The city has many other sources of revenue, but 5% is difficult to replace. If you wanted to replace those 5% by raising taxes on those >$500k households, you'd

The city has many other sources of revenue, but 5% is difficult to replace. If you wanted to replace those 5% by raising taxes on those >$500k households, you'd have to increase those people's tax bills by a quarter, which is enough to provoke strong protest. If you wanted to lower the threshold from $%00k until you have half the tax base, that richest part would see a 10% rise. 10% is also enough to make people really unhappy, and a protest by half the people in the city is tricky.