Zohran Mamdani's first executive budget as New York City mayor will not include a property tax increase.
The democratic socialist mayor is expected to formally abandon his proposal to raise property taxes nearly 10% after months of backlash from homeowners, business leaders, and even fellow Democrats worried the move would further damage New York's struggling economy.
Mamdani's executive budget instead will rely heavily on billions of dollars in additional state aid negotiated with Gov. Kathy Hochul to help close the city's budget deficits, multiple outlets reported.
Hochul and Mamdani announced Tuesday that Albany approved another $4 billion in support for New York City, bringing 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," a joint statement from the governor’s office said.
Mamdani previously warned the city faced what he called a "generational fiscal crisis" and argued a property tax increase was necessary unless the state approved higher taxes on wealthy residents and corporations.
Earlier this year, he proposed a 9.5% property tax hike that would have generated roughly $3.7 billion annually.
Raising property taxes was one of the few actions to address New York City's financial challenges that would not have required state approval.
The proposal quickly ran into resistance from the City Council and alarmed financial analysts already concerned about New York’s deteriorating fiscal outlook, Bloomberg reported.
Credit rating agencies recently shifted the city's outlook to negative, citing structural budget problems and concerns about spending under Mamdani's administration.
The mayor's decision to back away from the tax increase comes as wealthy residents and major employers warn that New York risks driving out the taxpayers who fund much of the city’s budget.
Citadel founder Ken Griffin recently blasted Mamdani's economic agenda and doubled down on plans to expand in Miami instead of Manhattan after the mayor publicly targeted luxury second homes in support of a proposed "pied-à-terre" tax.
"We need to double down on our bet in Miami," Griffin said earlier this year, arguing New York has become hostile toward business and economic success.
The proposed pied-à-terre tax, backed by Hochul, would impose annual surcharges on second homes in New York City valued above $5 million, CBS News reported.
The measure is projected to generate roughly $500 million annually, though details remain under negotiation in Albany.
Republicans criticized Hochul's bailout package for the city.
Nassau County Executive Bruce Blakeman, who is challenging Hochul for governor, called the additional funding "the largest daylight robbery in New York history."
"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.
Critics warn that New York's increasing dependence on a shrinking pool of wealthy taxpayers leaves the city vulnerable as more businesses and high earners relocate to lower-tax states such as Florida and Texas.
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