No rise on NYC property tax as state pitches in $4B to close city budget gap

Mayor Zohran Mamdani won’t try to boost New York City’s property taxes after all.

With an arrangement with Gov. Kathy Hochul for $4 billion from the state — bringing the money to $8 billion over two years — to close New York City’s budget gap for the fiscal year, Mamdani is no longer seeking property tax increases.

Mamdani and Hochul announced the plan on Tuesday morning.

 The $4 billion state package is patched together through several sources of funding, according to Kara Cumoletti, of Hochul’s office. Among them is more than $2 billion through pension amortization (delaying payments), $150 million in additional school aid, more than $200 million in various cost shifts and at least $500 million through a new tax on luxury second homes. Hochul and legislative leaders have agreed to enact a "pied a terre" tax but haven’t settled on rates, other than saying it would apply to second homes valued at $5 million or more. 

The office of the city council speaker, who would have needed to green light a property tax increase, said the property tax increase, which Mamdani had threatened earlier this year absent state money, was no longer being pursued.

Still, the plan had been moribund from the start, as the speaker, Julie Menin, had ruled it out not long after Mamdani had proposed it.

In a statement, Hochul said helping the city helped the state, what she called "gap-closing support."

"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," she said in a statement.

Mamdani's increase on the average home would have been roughly $700.

Mandani blamed the gap in his nearly $130 billion budget on his predecessor Eric Adams' accounting methods.

Experts told Newsday that even had Mamdani managed to increase property taxes, there would be no appreciable exodus to Long Island because property taxes are so high there.

In a statement, Menin expressed relief that, coupled with savings, the money from the state "avoids raising property taxes or raiding reserves."

Newsday's Yancey Roy contributed to this story.

By Matthew Chayes

matthew.chayes@newsday.comchayesmatthew

Matthew Chayes, a Newsday reporter since 2007, covers New York City.