New York City once again finds itself at a political and fiscal crossroads. Mayor Zohran Mamdani has unveiled a preliminary $127 billion budget for fiscal 2027, warning of a $5.4 billion deficit and claiming that in the absence of new revenue tools from Albany, the city may have to increase property taxes on millions of residential and commercial properties by as much as 9.5 percent.
This is a serious mistake – not only because of its economic consequences, but also because of what it signals about governing philosophy in the nation’s largest city.
Property taxes are the most regressive form of taxation in local government. Unlike a tax on income or profits, property taxes are arbitrary: They hit elderly homeowners on fixed incomes, working-class families striving to build equity, and small business owners who are the backbone of local communities. These levies are not tied to a person’s ability to pay, but to a valuation that is often disconnected from cash flow. For a city already struggling with affordability pressures and the high cost of living, this is a recipe for further exodus and economic stagnation.
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To be fair, Mayor Mamdani sees this as a “last resort” or even a strategic lever to pressure Albany to raise taxes on the wealthy and on profitable corporations. But calling it a “last resort” doesn’t alleviate the damage. Mayors and governors negotiate hard: that is politics. But the collateral damage of a property tax increase would be felt in neighborhoods across all five boroughs: Rents rose as landlords passed costs on to tenants, small business margins were eroded and families were forced to choose between property ownership and financial survival.
It’s worth recalling that New York City hasn’t raised property taxes in any significant way since the Bloomberg era of the early 2000s, a moment of crisis that required extraordinary action. This current proposal comes not in response to an unprecedented disaster, but to a political impasse. It’s exactly the kind of budget deficit that punishes ordinary citizens for the inability of elected officials to come up with more responsible solutions.
Supporters of the increase will suggest that property taxes are the only leverage left, as the city cannot unilaterally raise income or corporate taxes without Albany’s blessing. But that is an abdication of responsible budgeting, not a defense of it. A mayor who claims to have inherited a “historic” budget gap that – with help and careful calibration of revenues – has been greatly reduced undermines the crisis narrative. Governor Kathy Hochul has already provided significant state aid to the city, closing the gap and undermining the argument that dramatic citywide tax increases are absolutely necessary.
Instead of squeezing more out of homeowners and Main Street merchants, City Hall should scrutinize wasteful and non-essential spending, streamline operations and find efficiencies within the $127 billion bureaucratic behemoth. The budget reflects priorities – and if spending choices do not reflect prudence in lean times, that is a political decision and not a budgetary necessity.
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Another troubling dimension is the broader economic signal this tax increase would send. New York City already competes fiercely with other global cities for business investment, talent and jobs. Other states with much more competitive tax regimes — including states with zero income taxes — have lured residents and businesses away from New York for decades. Another steep property tax increase only reinforces the narrative that New York’s economic prosperity comes at a price, accelerating the departure of demographics and businesses in a state that can least afford it.
More fundamentally, this episode highlights a deep misunderstanding of what good governance requires: balance, creativity and fairness. True leadership doesn’t simply balance the books on paper; it balances a city’s economic health with the vitality of its workforce and the sustainability of its middle class. That means resisting the impulse to raise taxes as a first line of defense and instead moving toward real spending reforms and economic growth strategies that don’t crush taxpayers.
Yes, cities sometimes have to make difficult choices. But pitting property owners and small businesses against the so-called wealthy is a false dichotomy. A thriving New York—one with robust job creation, resilient communities, and inclusive opportunities—will not be built by ruthless tax increases. It is built by unleashing economic potential, encouraging investment and ensuring that governance is efficient and fiscally disciplined.
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New Yorkers know this instinctively. They are hard-working people who have weathered years of rising costs and economic pressure. They just want the city to spend money wisely, and leaders should respect that.
Mayor Mamdani must go back to the drawing board and work with the city council, stakeholders and the state to find growth-enhancing solutions. Raising property taxes – not to mention wealth taxes – should not be on the table – and certainly not as a bargaining chip in political negotiations. Let’s pursue growth, reform, and opportunity – not tax increases that threaten to send New York backward.
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