Mayor Zohran Mamdani told state lawmakers Monday he still wants authority to raise taxes on wealthy New Yorkers, even though the city’s budget deficit came in smaller than expected this year.

The mayor’s office projected a $7 billion shortfall last fall, but revised estimates now put the gap at $5.1 billion through fiscal 2028. Despite the improvement, Mamdani said the city needs new revenue streams to avoid deep cuts to services.

“We can’t balance budgets on the backs of working families,” Mamdani said during a virtual meeting with the Assembly Ways and Means Committee. “Albany has the power to give us the tools we need.”

The mayor wants lawmakers to approve a so-called “millionaire’s tax” that would add a 1% surcharge on city residents earning more than $1 million annually. City Hall estimates the levy would generate $800 million in the first year.

Assembly Speaker Carl Heastie, a Bronx Democrat, gave the proposal a lukewarm reception. “We’ll review all revenue options,” Heastie said after the hearing. “But we need to see the full budget picture first.”

Business groups immediately pushed back. Kathryn Wylde, head of the Partnership for New York City, said the tax would drive wealthy residents to Florida and New Jersey. “We’re already seeing an exodus,” Wylde said. “This makes it worse.”

The improved deficit numbers stem from stronger-than-expected tax collections and federal aid that lasted longer than projected. Property tax revenue jumped 4.2% last quarter, while business taxes exceeded forecasts by $300 million.

But Budget Director Maria Torres warned the good news won’t last. Rising pension costs, union contracts and debt service will strain city finances starting in fiscal 2026, she told lawmakers.

“The structural problems haven’t gone away,” Torres said. “We’re buying time, not solving the crisis.”

Mamdani faces resistance from his own party. Queens Councilman Robert Holden said Democrats should focus on cutting spending before raising taxes. “Families are struggling with inflation,” Holden said. “The last thing they need is higher taxes on job creators.”

The mayor plans to release his executive budget proposal next month. Without new revenue, the administration would need to cut 15,000 city jobs and reduce spending on parks, libraries and social services by 10%.

Governor Kathy Hochul hasn’t taken a position on the city tax proposal. Her budget director said the state is “reviewing all options” to help New York City balance its books.