Mayor Mamdani says he has balanced NYC's budget, will not raise property taxes

New York City Mayor Zohran Mamdani unveiled a new budget that taxes the rich, forgoes a property tax hike, and depends on the generosity of Gov. Kathy Hochul to fill a budget gap Mamdani called historic. 

Mamdani's gap reprieve came in the 11th hour. 

The mayor was unrepentant in his determination to tax the rich and create a city that is more hospitable to working New Yorkers. The lingering question is whether it will drive businesses out and hurt the tax base.

Watch the mayor's budget address

Mamdani said his preliminary budget proposal released 12 weeks ago, "reflected a straightforward reality. New York City was reckoning with an historic budget gap." 

To tackle the $12 billion gap he said he inherited, Mamdani sought more money from Albany, and threatened to raise property taxes. 

"In the month that followed, we took aggressive steps to tackle the deficit, and drove it down to $5.4 billion. Today, after three more months of painstaking work, I am proud to announce that we have closed the gap entirely down to zero. It has not been easy, but we have balanced the budget, and we have done so without placing the burden on the backs of working New Yorkers," Mamdani said. 

That remaining $5.4 billion has been filled with $4 billion in aid from Albany and $1.77 billion in savings, mostly through efficiencies and not filling vacant positions. Mamdani said he wouldn't tap into the city's "rainy day fund" to balance the budget. 

"We pulled New York City back from an existential fiscal brink"

Mamdani's new $124.7 billion budget proposal does not include a 9% property tax hike, which he included in his preliminary fiscal plan in an attempt to scare Albany into coming up with more aid. 

"Here's how we did it. We scoured for savings and demanded greater efficiency from every part of city government. 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. And we taxed the rich, asking those with the most to contribute a little bit more to support those with the least," Mamdani said. "We pulled New York City back from an existential fiscal brink." 

Mamdani praised Gov. Hochul. 

"For years, the relationship between City Hall and Albany has been defined by dysfunction and infighting. Gov. Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve. So we have worked together through every step of this process," Mamdani said. 

Mamdani went on to thank State Senate Majority Leader Andrea Stewart Cousins, Assembly Speaker Carl Heastie and City Council Speaker Julie Menin. 

"And finally, I want to thank the movement that carried us to City Hall, not only for winning an election, but for continuing to demand that the power we won be used to improve the lives of the many, rather than to protect the interests of the few," Mamdani said. 

The pied-à-terre tax

Mamdani's plan apparently worked, because even though the mayor didn't get a request for increasing corporate taxes, he got Hochul to back a new pied-à-terre tax on luxury second homes that hopes to raise $500 million annually.   

The proposal 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.

"You've got to cherish them"

President Trump, however, chided Mamdani for his tax-the-rich policies, saying he should cherish people like Griffin, because if you lose people like that, it's not recoverable. 

"You've gotta cherish them. You've gotta bring them to the office. You gotta meet them. You have to have dinner with them. You have to convince them not to leave. You're going to make their life great," Mr. Trump said on WABC radio. 

CBS News New York's Marcia Kramer asked the mayor if he was worried about reducing the city's tax base. 

"When you keep New Yorkers safe at what are now record levels, you also create the environment for others to choose this city as their home, and we look to every business leader and prospective business leader to keep considering this city," Mamdani said. "We want everyone to stay in the city, and we also want others to join them here in the city." 

"I see this as a win" 

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 annually. Sources in the state Legislature say approval of this tax is in play. 

Mamdani lauded the work of the chief savings officers his administration created in each agency. Cumulatively, they identified $1.75 billion in savings, the mayor said. 

Mamdani said his budget doesn't cut services, either, but saves money by finding efficiencies. 

"I see this as a win, not just for our administration, but for the city of New York. A win to ensure that the city is back on firm financial footing, and it's doing so by taxing the rich, by creating a fairer relationship with Albany, by finally accounting for the mismanagement we'd seen in prior years and embarking on a new chapter of an approach to budgeting that is honest and that is actually building for long-term stability," Mamdani said. 

All morning, the mayor held 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. 

State helping to close NYC's budget gap

Hochul and Mamdani announced the state secured an additional $4 billion to help with the deficit, bringing 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. 

Education and libraries

The money from Albany will also give the city $508 million by allowing the city to push back implementation of a mandate for smaller class sizes. Even with that, the city is committed to hiring 1,000 more teachers and spending $1.5 billion to build new schools. 

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

The budget also includes $500 million to renovate NYCHA apartments, and $256 million to restore vacant NYCHA units. 

Mamdani also did something other mayors have failed to do, which is to eliminate the annual budget dance where libraries, parks and cultural institutions were cut out so that the City Council could then restore them. Instead, there's $31 million for libraries, $15 million for parks, $10 million for cultural institutions and $25 million for the Fair Fare program. 

"Rather than cutting funding to these services, we will do the opposite, and raise the baseline of what they can expect, because we reject politics as usual and we reject a budgeting process that systematically erodes the bedrock of our city," Mamdani said. 

The mayor also proposed raising $68 million by reducing a city business tax credit that overwhelmingly benefits millionaires.

The budget also seeks $519 million in savings from the CityFHEPS voucher program, mostly through efficiencies. 

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 Menin's backing, sources say that plan is also hitting a dead end.