Mayor Zohran Kwame Mamdani painted a pretty dire picture with the announcement of his preliminary budget. Mamdani conceded that a failure to implement a “tax the rich” policy would force an increase in property taxes.
The Fiscal Year (FY) 2027 Preliminary Budget is an estimated $127 billion at the moment.
Mamdani’s administration managed to whittle away an initial $12 billion budget gap coming into office. This deficit was because of billions in “unfunded needs and mandates” that hadn’t been sufficiently dealt with in previous administrations across city sectors, like health insurance, education, early childhood education, supportive housing, Medicaid, and non-profits.
Through an “aggressive savings plan,” revenue estimates, dipping into reserves, and a $1.5 billion two-year commitment from Gov. Kathy Hochul, the budget gap is down to an estimated $5.4 billion. That remaining deficit is still a problem for Mamdani.
“There are two paths to bridge this gap. The first is the most sustainable and the fairest path. This is the path of ending the drain on our city and raising taxes on the richest New Yorkers and the most profitable corporations. The onus for resolving this crisis should not be placed on the backs of working- and middle-class New Yorkers,” said Mamdani in his press conference on Feb. 17.
His proposal leans heavily on a state allowance to put a tax on the wealthy, a bold campaign promise of his, to fix it. This would amount to a 2% raise on personal income taxes on about 33,000 New Yorkers earning more than $1 million a year and on corporate taxes on the most profitable corporations. However, Hochul, who is running for re-election this year, has gone on record as opposing that policy.
“If we do not fix this structural imbalance and do not heed the calls of New Yorkers to raise taxes on the wealthy, this crisis will not disappear. It will simply return year after year, forcing harder and harsher choices each time,” he continued.
As a controversial back-up plan, Mamdani said that the city would be forced to resort to raising property taxes. This would effectively be a 9.5% tax on over 3 million working- and middle-class New Yorkers who have a median income of $122,000 and a raid on city reserves totalling $980 million for fiscal year 2026 and $229 million from the Retiree Health Benefit Trust in fiscal year 2027.
“But let me repeat what I have said many times this morning. This is the preliminary budget,” said Mamdani. “We will do everything in our power so [the] budget reflects the first path, a path that ends the drain and asks the wealthiest among us and the most profitable corporations to contribute that little bit more so that working New Yorkers do not bear the burden of this financial crisis.”
As outlined in the financial plan, the bulk of the budget will be going towards education. About $2.2 billion is set aside for Universal Pre-K and $582.6 million for early childhood education investments.
There’s a portion dedicated to deportation defense and immigration legal services with $11.6 million for Mayor’s Office of Immigrant Affairs (MOIA) Legal Support Centers and $21.2 million for immigration deportation defense and other legal services.
Another portion of the budget is going towards social services and homeless services departments.
To address street homelessness and individuals with severe mental health challenges, Mamdani is dedicating $5 million in FY 2026 for warming centers and shelter connections for homeless New Yorkers, $11.9 million in FY 2027 for new Street Health Outreach & Wellness (SHOW) mobile units, and a new Bridge to Home site. However, some organizations were livid over the rollbacks to City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) vouchers. On the campaign trail, Mamdani promised to bolster the CityFHEPS voucher program as a means of permanent housing for homeless New Yorkers living in shelters.
Mamdani is also launching a savings initiative that requires every city agency to designate a Chief Savings Officer (CSO) to identify recurring efficiencies and make cuts.
His preliminary Five-Year Capital Plan includes $662 million to preserve more than 3,200 affordable-housing units and $48.2 million to renovate Bellevue’s Adult Comprehensive Psychiatric Emergency Program.
On Feb. 20, to clear up confusion and panic over the possible rise in property taxes, Mamdani took to Instagram to answer publicly submitted questions.