NYC Scraps Property Tax Hike

NEW YORK, NY— Gov. Kathy Hochul and Mayor Zohran Mamdani announced a new $4 billion state aid package that will allow New York City to close a multibillion-dollar budget gap without raising property taxes.

The agreement, unveiled ahead of Mamdani’s Fiscal Year 2027 executive budget release, brings total new state support for the city to nearly $8 billion over two years.

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City officials said the funding will erase a deficit that exceeded $12 billion when Mamdani took office.

The deal also kills Mamdani’s proposed nearly 10 percent property tax increase, a plan that faced opposition from City Council members and concern from credit rating agencies. Any increase would have required council approval.

“From day one, I have been committed to ensuring New York City succeeds, because a strong and stable City means an even stronger New York State,” Hochul said.

The governor said the agreement will fund universal child care, education, public safety and infrastructure while helping the city maintain core services.

“This is what a results-driven, responsible partnership looks like and I’m proud to work with Mayor Mamdani to deliver for working New Yorkers,” Hochul said.

Mamdani framed the agreement as a break from years of political clashes between Albany and City Hall.

“For years, the relationship between City Hall and Albany has been defined by dysfunction and infighting,” Mamdani said. “Governor Hochul and I, however, share a belief that government works best when we work together on behalf of the people we serve.”

The Mayor had argued the tax hike remained one of the few options available without state authorization. Proposals to raise income or corporate taxes would require approval from Albany.

Credit rating agencies shifted the city’s outlook to negative after Mamdani released his preliminary budget proposal, citing long-term structural deficits and plans to use nearly $1 billion from city reserves to help close the gap.

For months, Mamdani described the city’s finances as “a generational fiscal crisis” comparable to the Great Recession.

He repeatedly pushed for higher taxes on wealthy residents and corporations, proposals Hochul resisted.

The new state funding builds on $1.5 billion in assistance Hochul announced earlier this year, including support tied to universal child care initiatives.