Woke mayor Mamdani forced into humiliating climbdown after threat to hammer millions of ordinary New Yorkers blows up in his face
Mayor Zohran Mamdani has been forced into a humiliating U-turn over his threat to hit millions of New York City homeowners with a sweeping property tax hike.
The mayor quietly dropped the deeply unpopular levy from his executive budget after weeks of backlash from homeowners, City Council leaders and business figures, who warned his tax-and-spend agenda risked driving wealth and investment out of the city.
Mamdani unveiled the executive budget for the current fiscal year on Tuesday, confirming his administration had closed a budget gap of more than $12 billion that he said he inherited upon taking office.
Alongside Governor Kathy Hochul, Mamdani announced that New York State had secured an additional $4 billion in aid to help plug the deficit, bringing total new state assistance to nearly $8 billion over two years.
The reversal marks a major political setback for the Democratic Socialist mayor less than five months into his term. He had previously defended the proposed tax hike as a necessary measure to help close the city’s $5.4 billion deficit – a shortfall he claimed on Tuesday had now been eliminated.
When Mamdani introduced his preliminary budget proposal 12 weeks ago, he described the financial situation facing the city as a ‘straightforward reality’ driven by a ‘historic budget gap.’
He argued that the deficit was ultimately closed through aggressive cost-cutting, efficiency measures across city government and negotiations with Albany, while using the prospect of higher property taxes – one of the few revenue tools directly under the city’s control – as leverage in talks with the state.
‘We scoured for savings and demanded greater efficiency from every part of city government,’ Mamdani said. ‘We partnered with Albany, securing billions in new funding and reversing many of the cost burdens that Andrew Cuomo shifted to the city over his decade as governor.’
Mayor Zohran Mamdani has backed away from a proposed property tax hike after weeks of backlash from homeowners, City Council leaders, and businesses
The mayor floated a 9.5 percent property tax increase in February to raise $3.7 billion, drawing criticism
Zohran Mamdani has since gone quiet on the issue amid opposition from City Council Speaker Julie Menin, who was at last week’s Met Gala with her husband Bruce Menin
‘And we taxed the rich, asking those with the most to contribute a little bit more to support those with the least. We pulled New York City back from an existential fiscal break.’
The mayor also clarified that raising property taxes will no longer be necessary.
The measure, which was met with ire, was floated by the mayor in February when he stated his intention to raise property taxes by 9.5 percent to generate $3.7 billion in revenue.
At the time, Mamdani insisted his plan was the only way to balance the budget if Albany wouldn’t budge on raising state taxes on corporations and the wealthy.
Mamdani has gone quiet on his plan in recent weeks, partly due to opposition from City Council Speaker Julie Menin.
After drawing criticism, Mamdani distanced himself from his own plan, describing it as a ‘last resort’ – although he stopped short of totally abandoning it.
Property taxes are the only major levy the city can adjust within limits set by state law, and any increase would require approval by the City Council.
That means Mamdani can’t raise taxes unilaterally, and right now it looks unlikely that his proposal stands a chance.
Mayor Zohran Mamdani and his wife Rama Duwaji standing in front of the city-owned $100million Gracie Mansion, where they moved into on January 12 at the start of his term
While New York Governor Kathy Hochul has opposed taxing the wealthy, she has supported a pied-à-terre tax that could generate about $500 million a year
Another tactic Mamdani is floating is allowing the city to delay billions in pension payments
Earlier, the mayor insisted there were two paths out of the budget crisis: Raise personal income taxes and corporate taxes, or raise property taxes.
Now appears to have found another way, involving additional savings or squeezing more revenue out of Albany – or a bit of both.
While New York Governor Kathy Hochul has opposed to Mamdani’s tax-the-rich vibes, she has backed his controversial pied-à-terre tax idea, which would generate an estimated $500 million a year.
The plan targets second homes valued at $5 million or more with ultra-wealthy owners who live outside the city.
In an April interview realtor Gea Elika told the Daily Mail that the tax would be easily skirted and possibly trigger a flood of expensive home sales.
‘People forget these are second homes,’ Elika said.
‘A pied-a-terre is a want, not a need. It’s a choice between owning a piece of the city or just booking a hotel when you’re in town. Tilt the math enough, and that choice flips overnight.’
He also argued that the estimated revenue for New York City would be just a fraction of more optimistic projections.
Instead, Elika argued the city would bleed out ‘the transfer taxes, mansion taxes and the building jobs that disappear when ownership stops being active.’
Another tactic Mamdani is floating to overcome the budget disparity is allowing the city to delay billions in pension payments, which would push back retirement contributions into its vast municipal pension system – freeing up at least $1 billion in the next fiscal year.
For now, the city remains on track to meet its long-term pension funding obligations by its 2032 deadline.
Mamdani’s team said in a statement to the New York Times that it has not started ironing out the details of the proposal and that any changes would likely push the deadline beyond 2032, with the approval of Hochul.
