New York, New York - New York Mayor Zohran Mamdani backtracked on promised property tax hikes, announcing a city budget Tuesday that supporters see as a necessary compromise.

Mamdani (34) was swept to office in January on a wave of support for his Democratic socialist policies that had included free bus travel, city-run superstores – with higher property taxes helping to pay for this.

But opposition from the state government and members of the city council apparently led the insurgent former state legislator to pursue other measures to help plug New York's budget deficit that reached around $12 billion.

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As recently as February, Mamdani had wanted to raise property taxes for all owners by 9.5% – a measure that would have raised $3.7 billion but needed the approval of both the centrist state governor and New York's legislature.

Mamdani said the $124.7 billion budget for the 2027 fiscal year had been balanced, and will now go to the city council for a vote.

"This budget does not raise property taxes, and it refuses to slash services," Mamdani said as he announced his first budget to reporters.

"We pulled New York City back from an existential fiscal break."

Mamdani will, however, be able to claim victory after previously securing support for a tax on non-primary residences valued at $5 million or more, dubbed the "pied-a-terre tax," that is forecast to bring in more than $500 million of revenue annually.

Alongside those new revenues, the budget gap will also be closed with technical measures, including the state giving permission for the city to restructure pensions and allowing the Big Apple flexibility on school class sizes.