Newly sworn-in Mayor Zohran Mamdani on Tuesday released his first preliminary budget proposal, introducing an ambitious $127 billion fiscal plan for the upcoming fiscal year and forcing a major showdown over how to close a looming budget gap. In comparison, the entire state of Florida just passed a $117 billion budget.

At the heart of the proposal is a threat laid out by Mamdani and his budget team: either Albany agrees to raise taxes on the city’s wealthiest residents and most profitable corporations, or New York City will be forced to consider a nearly 9.5 percent increase in property taxes — a move Mamdani calls a “last resort.”

Mamdani framed the choice as a matter of fiscal responsibility, saying the city faces an estimated $5.4 billion budget gap over the next two years. His preferred solution is higher income taxes on individuals earning over $1 million a year and increased corporate tax rates, proposals he has championed since his campaign but that have so far failed to gain traction in Albany.

“The city will be forced down the more harmful path of raising property taxes and drawing down reserves only if we cannot secure the fair contributions we need from the wealthiest New Yorkers and most profitable corporations,” Mamdani said at his budget presentation, calling a property tax hike “a painful option of last resort.”

Under the mayor’s numbers, a 9.5 percent property tax increase would affect more than 3 million residential units and roughly 100,000 commercial properties, generating an estimated $3.7 billion in revenue if adopted. Mamdani said he does not want to raise property taxes but is presenting the increase to emphasize the stakes without broader tax reform.

The budget plan also reflects recent state support, including a $1.5 billion funding infusion from Governor Kathy Hochul, intended to alleviate some of the immediate shortfall; however, Hochul has repeatedly said she opposes both higher income taxes on the wealthy and property tax hikes.