It’s a shocking side effect.
Mayor Zohran Mamdani’s plan to hike city property taxes by 9.5% could be a double whammy for residents in the increasingly unaffordable Big Apple — as the plan could send electric and gas bills soaring.
The democratic socialist mayor pitched hiking property taxes for the first time since the turn of the century to prop up his massive $127 billion budget proposal — but experts warn New York utilities Con Edison and National Grid would simply pass the extra costs on their properties to already cash-strapped residents.
“You’re not taxing Con Edison. You’re taxing the customers,” fumed John Howard, a former chairman and member of the state Public Service Commission, the entity that regulates energy utilities.
“The property tax on utilities in New York City is usury. The rate is so ridiculously high. The cost is passed along to the customers, and they don’t even know it,” said Howard, a longtime critic of taxing utilities.
He said raising the pass-along property tax on utilities counters Mamdani’s pledge to address the affordability crisis.
“We should not tax necessities this way — especially at a time of crisis when people can’t afford it. We don’t tax food,” Howard said.
Big Apple residents are already getting squeezed by the utilities — with average ratepayers in the city expected to have to dish out an extra $600 more per year by 2028, whether or not Mamdani’s hikes go through.
The PSC last month approved a three-year plan allowing Con Ed to increase electric bills by 10.4% and inflate gas bills 15.8% over the next three years.
A Con Ed spokesperson, asked about Mamdani’s property tax hike plan, said, “Taxes and fees already total more than $3 billion a year, which is about 30 percent of delivery charges.”
Taxes and fees account for 25% of National Grid’s monthly bills to customers.
A National Grid spokesperson said, “We haven’t seen an official proposal” when asked about Mamdani’s proposed property tax increase.
A PSC report released last fall on the impact of New York’s Climate change law concluded that New York’s taxes on Con Ed and National Grid– largely the property tax –were three-to-four times higher than the national average of 8%.
“New York utilities, and their customers, pay an outsized amount of non-income taxes, including property taxes, compared to utilities across the country,” the PSC said.
A PSC spokesman confirmed that Con Ed and National Grid property taxes are paid by their utility customers.
The mayor’s preliminary budget plan said the property tax rate overall would jump from 12.83% to 13.45% with the 9.5% rate increase.
The forecast does not say that utilities are excluded from a property tax increase.
Mamdani said the property tax is a plan B or last resort as he continues to push Gov. Kathy Hochul and the state Legislature to raise the income tax on millionaires and the corporate tax rate. Hizzoner has said he needs the extra dough to fill a multi-billion dollar budget hole while he also tries to implement a freebie-filled liberal agenda that includes free bus fares.
Hochul, a fellow Democrat who is seeking re-election to a second full four-year term, opposes Mamdani’s recommended tax hikes this year. There has been speculation that she might be more receptive to forcing the increase after she and other Democrats face voters in November..
Many City Council members — including Speaker Julie Menin — have called Mamdani’s proposed property tax increasedead on arrival.
Mamdani’s office had no immediate comment.
