Looks like NYC's communist mayor has had second thoughts about extracting more taxes by raising New Yorkers' property taxes - something he vowed to do to help close a two-year deficit.
According to Bloomberg, the decision to drop the tax hike will be included in Mamdani's executive budget released today, which will mark the latest version of his spending plan for the fiscal year beginning July 1.
This is separate from a tax on second homes (the so-called pied-à-terre) that was initiated by Governor Kathy Hochul - which is still under consideration as part of state budget negotiations.
Earlier this year, Mamdani threatened to raise property taxes by nearly 10% as a way to lobby Hochul for more funding. He had little support for an across-the-board increase, with City Council members including Speaker Julie Menin opposing the plan. Any increase would have needed to be passed by that chamber. -Bloomberg
Mamdani's preliminary budget proposal earned the city a credit rating downgrade to negative, citing the city's long-term structural problems. He also proposed raiding the city's emergency savings account for $1 billion to help close the gap.
On Tuesday, Hochul and Mamdani announced that the state would slide NYC an additional $4 billion to help close the budget gap that Mamdani has called a "generational fiscal crisis" rivaling the Great Recession. To fix this, his only solution has been higher taxes on the wealthy and corporations - because heaven forbid they slash spending to a meaningful degree (or at all).
This reversal comes amid a great exodus of wealth from New York State.
The decision to drop the across-the-board property tax hike unfolds against the backdrop of a sustained and accelerating departure of high earners, businesses, and capital from New York City and the state. New York has already lost tens of billions in tax revenue as residents and employers relocate to lower-tax states.
NYC has recorded a net loss of roughly 220,000 residents since 2021. In the past two years alone, approximately 6,000 businesses have closed or moved out. The damage is concentrated among the taxpayers who fund the majority of city services: the top 1 percent of earners contribute more than 40 percent of income tax revenue, and that group is leaving in disproportionate numbers. More than 125,000 New Yorkers have relocated to Florida in recent years, taking nearly $14 billion in adjusted gross income with them.
A May 2026 analysis noted that repeated tax increases intended to offset lost revenue have only driven more departures, with the city suffering significant wealth decline as a direct result. An April 2026 piece warned that Mamdani’s broader tax agenda - including hikes on high earners and the pied-à-terre tax still advancing at the state level - risks accelerating the migration of wealth and businesses to states like Florida, Texas, and the Carolinas. Even Governor Hochul has publicly implored wealthy taxpayers to stop leaving, underscoring how severe the fiscal pressure has become.
By walking back the property tax increase, Mamdani is confronting the hard limit of his strategy: the very people and companies needed to fund expansive spending are already voting with their feet. Yet the state continues to push additional taxes on second homes and corporations, meaning the underlying incentives fueling the exodus remain firmly in place. The wealthy are not waiting for further experiments - they are leaving.
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