New York City Mayor Zohran Mamdani said that homeowners and property owners could face a tax increase if state lawmakers decline to approve his proposal to raise income taxes on high earners.

While unveiling the city’s preliminary budget for fiscal year 2027, Mamdani stated that a 9.5% increase in property taxes would be imposed on certain residents if Albany refuses to authorize a 2% income tax hike targeting wealthy New Yorkers.

“There are two paths that we can walk: One that offers long-term stability, and a second one with significant pain that we deeply hope to avoid,” Mamdani said.

According to the mayor, the possible property tax hike would impact more than three million residential properties as well as over 100,000 commercial buildings, though The National News Desk (TNND) was unable to independently verify those figures. The proposed wealth tax would apply to individuals earning more than $1 million per year.

Governor Kathy Hochul appeared to temper the mayor’s warning. Speaking at a separate press conference, she said she was not convinced that such an increase would ultimately take place, telling Spectrum News NY1 that she wasn’t “certain there’s a property tax increase.”

“[The city] is required by law to announce where it is today, but it’s not resolved until there’s a lot of negotiation with the city council and a review with his budget team of what their real expenses are and what they need to be, and that’s not due until July, so there’s a lot of time to work this out,” Hochul explained.

City officials have reported a $5.4 million budget gap. Mamdani has argued that the current financial strain stems from decisions made by his predecessor, former Mayor Eric Adams, accusing him of mishandling the city’s finances. Adams, however, has defended his approach to managing the budget.

Mamdani described the deficit as a “steep mountain,” saying it can be addressed if the city’s financial relationship with the state is recalibrated. He contended that New York City has been sending more money to Albany than it receives in return.

“We know that for far too long, New Yorkers have given far more to the state than what we have received in return,” the mayor said. “It is time to end the drain.”

Although Hochul did not respond to TNND’s request for comment, she announced Monday that the state would direct $1.5 billion to assist New York City in managing its fiscal challenges. In that announcement, she emphasized her support for the city and noted that she has also pledged to expand universal childcare, a key plank of Mamdani’s campaign platform.

“A strong New York City means a stronger New York State,” Hochul said.

“New Yorkers expect the state and the city to work together, and I’m proud to partner with the Mayor to deliver for working families,” the governor added.