Mayor Mamdani’s Budget Dilemma: Uncollected Taxes vs. Property Tax Hike
Rather than taxing affluent citizens, Mayor Zoran Mamdani could consider addressing New York City’s expected $5.4 billion budget shortfall by collecting overdue taxes and fines from those who haven’t paid.
As of June 30, the city faced a staggering $5.35 billion in outstanding property taxes that have accumulated over the past decade. This surprising statistic is often overlooked by the public. It comes from a lengthy report released in October by then-Comptroller Brad Lander, who shares similar political views.
This amount aligns closely with what Mamdani claims is necessary to cover the city’s budget gap. At the same time, he has been proposing nearly a 10% increase in property taxes unless Governor Kathy Hochul and Albany’s authorities agree to his “tax the rich” plan.
Moreover, the city has also neglected to collect an additional $1.3 billion in fines from the Environmental Control Commission, usually imposed for violations of construction, zoning, and safety codes.
According to Treasury reports, around $744 million of these fines is deemed “irrecoverable.” The Treasury plans to take actions to recover the remaining $573 million.
When you combine the unpaid taxes and penalties, the figure skyrockets to an astounding $6.7 billion.
For the fiscal year 2025 alone, the property tax liability is alarmingly high, standing at $707,476,309, with nearly 13% of all properties in New York City being behind on payments.
Recently, the city sent out 141,357 notices to property owners who owe taxes—about 12.7% of the 1,114,669 individual tax parcels in the city, as confirmed by the City Finance Department.
Among the notable offenders is the historic Roosevelt Hotel in Midtown, owned by the Pakistani government, which owes $13.6 million in unpaid taxes. This is particularly striking given that the hotel had collected $146.6 million from taxpayers during its two-year operation as a migrant shelter.
Kenny Burgos, CEO of the New York Apartment Association, raised eyebrows at the situation. “This delinquency rate is almost three times the national average for property taxes. So, does the mayor really want to raise property taxes?”
Mamdani’s approach to the budget and proposals like a tax hike have led to conflicting views. He stated that “the people who are left behind in the city are not the luxury developers receiving significant tax breaks; rather, they’re the owners of buildings that provide affordable rentals. They’re already struggling under heavy taxation.”
Stephen Fulop, president and CEO of the Partnership for New York City, commented on the concerns, saying that unpaid taxes are a major issue. He noted, “The increasing tax burdens make it difficult for property owners to keep their heads above water, while inconsistency in enforcement allows debts to pile up. It’s critical to strengthen enforcement and bring some discipline back into the system, possibly using new technologies like AI.”
Council President Julie Menin, who has often disagreed with Mamdani over budget solutions, emphasized the importance of using new legislation that simplifies the collection of property tax debts. “Our council revamped tax lien sales to create a fairer system that still generates revenue while holding wrongdoers accountable,” she mentioned.
Menin insisted, “There’s simply no justification for allowing billions of dollars in unpaid taxes to remain uncollected. The city needs to initiate programs to reclaim what’s owed.”
Mamdani’s spokeswoman, Dora Pekek, defended his stance, saying, “The suggestion that we need to rush tax lien sales is misleading. Mayor Mamdani has put a six-month freeze on these sales for a thorough evaluation to enhance collections and minimize evictions of working-class homeowners throughout the boroughs.”
