For months, Gov. Kathy Hochul has remained steadfast in her refusal to raise taxes in New York, despite a public campaign for her to do so, led by Mayor Zohran Mamdani of New York City.
The pressure on her to change her mind will grow on Monday when the State Senate and Assembly are expected to call for tax increases in their initial budget proposals. Though their proposed increases are smaller than Mr. Mamdani’s asks during his mayoral campaign, both chambers are calling to raise a variety of taxes, including the personal income tax and the state’s top corporate tax rate.
Their proposals differ in specifics from Mr. Mamdani’s, but the goal is the same: to provide New York City with roughly $5 billion more through a mix of taxes and other state aid.
The lawmakers’ proposals, known as “one-house budgets,” are opening salvos in a negotiation that will take place over the next month among Ms. Hochul; Andrea Stewart-Cousins, the Senate majority leader; and Carl Heastie, the Assembly speaker. Ms. Hochul released her roughly $260 billion preliminary executive budget in January.
The state’s budget is due by April 1, though talks have regularly stretched well past that statutory deadline, especially since Ms. Hochul took office.
“I have to get the city to a solid financial position,” Mr. Heastie said. “I know the governor has her stances, but it’s very important that we finish this budget process with trying to get these cities as close to whole as we can.”
Ms. Stewart-Cousins and Mr. Heastie represent restive bodies eager to build on the momentum of Mr. Mamdani, who previously served in the Assembly and won the mayoralty last year on a platform that included calling for billions of dollars more in taxes on wealthy residents and businesses.
He has proposed a two percentage point tax increase on residents making more than $1 million a year, which would effectively raise their taxes by 51 percent and pull in about $4 billion annually.
And he called for corporate tax rates to rise to 11.5 percent from 7.5 percent, which would generate an extra $5 billion a year and bring the state in line with New Jersey, which has the highest corporate tax rate in the nation.
Mr. Mamdani said in a statement that he was happy to see the Legislature “recognize the scale of the fiscal crisis facing New York City.”
The budget proposals “take meaningful steps toward closing the deficit we inherited, including by asking more from the wealthiest New Yorkers and by creating a fairer balance in the city’s fiscal relationship with the state,” he said.
State lawmakers are proposing to bring $2 billion into state coffers by raising the tax rate for businesses with incomes of over $5 million, to 9 percent from 7.25 percent. Legislators also want to tack on a 0.5 percent income tax surcharge on residents making more than $5 million, rather than Mr. Mamdani’s threshold of $1 million.
Assembly and Senate leaders have backed proposals to raise taxes in recent years with little to show for it. They say they hope this year will be different, given the needs of the city and the grass-roots momentum led by Mr. Mamdani.
A recent Siena University poll found that 54 percent of voters statewide — and 62 percent of voters in New York City — supported Mr. Mamdani’s push to raise taxes. And a “Tax the Rich” rally organized by Mr. Mamdani’s allies last month drew 1,500 people to Albany (though the mayor did not attend).
Still, legislators face an uphill battle to persuade Ms. Hochul to walk back her promise not to raise income taxes on New Yorkers in a year where she faces a contested re-election fight.
But with New York City facing a projected $5.4 billion deficit over two years, Ms. Stewart-Cousins said federal cuts by the Trump administration made increasing revenue that much more important.
“We are asking the city to do what it can to tighten its belt and find savings,” she said. “There is also more momentum to ask people in different ways, if they have a little more, to contribute a little more.”
State lawmakers also are proposing to raise New York City’s corporate tax rate and its unincorporated business tax rate. Smaller tweaks will also be on the table, including a new tax on the transfer of apartments and homes worth more than $5 million. The Senate is also proposing the end of a tax break for sales of more than $1,000 in gold bullion.
Despite their differences on increasing taxes, Ms. Hochul and Mr. Mamdani have forged a warm working relationship and have gone to great lengths to emphasize their alignment on other issues, such as expanding child care.
Ms. Hochul was one of the most prominent Democrats to endorse Mr. Mamdani for mayor last year, and he reciprocated in February. His support of the governor stripped any possible momentum from a primary challenge by Lt. Gov. Antonio Delgado, who dropped out of the race days after the mayor’s endorsement became public.
Benjamin Oreskes is a reporter covering New York State politics and government for The Times.
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