By Joseph De Avila

Mayor Zohran Mamdani proposed raising New York City property taxes by nearly 10%, having failed so far to persuade New York Gov. Kathy Hochul to increase taxes on corporations and the wealthy.

Higher taxes for rich corporations and individuals remains his first choice, Mamdani said Tuesday as he shared his proposed budget for fiscal year 2027.

If those options are off the table, his budget recommends raising city property taxes by 9.5%, which would generate $3.7 billion. He also called for drawing down the city's reserves by $1.2 billion to help close a looming budget deficit.

"We do not want to have to turn to such drastic measures to balance our budget," Mamdani said. "But, faced with no other choice, we will be forced to."

Mamdani, a Democratic socialist, campaigned on raising taxes on the wealthy and corporations to pay for many of his initiatives such as free child care and free bus service. Increasing taxes on corporations and on the wealthy, however, requires the approval of the state legislature and governor.

The Mamdani administration had initially identified a budget deficit of about $12 billion over the next two years. After accounting for some revenue adjustments and the additional $1.5 billion from Hochul and other measures, the city is looking at a two-year gap of $5.4 billion.

Hochul, a Democrat who is up for re-election this year, has opposed raising taxes. She said Monday that the state would steer $1.5 billion to New York City over two years to help address its cash crunch.

"I've worked hard to bring in unprecedented levels of money to help the city because the strength of the city affects the strength of the state, " Hochul said Tuesday at an unrelated news conference.

Raising property taxes to fill the budget hole would affect more than 3 million residential units and over 100,000 commercial buildings, the mayor's office said.

Hochul said Tuesday she didn't support raising property taxes and didn't know if it would be necessary to pass a budget. Mamdani and the city council, however, don't need Hochul's approval to raise property taxes.

"That's between the City Council and the Mayor," Hochul said. "That's their prerogative to look at that as an option."

Write to Joseph De Avila at joseph.deavila@wsj.com

(END) Dow Jones Newswires

February 17, 2026 15:53 ET (20:53 GMT)

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