NYC Mayor Zohran Mamdani on Tuesday unveiled a staggering $127 billion budget proposal — the largest in city history — igniting an immediate political firestorm over steep tax hikes, deepening deficits, and fears that City Hall is gambling with New York’s financial future.

The preliminary budget, presented from the Blue Room at City Hall, is roughly $11 billion higher than the current spending plan and would be fueled in part by a proposed 9.5 percent property tax increase, along with a $1 billion drawdown from the city’s rainy day fund.

“This is insanity,” an insider told the New York Post. “Property taxes haven’t been raised like this since 9/11.”

Mamdani insisted the tax increase is a “last resort,” blaming Albany for refusing to raise taxes on wealthy New Yorkers.

“The options of the second path are the options of last resort,” Mamdani said. “We will only employ them if there is no other way to balance the budget.”

The mayor has repeatedly urged Gov. Kathy Hochul to approve higher taxes on millionaires and corporations. While Hochul recently announced $1.6 billion in additional state aid, she has declined to endorse Mamdani’s “tax the rich” agenda, leaving City Hall preparing to shift the burden onto property owners.

Critics warn that draining reserves while raising taxes could rattle bond markets and weaken the city’s borrowing power.

Resistance emerged quickly from the City Council. Speaker Julie Menin, joined by Finance Committee Chair Linda Lee, warned that the mayor’s approach could worsen the affordability crisis.

“At a time when New Yorkers are already struggling, dipping into reserves and proposing major tax hikes should not be on the table,” they said in a joint statement.

Council leaders said they believe additional savings and revenue options remain unexplored and vowed to release their own fiscal projections ahead of budget hearings in March.

The proposal includes another $1.2 billion for migrant services, bringing total spending on asylum seekers to more than $10 billion over the past five years. While shelter populations have dropped significantly, the costs remain a major driver of the city’s fiscal strain.

Mamdani acknowledged that New York faces a $5.4 billion budget gap, down from $12 billion earlier this year after stronger-than-expected Wall Street tax revenue.

“Our deficit is still a significant chasm,” he said.

The mayor said aggressive savings efforts could generate $1.7 billion over two years, but conceded that cuts alone will not close the gap.

“I cannot tell New Yorkers that additional savings are likely in the next few months,” he said.

Business leaders and landlords responded with fury.

Steven Fulop, CEO of Partnerships for New York City, called the tax hike a political pressure tactic and warned it ignores New York’s competitive challenges.

Small property owners were even more blunt.

“Owners are sick and tired of being treated like ATM machines,” said Ann Korchak of Small Property Owners of New York. “This will drive families into foreclosure and bankruptcy.”

She accused Mamdani of “declaring war” on immigrant landlords and pushing policies that could accelerate the conversion of private housing into public control.

Under the proposal, 40 percent of the budget would go to the Department of Education, 26 percent to social services, and 12 percent to uniformed agencies. The remainder would fund other city departments.

Mamdani argued that higher taxes are “structural solutions” needed to preserve his affordability agenda, including universal childcare and free buses.

“These solutions give us the foundation to move forward,” he said.

(YWN World Headquarters – NYC)