Governor resists mayor’s millionaire tax proposal
State-City Negotiations Stalled Over Revenue
Governor Kathy Hochul and Mayor Zohran Mamdani find themselves at a fundamental disagreement regarding how to resolve New York City’s budget crisis. While Hochul announced an additional $1.5 billion in state funding for the city, she has declined to authorize the tax increases on high-income residents and profitable corporations that Mamdani identified as his preferred solution.
The governor stated during a public appearance that she was not supportive of property tax increases and did not believe they were necessary. Her position puts her in direct conflict with the mayor, who has publicly framed property tax increases as the inevitable consequence of the state’s failure to approve his revenue proposals.
State Funding Announcement
Hochul announced state would provide an additional $1.5 billion to the city over two years to address fiscal pressures. This funding includes about $300 million for youth programming and addresses costs that have shifted from state to city government under prior administrations. The funding also includes $510 million targeting specific cost categories.
However, despite this significant additional state support, the governor maintained her opposition to the revenue measures Mamdani championed during his mayoral campaign. She characterized the budget year as providing months for negotiation and expressed confidence that solutions could be found without resorting to either property tax increases or new state tax authority.
Competing Visions of Fiscal Policy
The disagreement between Hochul and Mamdani reflects different philosophical approaches to state and city finance. The mayor emphasized fairness and sustainability, arguing that permanent revenue sources for recurring expenses are preferable to temporary reserve draws. The governor emphasized fiscal restraint and concerns about tax competitiveness, suggesting that New York’s ability to retain wealthy residents and corporations depends on maintaining lower tax burdens.
Hochul has previously expressed concerns about high earners and corporations relocating to lower-tax jurisdictions. She has been skeptical of tax increases that might accelerate such migration. Mamdani’s position emphasizes that wealthy New Yorkers benefit from world-class public services that require robust public funding.
Political Calculations and Pressure
Mamdani’s public presentation of dire budget consequences appears designed to generate political pressure on Hochul and state lawmakers. By highlighting the specific consequences of inaction, the mayor has created a situation where legislators must either approve his revenue proposals or accept responsibility for property tax increases that could harm their constituent municipalities.
Hochul’s refusal to endorse the mayor’s approach suggests she believes her political interests are better served by resisting new taxes on wealthy residents and corporations despite potential consequences for the city budget. The governor must balance pressures from different constituencies and different parts of the state.
Broader Implications
This disagreement between the governor and mayor represents a fundamental question about the relationship between state and city government and how fiscal responsibilities should be allocated. The outcome will affect not only New York City’s budget but also the state’s overall fiscal health and economic competitiveness.
The disagreement also highlights the precarious fiscal position that New York City operates in, heavily dependent on state-authorized revenue sources and state funding decisions. Learn more from Governor’s Office, Mayor’s Office, and Empire Center analysis.
