New York mayoral front-runner Zohran Mamdani’s pledge to fund free childcare and bus rides by taxing the rich faces steep odds in Albany. But tax hikes may be coming for New Yorkers anyway, regardless of who leads City Hall.
Several lawmakers say higher taxes are inevitable as the Empire State braces for billions in federal cuts to health and food aid under President Donald Trump’s new budget law. That could complicate Mamdani’s plan to get state lawmakers to fund his progressive agenda.
Mamdani, who won the Democratic nomination on a platform to make the city more affordable, wants to raise $9 billion from higher levies on millionaires and corporations, a plan rattling Wall Street and business leaders.
State Senator Liz Krueger, chair of the Finance Committee, said tax increases will probably be needed eventually but that any fresh revenue would have to go first to shore up Medicaid and food stamps, not the new city programs Mamdani is calling for.
“Based on enormous cuts coming from the federal government, likely the first priority for the state would be to help reduce damaging cuts to the poorest New Yorkers statewide,” she said. “New asks for new programs for New York City will be tougher lifts.”
As of August, the state was projecting a cumulative three-year budget gap of about $34 billion. When some of the enacted federal cuts to health care and food stamps are added to the already-high projected deficits, it would swell to about $47 billion, according to state Comptroller Thomas DiNapoli.
Any new taxes would need state approval, and Governor Kathy Hochul has made clear she won’t raise them — leaving Mamdani’s plans in the hands of the governor and the New York legislature.
Assembly Member Tony Simone, a supporter of taxing the wealthy, said Hochul, a fellow Democrat, is unlikely to acquiesce to new taxes before her reelection campaign next year.
It’s “politically tough,” he said. “Morally, we’ll have to find some way of increasing revenues.”
The Assembly and state Senate have both supported increases to corporate and income taxes in recent years, though nowhere near the size of Mamdani’s proposal. Hochul invariably slammed the breaks on new broad-based duties.
‘Very sensitive’
The last major increase occurred before her term in 2021 under former Governor Andrew Cuomo, who lost the Democratic mayoral primary to Mamdani but is running as an independent to lead the city. Hochul has, however, implemented a fee on cars entering Manhattan.
“I’m very sensitive to competitiveness with other states,” Hochul, who labeled herself a “staunch capitalist,” said in a Bloomberg Television interview last month. “I’ve said I don’t want to raise income taxes on high-net-worth people. I want them to know that New York is a place where we want to foster innovation.”
Nevertheless, she wants to roll out free childcare across the state, not just in New York City, and would need to do so over time to foot the bill of about $14 billion annually.
“We’ve had conversations about specifics, but my view is, get to the election and then we’ll talk before the next session,” Hochul said in mid- September in response to questions about her support for Mamdani’s policies.
Hochul, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, all fellow Democrats, have endorsed Mamdani to succeed Mayor Eric Adams.
Mamdani wants to raise New York City’s income tax on anyone making more than $1 million a year by 2 percentage points, four times what former Mayor Bill de Blasio proposed in 2013 on earnings above $500,000 to pay for universal pre-kindergarten. (He did not get the tax increase). Mamdani also wants to raise the state corporate tax to 11.5%, the same as in New Jersey, from 7.25%.
That would put New York at a big disadvantage to neighboring Connecticut, whose base corporate tax rate is 7.5%.
E.J. McMahon, an adjunct fellow at the conservative Manhattan Institute, said it’s unlikely that Mamdani’s tax agenda, whose scale is unprecedented in modern history, will pass.
But the governor is facing a primary challenge from the left from Lieutenant Governor Antonio Delgado. And while Delgado’s primary campaign is a long shot, Hochul may not want to contend with a third-party challenge in the general election, which would divide the Democratic vote against a Republican candidate like US Representative Elise Stefanik, who is likely to run.
Hochul’s “strategy will be to attempt to placate the left and a Mayor Mamdani, if there is one, by dipping into her own reserves to spend on things they want, some of which she claims to also want,” said McMahon. “The question is can she do enough of that this year to stifle any serious political opposition in her own party.”
Leading polls
Mamdani, a democratic socialist, is ahead in the polls for the Nov. 4 election, but his lead narrowed after Adams left the race. He has 46% support compared with 33% for Cuomo, according to a Quinnipiac University poll. Republican Curtis Sliwa is polling at 15%.
Cuomo argues New York would never raise taxes statewide just to pay for benefits to New York City residents.
Mamdani said in an interview last month that while he’s confident he could push through his tax hikes, he’s “absolutely flexible” in regard to other revenue-raising possibilities to fund his marquee proposals.
He argues that the extension of Trump’s 2017 tax cuts benefited the rich and corporations, so wealthy New York City residents and companies can afford to pay more. Trump slashed corporate taxes to 21% from 35% and the highest income tax bracket to 37% from 39.6%.
State Senator John Liu said that should open the door to higher duties on the wealthy to help pay for cuts to health care. Every New York City mayor has taken office under challenging circumstances in recent years and has managed to get at least some of their pledges funded, he said.
Hochul said Tuesday at an event with Mamdani that he is “eminently rational” and understands that he needs the backing of the governor and the legislature to implement his policies.
“I already invited him to talk about his priorities and my priorities and see how they’re aligned and how we can get to yes on many of them,” Hochul said.
