(The Center Square) — New York’s Democratic lawmakers are pitching tax hikes on wealthy New Yorkers and corporations, setting up a clash with Gov. Kathy Hochul, who has rejected calls to increase rates in an election year.
Legislative leaders rolled out the so-called one-house budget plans this week, which kick off negotiations with Hochul on a new spending plan ahead of the state’s April 1 budget deadline.
Democrats in the state Senate and Assembly propose raising $5 billion more for New York City to help it reduce a budget deficit through a combination of taxes and increased state aid.
In the Assembly, Democrats want to raise $2 billion by increasing tax rates on individuals who make more than $5 million a year, $1.9 billion from corporations and $95 million from a “crypto mining facility tax.”
Meanwhile, Senate Democrats want to raise $5.2 billion by pushing through a new income tax hike on the city’s top earners and eliminating tax breaks for climate polluters, among other changes.
The proposals come in response to requests from New York City Mayor Zohran Mamdani, who has asked lawmakers for authority to increase taxes on the city’s wealthiest and corporations to help reduce a $5.4 billion budget shortfall and fund his progressive agenda.
In a statement, Mamdani praised Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins for taking “meaningful steps toward closing the deficit we inherited.”
“I’m grateful that the Assembly and Senate One-House Budgets recognize the scale of the fiscal crisis facing New York City,” the democratic socialist said.
Mamdani, who filed his preliminary $127 billion budget earlier this month, has threatened to increase property taxes across the board in New York City unless Albany lawmakers approve his wealth and business tax plans.
The Assembly also calls for increasing statewide taxes on businesses with at least $10 million in revenue, while the Senate would raise taxes by 1.75 points on firms earning over $5 million. Both chambers backed Mamdani’s request to raise New York City’s corporate tax rates. The increases, if approved, would take effect this year.
Despite the proposed tax increases, Democratic legislative leaders are also pushing several “affordability” provisions in their version of the next state budget.
The Assembly’s spending plan is proposing a two-year moratorium on natural gas and electric rate hikes and utility “rebate” checks of up to $500 for the state’s energy consumers.
Lawmakers are also proposing a tax cut to low and middle-income New Yorkers earning below $323,200. The move would cost the state an estimated $2.1 billion in the next fiscal year, with the average $445 tax break.
Hochul, a Democrat who is running for reelection, released her roughly $260 billion preliminary executive budget in January and has ruled out raising taxes to bail out New York City but has pledged billions of dollars in new state funding to help plug the Big Apple’s revenue gaps. She has called Mamdani’s calls for higher taxes a “non-starter” this year.
