According to the latest reports, the top Democratic leaders of both houses of the New York State Legislature are expected to include support for Mayor Mamdani’s “taxing the wealthy” proposal in the upcoming state budget announcement, creating a clear division with Governor Hochu’s opposition to tax increases.
Politico first reported that Mamdani’s proposal to raise tax rates for residents in New York City with annual incomes exceeding $1 million will be incorporated into the “single-house budget resolutions” introduced by the Democratic majority in the State Senate and Assembly. Although this resolution does not have legal binding, it is seen as the policy stance of the Democratic lawmakers in the state legislature during budget negotiations, showing their willingness to tax high-income groups.
Mamdani has previously stated multiple times that in order to offset New York City’s staggering $54 billion budget deficit, funds must be raised by increasing taxes on the wealthy and high-income earners. He warned that if the state government does not authorize the city to raise local income taxes, the city administration may be forced to consider raising property taxes to maintain public services and fiscal stability.
At the same time, Governor Hochu has proposed a state budget totaling $263 billion for this year, which must be legislatively approved before the start of the new fiscal year in New York on April 1. Hochu is seeking a second complete term and has explicitly stated his opposition to including any broad tax measures in the final budget agreement, advocating for maintaining budget balance through economic growth and fiscal discipline.
In terms of financial coordination between the state and city administrations, earlier this month Hochu agreed to provide an additional $1.5 billion in aid to New York City to help narrow the budget gap. However, whether to further increase revenue for the city through taxation still depends on the outcome of the state budget negotiations.