NYC Mayor Mamdani expected to scrap plans to raise property taxes in budget

All eyes are on New York City Mayor Zohran Mamdani, who is revealing his first executive budget for the next fiscal year Tuesday. 

The plan is expected to include ways to close the city's multi-billion-dollar budget gap.

The money won't come from raising property taxes, nor will the Mamdani be tapping into the city's "rainy day fund" to balance the budget, sources told CBS News New York's Marcia Kramer. 

Sources in Albany say New York City asked for a new tax on cash sales of luxury apartments valued over $1 million, which is expected to raise $100 million. Sources in the state legislature say approval of this tax is in play. 

You can watch the mayor's budget live at 1:30 p.m. on CBS News New York's YouTube channel.

State helping to close NYC's budget gap

New York Gov. Kathy Hochul and Mamdani announced the state secured an additional $4 billion to help with the deficit.

This brings the total new state assistance to nearly $8 billion over two years. 

"With this latest agreement, the Mamdani administration will officially close the more than $12 billion deficit it inherited from the previous administration, stabilizing the City's finances while advancing investments that make New York more affordable for working people," a news release stated. 

Hochul's opponent in the New York governor's race, Republican Nassau County Executive Bruce Blakeman, blasted that move, calling it a "daylight robbery."

"Kathy Hochul just committed the largest daylight robbery in New York history, looting $4 billion from your family's grocery and rent budget to bankroll Zohran Mamdani's socialist experiment," Blakeman said in a statement. "She's taking money from police and schools around the state to fund a radical agenda, but when I'm Governor, the stealing stops. I'll cut your taxes, slash your utility bills in half, and put your hard-earned money back where it belongs—in your pocket, not Mamdani's." 

While the state budget is still being negotiated, it already has $28 billion carved out in total aid for the city. 

"With this governor, what we've seen, however, is a commitment to the city, and in a moment where we inherited an incredible fiscal deficit, we've seen her partnership in helping us bridge that," Mamdani said. 

Mamdani's promises meet political reality

It's a pivotal moment for New York City's new democratic socialist mayor, who ran - and won - on the idea of taxing the rich, which Hochul vowed not to support. 

Raising property taxes is the only increase the city could authorize without Albany, but without the backing of City Council Speaker Julie Menin, sources say that plan is also hitting a dead end. 

Mamdani appears to have found a third path to close the $5.4 billion shortfall for the 2027 budget, which includes the newly-announced $4 billion in state aid. 

Education costs and the budget

With Albany's budget yet to be finalized, the mayor has to find other ways to balance the budget. Education funding is an open question, with the mayor potentially saving millions of dollars by delaying the implementation of class size mandates. Mamdani has said he's open to that plan, but it has not yet been finalized. 

Sources in Albany say the legislature is looking to delay the implementation of the class size reduction, which would save as much as $1 billion. 

What's more, the mayor has asked for a 4-year extension on mayoral control of schools, but Albany sources say he'll only receive two. 

The pied-à-terre tax

The city's movers and shakers will be keeping a close eye on the so-called pied-à-terre tax, targeting luxury, non-primary residences in the city. 

The tax proposal would add an estimated $500 million annually in city revenue, and is already drawing sharp criticism from billionaires like Citadel CEO Ken Griffin.

Griffin became the poster boy for the tax when Mamdani called him out by name in front of his $238 million penthouse. 

"With 1% of New York taxpayers paying 45% of all the taxes, the city is in a precarious position if they make those who create value feel like they're best off moving their businesses and their lives to other jurisdictions," Griffin said in an interview on CNBC. 

Details like the tax rate, who exactly will pay, and whether it will be based on assessed value or actual market value have not been worked out.

All morning, the mayor has been holding meetings with the city's top leaders, including Menin, Public Advocate Jumaane Williams, and borough presidents, trying to find common ground on the top budget priorities, with billions on the line. 

The mayor is set to present the budget at 1:30 p.m. this afternoon.