During testimony before the New York State Senate’s 2026 budget hearing, Mamdani, a Democrat, said the city’s budget gap has decreased from US$12 billion to US$7 billion by “assuming an aggressive posture on savings without compromising city services, incorporating updated revenue and bonus estimates, and using in-year reserves.”

Despite a narrowing of the budget shortfall, Mamdani said, New York is “placed on a ledge”.

“I believe the wealthiest individuals and most profitable corporations should contribute a little more so that everyone can live lives of dignity,” said Mamdani, who will release the city’s preliminary budget on Tuesday.

“That’s why — along with raising the corporate tax — I’m asking for a 2% personal income tax increase on the most affluent New Yorkers.”

Mamdani said a 2% tax increase would resolve nearly half of the city’s budget deficit. He campaigned to increase the New York corporate rate from 7.25% to 11.5%.

Democratic New York Governor Kathy Hochul would have to approve any tax increases proposed by Mamdani.

A spokesman for Hochul did not immediately respond to a request for comment.

The governor, who presented her budget last month, has reiterated her opposition to any tax hikes in the state.

“We’re able to make transformative investments in our future. Without raising taxes. Without saddling the next generation with mounds of debt,” Hochul said last month.