New York City Mayor Zohran Mamdani unveiled his Fiscal Year 2027 Preliminary Budget on February 17, 2026, proposing a record $127 billion spending plan amid what he describes as an inherited fiscal crisis from the prior administration. The budget addresses a remaining two-year gap of $5.4 billion after accounting for savings, upward revenue revisions, and state aid.
At the core of Mamdani’s proposal are two contrasting paths to close the shortfall, with tax increases playing a central role.
Mamdani’s preferred approach focuses on progressive revenue measures that require state approval from Governor Kathy Hochul and the Legislature. These include:
- Raising personal income taxes on New Yorkers earning more than $1 million annually.
- Increasing taxes on the most profitable corporations.
He also calls for recalibrating the long-standing fiscal imbalance between the city and state, arguing that New York City sends far more revenue to Albany than it receives back. Mamdani frames this as the “most sustainable and fairest” option, targeting the wealthiest residents and businesses while avoiding broader burdens on working- and middle-class New Yorkers.
If these state-level changes fail to materialize, Mamdani has outlined a “last resort” alternative that the city could implement unilaterally (subject to City Council approval). This includes a 9.5% increase in the property tax rate, projected to generate about $3.7 billion in FY 2027. The hike would apply across the board, affecting more than 3 million residential units (including apartments, co-ops, condos, and single-family homes) and over 100,000 commercial buildings. Combined with draws from reserves—such as $980 million from the Rainy Day Fund in FY 2026 and $229 million from the Retiree Health Benefit Trust in FY 2027—this path would balance the budget but has drawn criticism as regressive and harmful to homeowners, small businesses, and renters (who often face passed-on costs).
The mayor has emphasized that he does not want to pursue the property tax route, calling it a “more harmful path” that weakens long-term fiscal health. Critics, including some council members, small business owners, and fiscal watchdogs like Comptroller Mark Levine, have pushed back, warning of dire consequences for affordability, potential exodus of residents and businesses, and the unfairness of the city’s existing property tax system.
Mamdani’s plan also incorporates efficiency savings of $1.77 billion over two years and assumes stronger tax revenues, but it avoids major service cuts while prioritizing areas like education, housing, and climate action.
As negotiations with Albany continue, the budget highlights ongoing tensions over taxation and state-city relations in New York. The final adopted budget will depend on whether the state greenlights the targeted hikes on high earners and corporations—or forces reliance on the broader property tax increase.
SOURCES:
Zohran Mamdani administration: Live updates, latest news on NYC mayor
Mayor Mamdani Releases Balanced Fiscal Year 2027 Preliminary Budget – NYC Mayor’s Office
Mamdani pushes for New York tax hike on the wealthy and corporations | Fox Business
NYC Council pushes against Mayor Zohran Mamdani’s ‘last resort’ preliminary budget proposal to raise property taxes – ABC7 New York
Mamdani floats increasing New York City property taxes as part of $127B budget plan – POLITICO
Mamdani Threatens Blanket Property Tax Hike as ‘Last Resort’ | THE CITY — NYC News
Mamdani to Hochul: Raise taxes or else… – City & State New York
