Democratic state lawmakers are formally backing a version of Mayor Zohran Mamdani\u2019s proposal to tax the rich, setting up a budget showdown in Albany with Gov. Kathy Hochul.<\/p>\n
Leaders of the state Assembly and Senate inserted much of the Democratic mayor\u2019s agenda Tuesday into their official \u201cone-house\u201d counterproposals to Hochul\u2019s state budget plan. That includes a tax hike on people reporting more than $5 million of income as well as an increase in the state\u2019s corporate tax rates from 7.25% to 9%.<\/p>\n
The two houses, both controlled by Democrats, also included various changes to New York City\u2019s tax code sought by Mamdani, including versions of his proposals to boost New York City\u2019s corporate, business and \u201cmansion\u201d taxes. The new revenue would help the city erase an estimated $5.4 billion budget deficit.<\/p>\n
But lawmakers will have to convince Hochul to go along with the revenue raisers if they have any chance of taking effect. The governor, a moderate Democrat, has steadfastly opposed income-tax increases since taking office in 2021 and has centered her re-election campaign on a message of affordability.<\/p>\n
State Senate Majority Leader Andrea Stewart-Cousins, a Democrat from Yonkers, said it\u2019s important the state has \u201csustained revenue\u201d at a time when funding from the federal government is unpredictable.<\/p>\n
\u201cWe will earnestly and honestly push to make sure that some of these things are included [in a final budget],\u201d Stewart-Cousins told reporters. \u201cIt’s just important. I think the momentum is certainly on our side for this.\u201d<\/p>\n
Taken together, the Legislature\u2019s proposals would raise at least $4 billion in revenue for the state and $2.5 billion for the city, money that Democratic lawmakers want to put toward helping New York City and other cities grapple with budget deficits while boosting aid for immigrant legal defense and programs to offset high utility costs, among other initiatives.<\/p>\n
The Assembly, for example, proposed sending rebate checks of $300 or $500 to millions of utility ratepayers hit with high electric and gas costs in recent months, which would cost $2.6 billion. The city would also gain the power to raise its own income taxes in the Assembly plan, a key provision sought by Mamdani.<\/a><\/p>\n Both houses, meanwhile, included one of Mamdani\u2019s biggest priorities: establishing a pilot program for fare-free buses in New York City, which the mayor specifically asked legislative leaders to include in their budget plans amid opposition from Hochul.<\/p>\n \u201cThe mayor never said to me, \u2018You\u2019ve got to give me this list of things,\u2019\u201d said Assembly Speaker Carl Heastie, a Bronx Democrat. \u201cI think for him, he was hoping that the [budget proposal] was supportive of \u2026 helping the city with its huge deficit, which we did.\u201d<\/p>\n The budget documents written by the state Senate and Assembly are designed to give Mamdani enough money to cover the city\u2019s $5.4 billion projected deficit and expand education and child care initiatives while avoiding a property-tax increase.<\/p>\n Heastie said he\u2019s encouraging the city to come up with additional savings on its end, too. And he\u2019d be open to other taxes and revenues, so long as they ensure cities across the state get additional aid.<\/p>\n \u201c\u200aI’m committed to making sure that the city and all of the cities around the state are on solid financial ground,\u201d he said. \u201cSo that’s what my commitment is. \u200aI’m not committed to any one tax.\u201d<\/p>\n Mamdani, a former state assemblymember, said he was grateful to his former colleagues for including the tax hikes.<\/p>\n \u201cNew York City is the economic engine of our state \u2014 restoring our city’s fiscal health is an investment in the state\u2019s economic well-being,\u201d he said. \u201cI am encouraged and heartened by the relationship that we have built with Governor Hochul and the state Legislature and I look forward to continuing to review their proposals and build upon the work we have done together throughout this budget process.\u201d<\/p>\n The Senate and Assembly are expected to pass resolutions this week on their budget counterproposals, which will kick off formal negotiations with Hochul. The governor\u2019s spokesperson on Tuesday said she looks forward to the talks. Last week, Hochul blew off the legislative tax proposals as a normal part of the budget process.<\/p>\n