Even though Gov. Kathy Hochul is making it clear that she’s not on board with raising taxes either on the wealthy or on New York businesses, Mayor Zohran Mamdani wants the Democratic-controlled Legislature to side with him instead. 

But legislative leaders are angling to include tax hikes in their counterproposals to Hochul’s budget plan this week, according to copies obtained by NY1 on Monday.

What You Need To Know

In a new memo obtained by NY1, City Hall is pitching individual lawmakers to back billions of dollars in new taxes on millionaires and big corporations. The city is also trying to send the state a $2.3 billion bill, arguing it’s owed millions of dollars in health care and local government funding

Although the state Assembly and Senate’s one-house budget documents differ, the Democratic-led state chambers agree with Mayor Zohran Mamdani’s request to increase the city’s corporate tax: for financial sector firms, from 9% to 10.8%; and for non-finance sectors, from 8.85% to 10.62%. This would estimate the change that could generate up to $1.5 billion in new revenue

The state Assembly says they’ll give ​​$600 million to city schools to help fund changes tied to the smaller class size mandate and $15 million to fund a free bus program in each borough — a key campaign promise from the mayor

The state Senate’s proposal includes over $5 billion in new funding and taxes aimed at the city — Mamdani has said his budget gap stands at $5.4 billion.

But some lawmakers told NY1 it might not be as easy as Mamdani thinks. 

In a new memo obtained by NY1, City Hall is pitching individual lawmakers to back billions of dollars in new taxes on millionaires and big corporations.

The city is also trying to send the state a $2.3 billion bill, arguing it’s owed millions of dollars in health care and local government funding.

“I support both and I’m not from the left wing of the Democratic Party,” Queens Democratic state Assemblyman Andrew Hevesi said of the proposed tax on New Yorkers making over $1 million and an increased tax on big corporations.

“The legitimate deficit in New York City, there’s also legitimate deficits in upstate New York. Then you have 470 New Yorkers about to be kicked off health insurance,” he explained, listing his reasons for support.

Now, the legislature is set to release its one-house budget this week.

NY1 obtained a copy of both legislative chamber’s proposal, which includes support for around billions in new revenue directed toward the Big Apple — as well as funding and new taxes Mamdani says will help close his multi-billion gap.

Although the state Assembly and Senate’s documents differ, the Democratic-led state chambers agree with Mamdani’s request to increase the city’s corporate tax: for financial sector firms, from 9% to 10.8%; and for non-finance sectors, from 8.85% to 10.62%. This would estimate the change that could generate up to $1.5 billion in new revenue.

Both include a measure that would raise taxes for top earners making $5 million or more.

The state Senate agreed to grant Mamdani some of the funding City Hall requested, including $500 million for shelter reimbursements and two years’ worth of “aid to municipalities” funding totaling $604 million. City Hall previously asked for just one year.

Meanwhile, the Assembly says they’ll give ​​$600 million to city schools to help fund changes tied to the smaller class size mandate and $15 million to fund a free bus program in each borough — a key campaign promise from the mayor.

For years, lawmakers have included new taxes in their proposals.

Although “resolutions” that don’t carry the force of law and this year’s counterproposals should indicate whether Mamdani and the legislature will gang up on Hochul and her anti-tax stance.

“Our tax codes can help rectify the situation by giving a little bit more back in the pockets of working and middle-class people,” Ron Kim, a Democratic state Assemblyman from Queens, said.

While Mamdani’s property tax hike proposal in the city appears dead on arrival.

“What is the justification? Why are we doing this?” state Assemblyman Charles Fall, a Democrat representing Staten Island, parts of Brooklyn and Lower Manhattan, said.

“Why would we do this? If we’re going to do this, we just can’t wake up one morning and say, Hey, we’re going to raise taxes. You know, what’s the purpose here?” he added.

“To threaten property taxes means you’re not threatening the wealthiest, you’re threatening people who are barely surviving making it in their homes, mostly communities of color,” Hevesi said.

Hochul’s legislative allies say new taxes are unnecessary.

“I don’t see the need to raise taxes at this point. You know, we were able to survive a pandemic without raising taxes. We did it with the migrant crisis,” Fall said.

“I think it’s too premature to say, unless it’s a last resort,” added state Sen. Joseph Addabbo, a Queens Democrat.

Hochul also has the upper hand ahead of the April 1 budget deadline.

“She gets the first word and the last word in everything that we do. So if we have an executive that is adamant about not touching any tax revenues, it would be very difficult for us,” Kim said.

Moving her political chips early, Hochul promised Mamdani billions of dollars for his fledgling free child care program. She argued new taxes aren’t needed when the state has a $17 billion surplus.

But last week, when asked where the money will come from to keep the program going past two years, Hochul dodged questions from reporters.

“I said we did it with existing revenues… No, I said we did it with existing revenues… I, you got your answer!” Hochul said on March 3, during a child care press conference in West Harlem.

Meanwhile, state Sen. James Sanders, a Queens Democrat, is eyeing a new pay raise — seeking to boost legislator’s salaries from $142,000 annually to $180,000.

But sources say that idea is likely a nonstarter during an election year for both Hochul and all 213 members of the Legislature.