Mayor Zohran Mamdani is preparing to announce a budget proposal that would fill New York City’s $5.4 billion deficient, thanks to a massive cash aid from Gov. Kathy Hochul.
The mayor and governor on Tuesday announced another $4 billion in cash assistance from the state, increasing the amount of state aid to almost $8 billion across two years. Mamdani is expected to detail the specifics of the budget proposal by the end of the day.
“Today, we are fulfilling the promise to make free universal child care a reality, making significant investments in education, public safety, and infrastructure while providing the city the resources they need to continue to fund critical services for New Yorkers,” Hochul said in a statement.
Mamdani said the aid marked a new chapter in cooperation between city and state government in New York.
“We have partnered through every step of this process to protect the fiscal health of our city. I am thankful for her collaboration and deep commitment to securing a future for our city that working people can afford,” the mayor said.
The state funding boost, along with a pied-a-terre tax, will allow Mamdani to scrap his controversial plans to raise property taxes on NYC homeowners, a City Hall sources told NBC New York on Monday.
The source told NBC New York the mayor’s budget presentation will include other ways to close the budget gap, noting that raising property taxes will no longer be necessary.
In February, the mayor said raising property taxes by 9.5% would generate $3.7 billion in revenue. He insisted it would be the only way to balance the city budget, unless Albany agreed to raise taxes on corporations and the wealthy.
Mamdani hasn’t pushed the idea for many weeks, and may not have been able to move forward with the idea anyway because City Council Speaker Julie Menin immediately said it was off the table. After the proposal drew criticism, Mamdani distanced himself from the idea, saying it was intended only as “a last resort” but he has never assured New Yorkers it would not move forward.
While property taxes are the only taxes the city has the authority to raise without permission from Albany, Mamdani would have needed Council approval to do so. With Menin opposing the idea from the start, the idea did not seem likely to get off the ground.
Mamdani had insisted there were two paths out of the current budget crisis: raising personal income and corporate taxes, or raising property taxes. But he appears to have found a third path, either by identifying more savings or securing more revenue from Albany, or more likely a combination of the two.
Gov. Kathy Hochul last month introduced a pied-à-terre tax that would generate an estimated $500 million a year. It came as a concession from Hochul, who otherwise resisted Mamdani’s calls to tax the rich.
