New York City Mayor Zohran Mamdani on Tuesday rolled out a proposed $127 billion budget, warning state leaders that if they refuse to approve higher taxes on wealthy residents, he will move forward with a significant increase in city property taxes.

The self-described democratic socialist characterized the spending plan as a fallback option to close projected gaps if Gov. Kathy Hochul declines to support raising taxes on high earners. His blueprint would also tap into the city’s $10 billion reserve fund.

“I do not want to raise property taxes,” Mamdani said of his preliminary budget plan, which would hike property taxes 9.5% to raise an additional $3.7 billion in the next fiscal year.

“When faced with this crisis, the question is who should pay these taxes? I believe that it should be the wealthiest New Yorkers, the most profitable corporations. I believe that they can afford to pay a little bit more,” Mamdani said.

The announcement begins what is expected to be months of budget talks with key city officials, including City Council Speaker Julie Menin, who quickly rejected the idea of higher property taxes.

“At a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever,” Menin wrote in a statement.

Hochul, who is up for reelection this year and whose approval would be needed for changes to state income tax rates, likewise indicated she does not back a property tax increase, though the mayor would not require Albany’s consent to enact one.

“I’m not supportive of a property tax increase, I don’t know that that’s necessary,” Hochul told reporters Tuesday during an unrelated event.

Additional officials at City Hall also criticized the proposal.

“This is insanity,” one insider told The Post. “Property taxes haven’t been raised since 9/11.”

The same source warned that drawing heavily from city reserves could damage New York’s bond rating, calling the move a “major red flag” that might weaken the city’s ability to borrow.

If adopted, Mamdani’s plan would increase overall spending by roughly $11 billion compared to the current fiscal year, allocating new money for expanded legal services, homeless assistance programs and other initiatives.

The proposal follows Hochul’s announcement a day earlier that the state would provide an additional $1.5 billion in aid to the city, amid Mamdani’s repeated appeals to raise income taxes on affluent New Yorkers.

The mayor is seeking a 2% income tax increase targeting approximately 33,000 residents earning more than $1 million annually.

In recent weeks, Mamdani has repeatedly highlighted what he describes as looming fiscal trouble, using those warnings to press Albany to embrace his push to increase taxes on top earners.

Just three weeks ago, he estimated the city’s deficit at $12 billion. That figure shifted after updated revenue projections showed tax collections — largely fueled by Wall Street bonuses — coming in 24% higher than the previous year.

Last week, Mamdani said his budget team had reduced the shortfall to $7 billion. Then, in a post on X Tuesday morning, he announced the projected gap had fallen further to $5.4 billion.

{Matzav.com}