New York City began its 2027 fiscal year with a $125.8 billion spending plan but without Mayor Zohran Mamdani’s proposed income-tax increase on millionaires. The City Council approved the agreement on June 30, 2026, after negotiations between Mamdani and Council Speaker Julie Menin.
The city’s newly adopted budget avoided a previously discussed property-tax increase and added $350 million to general reserves. It also preserved funding for housing vouchers, libraries, parks, reduced-fare transit, and college savings accounts for public school kindergarten students.
Millionaire growth trails rival states.
The budget deal closed the immediate gap, but it did not settle a larger dispute over New York’s tax base. Mamdani wants wealthy residents and profitable corporations to contribute more toward public services. Critics argue that higher rates could push mobile earners toward lower-tax states.
New York’s share of national millionaires fell from 12.7% in 2010 to 8.7% in 2022. That was the largest percentage-point decline among the states examined in the fiscal review.
The number of millionaire filers in New York still rose sharply. It increased from 35,802 in 2010 to 69,780 in 2022. The state lost its national share because millionaire populations grew much faster in California, Florida, and Texas.
New York City followed the same pattern. Its national share dropped from 6.5% to 4.2%, although the city still had 33,765 millionaire filers in 2022.
New York State could have collected an estimated $10.7 billion more in personal income taxes that year if its 2010 share had held. The comparable estimate for the city was $2.5 billion.
Those figures do not represent documented revenue carried across state lines. They measure the potential taxes that New York might have retained or attracted under a different growth path.
Departures ease after pandemic peak
Wealthy residents do leave New York, but the pace has slowed since the pandemic. After the 2020 peak, millionaire departures declined steadily as fewer high-income filers changed their addresses to other states.
More than 3,300 millionaire filers changed addresses in 2020. The number fell to 2,744 in 2021, 2,366 in 2022, and 1,679 in 2024.
The 2024 total accounted for about 2.5% of the millionaire filers in the state’s address-change data.
The decline weakens claims that New York is experiencing a continuously accelerating exodus. It does not remove the financial risk created when a small number of top earners relocate.
High-income households account for an unusually large share of New York’s personal income tax revenue. Their earnings can also change quickly because they often include bonuses, business profits, investment gains, and stock compensation.
A departing household can therefore remove far more taxable income than an average wage earner. Even residents who stay can reduce taxable activity by delaying transactions, restructuring compensation, or shifting business decisions.
Taxes are not the only factor. Housing prices, remote work, public safety, schools, transportation, family ties, and access to professional networks can influence relocation choices.
Mamdani faces resistance in Albany.
Mamdani’s proposed millionaire tax increase would add two percentage points to the personal income-tax rate for people earning more than $1 million annually. He also supports raising the state corporate rate for the most profitable companies.
New York City cannot approve those changes on its own. The governor and state Legislature must authorize major revisions to the city’s income-tax structure.
Gov. Kathy Hochul has opposed broad personal income-tax increases. That resistance left Mamdani without a central part of the revenue plan he promoted during his campaign.
The dispute carries unusually high stakes because New York City residents already face both state and local income taxes. Florida and Texas impose no broad state individual income tax, giving wealthy residents a clear financial incentive to consider moving.
Supporters of higher taxes argue that most wealthy residents remain tied to New York through businesses, families, cultural institutions, and financial networks. They also say reliable transit, affordable housing and strong public services can improve the city’s competitiveness.
Opponents say New York cannot assume those connections will outweigh rising costs forever. Remote work has made it easier for executives, investors and entrepreneurs to live elsewhere without fully leaving New York’s business community.
Budget agreement delays central fight.
The final budget allowed Mamdani and the council to avoid immediate service cuts while setting aside more money for reserves. It also expanded several affordability programs that formed part of the mayor’s governing agenda.
However, the agreement did not create the recurring income-tax revenue Mamdani had sought. Future budgets could face the same conflict if spending grows faster than existing revenue.
The next phase will depend on updated tax collections, migration patterns, and negotiations with Albany. City officials must also track whether high earners continue returning to pre-pandemic mobility levels or begin leaving at a faster pace.
For now, New York has more millionaires than it did a decade ago, but a smaller share of the nation’s total. Mamdani must show that the city can fund an ambitious agenda without weakening the narrow group of taxpayers who supply a major share of its revenue.
That balance will shape the next state budget debate in Albany.
