the backs of working and middle-class New Yorkers."

In other words: give me the power to tax the rich, or I'll tax everyone and blame you.

Mamdani told reporters:

"When faced with this crisis, the question is who should pay these taxes? I believe that it should be the wealthiest New Yorkers, the most profitable corporations. I believe that they can afford to pay a little bit more."

He also said, plainly, "I do not want to raise property taxes." The budget he released tells a different story. It proposes property tax rates of roughly 22% for residential homes, townhouses, or buildings with three or fewer units, over 13.6% for larger apartment buildings, and about 12% for commercial properties like storefronts and office buildings. City officials estimate the hike would generate $3.7 billion.

What the Numbers Actually Look Like

Consider two examples from the budget proposal itself:

• A single-family home in Park Slope with a market value of $3.2 million and an assessed value of $44,000 would see annual property taxes jump from roughly $8,700 to about $9,500.
• A condominium on the Upper West Side with an assessed value of $120,000 would go from $14,926 to $16,345 per year.

These are not mansions owned by hedge fund managers. These are the homes of the people Mamdani claims to be protecting.

Meanwhile, the budget itself contains few sizable cutbacks. It proposes $38 billion for the Department of Education, a $3 billion increase. The NYPD gets $6.38 billion, up $100 million. The Law Department would receive $38 million to hire 200 new attorneys and 100 support staff. Mamdani also proposed drawing more than $3.25 billion from the city's main reserves, with additional funds pulled from other savings accounts.

The city is staring at a $5.4 billion gap, and the mayor's answer is to spend more, drain reserves, and demand new taxing authority. Not one of those moves is a cut.

Nobody's Buying It

The reaction from across the political spectrum in New York was unusually unified in its skepticism. Hochul, who pitched in $1.5 billion this week to help cover the city's deficit, told reporters Tuesday she was not on board:

"I'm not supportive of a property tax increase, I don't know that that's necessary."

City Comptroller Mark Levine warned that the across-the-board property tax hike would have dire consequences, noting that the city is "under the greatest fiscal strain since the Great Recession." His assessment of the proposal was blunt:

"Our property tax system is profoundly unfair and inconsistent, and an across-the-board increase in this tax would be regressive."

City Council Speaker Julie Menin, who would need to shepherd any property tax increase through her chamber, issued a written rebuke:

"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."

Andrew Rein, executive director of the Citizens Budget Commission, offered the sharpest critique of the budget's underlying logic:

"The mayor should ensure that every one of the people's $127 billion is used well, before asking them to dig into their pockets."

Rein added that the better path forward was to "eliminate spending that does not improve New Yorkers' lives and make government more efficient and effective." A novel concept for city government.

The Game Behind the Budget

The question hanging over all of this: does Mamdani actually intend to raise property taxes, or is this a pressure campaign designed to extract taxing power from Albany?

Political consultant George Arzt framed it as theater. "It's a strategy. It's posturing, for now," he said, comparing it to the annual negotiation ritual between mayors and the state legislature. "Mamdani is playing the same game every other mayor has played at this point in the budget process."

But the stakes of this particular game are higher than usual. One unnamed Democrat insider called the approach "stunningly risky":

"Broad-based property tax increases are historically so deeply unpopular that he is essentially betting his political career on a game of chicken with Albany."

Another source was less diplomatic, calling it "one of the most outrageous, fiscally irresponsible things" and warning that Mamdani "is causing panic." A separate source noted that even progressives are questioning the approach, adding that "they all know Hochul isn't going to raise taxes" and calling the entire proposal "a mirage."

Hochul faces re-election in the fall. Signing off on a tax increase for millionaires at the request of a Democratic socialist mayor would hand her opponents a gift. She has every political reason to say no.

The Real Problem No One Wants to Name

Step back from the political chess, and the budget math reveals a familiar pattern. New York City's spending has ballooned to $127 billion. The gap between revenue and expenditure sits at $5.4 billion. The proposed solution involves no meaningful spending reductions, a raid on reserves, and demands for new taxes.

This is the endgame of a governing philosophy that treats every public dollar as a moral commitment and every budget shortfall as a revenue problem. The Department of Education alone would receive $38 billion, a figure larger than the entire general fund budget of most American states. The city employs more people, funds more programs, and carries more bureaucratic weight than any municipality in the country, and the response to fiscal strain is never to question the weight. It's to find someone new to carry it.

Mamdani's framing is instructive. He presents two options: tax the wealthy or tax the middle class. The option he never presents is spending less. That tells you everything about his governing philosophy and nothing about sound fiscal management.

The finalized budget is due by June 5 and takes effect July 1. Albany's budget deadline is April 1, though the state has been known to blow past that by weeks. Between now and then, expect the usual cycle of threats, negotiations, and eventual deals that leave the underlying spending trajectory untouched.

New York City doesn't have a revenue crisis. It has a spending crisis dressed up in populist language and aimed at someone else's wallet.