Gov. Kathy Hochul stood before a stadium packed with Zohran Mamdani fans last fall, eager to share the momentum the candidate had generated. But 10,000 of his supporters were drowning out her speech, chanting “tax the rich” in unison.
The jeering was so loud that Mr. Mamdani decided to make an early appearance onstage, taking Ms. Hochul’s hand and raising it high, turning the chants into applause.
Taxing New Yorkers who earn more than $1 million a year to pay for a universal child care system was a central promise of Mr. Mamdani’s successful campaign for mayor — an idea that the politically moderate governor, who faces her own election fight this year, did not embrace.
Three months later, Ms. Hochul has endorsed a child care expansion but is holding the line on taxes — and Mr. Mamdani doesn’t seem to mind. He has made a point of applauding her pledge to allocate nearly $1 billion more this year from existing revenue and another $425 million the following year to begin expanding child care across the city.
It is the clearest sign yet that a mayor elected as a political outsider is willing to govern more pragmatically than some of his critics expected — and perhaps more than some of his supporters and allies would like.
Raising taxes on the rich is a core uniting principle of the Mamdani coalition, which includes the Democratic Socialists of America; Representative Alexandria Ocasio-Cortez of New York and Senator Bernie Sanders of Vermont, his political role models; and many mainstream Democratic voters fed up with the nation’s affordability crisis.
But in private conversations, aides to Mr. Mamdani, who is himself a democratic socialist, made clear to Ms. Hochul’s advisers in December that he would happily accept money she was willing to offer in lieu of raising taxes in her re-election year.
“I think you pick your spots, and a win’s a win,” said Rebecca Katz, whose firm, Fight Agency, made campaign ads for Mr. Mamdani.
A person close to Mr. Mamdani, granted anonymity to discuss the mayor’s thinking, described him as intensely focused on policy victories rather than ideological fights, a side of him that was not always on display during his come-from-behind campaign last year.
Citing the bleak picture of the city’s finances described last week by the city comptroller, Mark Levine, the person said the mayor is considering pushing Ms. Hochul to raise taxes during the upcoming budget negotiations in Albany.
But for now, he seems content to take the money the governor is offering to kick-start funding for his most expensive and ambitious promise, without arguing over how to pay for it.
The duo’s temporary détente on taxes was on display earlier this month, as they stood together at a Y.M.C.A. in Brooklyn, the co-stars of a celebratory news conference in which Ms. Hochul announced that the state would fund the first two years of a child care expansion that would put the city on the path to a universal system.
(Even without a new tax, New York’s wealthiest residents will play an indirect role: Large Wall Street bonuses and a surging stock market mean the state is likely to have enough revenue from existing taxes to keep Ms. Hochul’s promise.)
But the agreement — reached as the governor and mayor prepare to release their budget proposals — comes with a big unanswered question: How will the city and state pay for a hugely expensive new entitlement after the first two years of funding run out?
Though punting on that debate for now serves both politicians’ immediate political needs, it could set them on a collision course in the not-too-distant future, as Mr. Mamdani faces daunting logistical and operational challenges in setting up universal child care, a major new entitlement, over the next several years.
Speaking to reporters after the governor’s State of the State address last week, Mr. Mamdani said that hiking taxes will be a “critical part” of funding the city’s basic operations and his ambitious policy agenda.
He repeated that argument during a television interview on Sunday, saying, “We have to tax the wealthiest New Yorkers, the most profitable corporations.”
Ms. Hochul has a different view. “I don’t support raising taxes just for the sake of raising taxes,” she said last week.
In 2014, former Mayor Bill de Blasio was eager to pay for expanding prekindergarten, his signature initiative, by taxing wealthy New Yorkers. After a protracted debate, then-Gov. Andrew M. Cuomo quashed the idea, and funded pre-K without raising taxes.
The dispute kick-started a yearslong rivalry, an acrid dynamic both Mr. Mamdani and Ms. Hochul want to avoid.
“It’s the program that matters,” said Christine Quinn, a former City Council speaker who ran for mayor against Mr. de Blasio in 2013 and later worked for Mr. Cuomo. “New Yorkers don’t care how it’s funded.”
Even after Ms. Hochul endorsed Mr. Mamdani as he rose in the polls last year, the governor insisted that she would not raise income taxes this year.
Ms. Hochul, who last year extended a tax on residents making more than $1.1 million, is expected to call for an extension of a corporate tax hike implemented in 2021. And she has signaled in recent months some openness to raising taxes on businesses, especially if federal budget cuts complicate the state’s finances.
But the governor’s general distaste for raising taxes also reflects a political concern.
After being criticized for dragging down Democrats running in battleground congressional districts four years ago, Ms. Hochul helped allies pick up House seats on Long Island and upstate in 2024. She is eager not to jeopardize Democratic seats in places where tax increases may be unpopular. She is also worried about higher taxes driving companies out of New York.
But eventually, both Ms. Hochul and Mr. Mamdani will almost certainly face pressure from progressives who are eager to see wealthy New Yorkers pay more.
“If you are not comfortable with making your friends unhappy, this ain’t the job for you,” said Zellnor Myrie, a state senator from Brooklyn who ran for mayor himself and who is not a member of the D.S.A. He noted that both legislative chambers have spent years pushing the governor to implement tax increases.
Some of the mayor’s fellow democratic socialists appear to be giving him space to maneuver, at least for the moment.
State Senator Kristen Gonzalez, a member of the local chapter of the D.S.A., said the group’s support for Mr. Mamdani is not “dependent on specific bills or what is in or out of the executive budget.”
Mr. Mamdani is now on the hook to ensure that the actual rollout of new child care is successful enough that voters want more of it — and demand more funding from the state, Ms. Gonzalez said.
“These two years gives us an actual concrete data set to say, ‘This is what families need to make the city more affordable,’” Ms. Gonzalez said, adding that this was the beginning of “a longer fight.”
The local chapter of the D.S.A. and Our Time for an Affordable NYC, an advocacy group raising money to support Mr. Mamdani’s agenda, released a statement on Friday calling for higher taxes but focused their ire on the governor, not the mayor.
“If Governor Hochul continues to refuse to tax the richest individuals and corporations, who are about to enjoy a $12 billion federal tax cut, she will be handing the wheel to the Trump administration as it destroys our social safety nets,” they wrote.
Nathan Gusdorf, executive director of the Fiscal Policy Institute, a center-left think tank, said new taxes will eventually be necessary for child care to become a permanent sweeping entitlement. But he favors modest tax increases for most New Yorkers, not just the wealthiest residents.
“We couldn’t have public schools if only millionaires paid taxes, and the same logic should be extended to child care,” he said.
Other observers of the state’s budget process praised Ms. Hochul for keeping her promise not to raise taxes this year.
“If the state’s leaders truly care about affordability, they should be cutting taxes, not raising them,” Bill Hammond, a senior fellow at the Empire Center for Public Policy, a fiscally conservative think tank, said in a statement.
Eliza Shapiro reports on New York City for The Times.
The post As Mamdani Focuses on Child Care, Plan to Tax the Rich Is Put Aside appeared first on New York Times.
