Gov. Kathy Hochul thrust state budget talks in a new direction this week, as she and New York City Mayor Zohran Mamdani on Wednesday unveiled a proposed tax on luxury second homes in New York City.<\/p>\n
While the revenue generated will originate in New York City and be used to help the city address its budget shortfall, Spectrum News 1 spoke with two non-New York City members who say the surcharge, known as a pied-\u00e0-terre tax, is good for upstate, too.<\/p>\n
Hochul herself said as much in her remarks on the subject on Wednesday.<\/p>\n
\u201cThe economic and financial health of New York City has an outsized influence on the rest of the state and indeed the nation,\u201d she said of finding a way to bail out the city as part of the state\u2019s massive annual budget, currently stuck in a slow-moving negotiating process between Hochul, state Assembly Speaker Carl Heastie and state Senate Majority Leader Andrea Stewart-Cousins.<\/p>\n
The tax would apply to one- to three-family homes, condominiums and co-ops worth $5 million or more and owned by homeowners with a primary residence outside the five boroughs, City Hall said in a press release. Hochul has been under tremendous pressure from Mayor Zohran Mamdani, in particular, to raise taxes on the state\u2019s highest earners to help New York City close its budget gap and fund other initiatives statewide. The governor’s office says the tax could generate at least $500 million annually as Mamdani works to fill a multibillion-dollar budget hole and fund his agenda.<\/p>\n
Hochul stressed that the initiative would tap into new revenue without venturing into other tax increases, which she has steadfastly resisted, and would encourage those who rely on New York City for a part-time residence or an investment property to contribute to the city\u2019s upkeep and well-being beyond existing property taxes.<\/p>\n
\u201cThey\u2019re all welcome to stay, but I think there\u2019s a logic behind them also contributing to the city. They\u2019re here because it\u2019s a great city and it has so much to offer, but those come at a cost,\u201d she said.<\/p>\n
The city-focused approach has some upstate members breathing a sigh of relief.<\/p>\n
\u201cI am very much afraid of outmigration in the state of New York,\u201d said Assemblyman John McDonald of Cohoes. \u201cThese are not taxpaying residents of New York state, so we are not losing their tax revenue,\u201d he added. \u201cIf an oligarch gets upset and says, \u2018I can\u2019t afford this anymore,\u2019 who knows \u2014 maybe somebody will buy it and become a taxpayer in New York state.\u201d<\/p>\n
McDonald said he imagines some of those he represents will be happy, too.<\/p>\n
\u201cWhat I hear from constituents here is that \u2018I don\u2019t want to be involved in supporting any of New York City\u2019s initiatives.\u2019 OK, this doesn\u2019t impact the people outside of New York City,\u201d he said.<\/p>\n
State Sen. Pat Fahy had a different take. She agreed that the tax is a good thing but told Spectrum News 1 that she feels it should potentially be expanded to the rest of the state to address non-city issues \u2014 and the crises facing cities like Albany and Buffalo, whose financial woes and shortfalls have been thrust into the spotlight this year.<\/p>\n
\u201cI\u2019ve asked for the numbers on how many may apply upstate. I\u2019m sure it\u2019s very few. But when you see what\u2019s happened in Saratoga and Lake Placid, we know we have some very expensive properties, given the explosive growth of these second homes, which are very high-end and highly underused. I would like to see those numbers. We don\u2019t have a number for upstate or Long Island. I think we should be looking at it all,\u201d she said.<\/p>\n
Fahy said finding new ways to get New York City out of a fiscal hole will also benefit the rest of the state.<\/p>\n
\u201cOften these are owned by people who are coming from overseas or out of state. These are not homes that people are using every day,\u201d she said. \u201cThe more we help New York in its current financial difficulties, the more we take the pressure off the rest of the state budget \u2014 it\u2019s a win-win.\u201d<\/p>\n
Senate Majority Leader Andrea Stewart-Cousins told reporters that while the Senate has supported the pied-\u00e0-terre tax in the past, there is still time to discuss the Senate and Assembly\u2019s other proposals for tax hikes on the wealthy and the benefits of the additional revenue that they would generate.<\/p>\n
In the Senate and Assembly\u2019s one-house budgets, some of that larger pot of revenue would go to additional municipal aid upstate on top of what Hochul has proposed, which \u2014 through budget amendments and early-stage conversations \u2014 is already more than she put forward in her executive budget.<\/p>\n
Stewart-Cousins said even if this is the only additional tax revenue Hochul agrees to, she is confident upstate needs will receive attention once policy discussions are settled and New York City\u2019s needs are addressed.<\/p>\n
\u201cI believe we all understand that there are many cities that also need help, and I believe we will find a way to be helpful in those areas as well,\u201d she said.<\/p>\n
As for Fahy\u2019s pitch to explore whether to expand the tax upstate to help ease fiscal strain in cities outside New York City, Stewart-Cousins said it could be considered but would depend on whether it made sense area by area. McDonald said if such a tax were deemed viable upstate, it may be best left to municipalities to opt in or out.<\/p>\n
Republicans in the state Senate minority, with several members hailing from upstate areas, joined Hochul\u2019s Republican opponent Bruce Blakeman in accusing Hochul of a flip-flop on tax hikes, even if she is seeking to avoid raising income taxes.<\/p>\n
\u201cIt seems like Kathy Hochul is taking budget direction from the DSA-funded billboards outside the Capitol,\u201d said New York State Senate Republican Conference spokeswoman Katy Delgado. \u201cShe\u2019s breaking her commitment not to raise taxes and surrendering the third chair in budget negotiations to Zohran Mamdani and the New York City socialists so they can push for tax hikes statewide.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Gov. Kathy Hochul thrust state budget talks in a new direction this week, as she and New York…\n","protected":false},"author":2,"featured_media":75269,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[109,116,295,9,11,10,49,51,50,12,112,87,200],"class_list":{"0":"post-198820","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-york","8":"tag-app-local-state-politics","9":"tag-app-ny-state-of-politics","10":"tag-jack-arpey","11":"tag-new-york","12":"tag-new-york-headlines","13":"tag-new-york-news","14":"tag-new-york-state","15":"tag-new-york-state-headlines","16":"tag-new-york-state-news","17":"tag-news","18":"tag-ny-state-of-politics","19":"tag-politics","20":"tag-vod"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/198820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=198820"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/198820\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/75269"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=198820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=198820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=198820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}