Governor Hochul Faces Pressure on Mamdani’s Tax-the-Rich Agenda

Albany becomes crucial battleground as progressive mayor needs state approval for funding plan

The Albany Obstacle

Mayor-elect Zohran Mamdani campaigned on an ambitious affordability agenda–free buses, universal childcare, and city-owned grocery stores–all funded by taxing the wealthy. But there’s a significant obstacle to implementing this vision: Governor Kathy Hochul, who has consistently opposed raising taxes on high-income New Yorkers.

“I’ve not had an increase in our income tax because I want to make sure high-net-worth people know we appreciate them, and I don’t want to drive them out of our state,” Hochul told Bloomberg TV last month, clearly staking out her position before Mamdani even won the election.

The Mamdani Tax Plan

Mamdani has proposed creating a 2% New York City income tax for anyone making more than $1 million annually and raising the top state corporate tax rate to 11.5% to match New Jersey’s rate. His campaign estimates these measures would generate approximately $9 billion per year–an 11% increase in city tax revenues.

According to analysis by the Empire Center for Public Policy, the proposed hike would lift the top marginal city-state tax rate to 16.8%–three-and-a-half points higher than any other state. Currently, the top 1% of city taxpayers pay 40% of the city’s income tax. If Mamdani’s proposal became law, that share would likely rise to more than 60%.

Tax Flight Concerns

Hochul’s resistance centers on fears of wealthy residents leaving New York. “I’m concerned about outmigration of people who are the ones who are supporting our budget,” she said on the “Raging Moderates” podcast. The governor noted that high-income individuals, who make up about 1.5% of New York’s population, shoulder one-third of the state budget.

These concerns are not without merit. As the Empire Center notes, a hypothetical taxpayer with $25 million in taxable income could save $1 million annually by moving to New Jersey, almost $2 million by relocating to Connecticut, and as much as $3.7 million by going to Florida or Texas. Mamdani’s proposed two-point hike would add another $500,000 to each of those amounts.

The Political Calculation

Hochul’s position creates a political dilemma. She endorsed Mamdani in September after initially being reluctant, and now faces pressure from his supporters to enable his agenda. During a rally in Queens, Hochul was heckled by Mamdani supporters who chanted “Tax the rich!” at her as she delivered her speech–chants she claimed to have heard as “Let’s go, Bills.”

“We don’t have to agree with each other on everything, and we certainly don’t,” Hochul said about Mamdani on a podcast. “But that doesn’t mean I can’t stand there and embrace the moment and the energy.” This statement captures the awkward position she occupies: politically allied with Mamdani while fundamentally opposed to his core economic policy.

Legislative Support Building

Despite Hochul’s opposition, support for Mamdani’s tax plan appears to be building in the state legislature. Assembly Speaker Carl Heastie, while endorsing Mamdani, has specifically said he’d support the tax hikes to help move Mamdani’s agenda forward. According to Gothamist, both the state Assembly and Senate have backed hiking income and corporate taxes in recent years.

State Senator James Skoufis told reporters, “So long as some of the new revenue would be applied to tax relief for working-class New Yorkers, I’m open to very modest increases on millionaires.” This suggests room for negotiation, particularly if the tax plan includes provisions that benefit middle-class New Yorkers.

The Bloomberg Precedent

Recent Bloomberg reporting indicates Hochul may be reconsidering her position. According to Bloomberg News, the governor is considering raising corporate taxes as part of broader efforts to close a potential budget shortfall and help fund some of Mamdani’s agenda, particularly universal childcare.

This would represent a significant shift from Hochul’s stated position. The governor is reportedly weighing additional levies and several other potential revenue sources, though discussions remain private and in early stages. If accurate, this signals that political pressure from Mamdani’s victory may be moving Hochul toward compromise.

The de Blasio Parallel

A similar scenario played out during Bill de Blasio’s tenure. De Blasio was elected in 2013 on a promise to tax the rich to pay for universal pre-K in New York City. He faced resistance from then-Governor Andrew Cuomo, who opposed the tax increase. Ultimately, de Blasio got his universal pre-K program, but Cuomo didn’t budge on the tax–instead tapping other state funds to help cover the plan.

This precedent suggests Hochul might find alternative revenue sources for Mamdani’s priorities, particularly universal childcare, which she has indicated is a priority for her as well. “I’ve said there’s no new income taxes,” Hochul stated. “I’m looking at ways to fund programs that are important to me like universal child care. We’re very creative in state government. We’ll find a path to accomplish the goals we need to.”

Political Threats and Primary Pressure

Some Mamdani allies have begun making veiled threats about primarying state politicians who don’t fall in line. Corbyn Trent, a former top aide to Rep. Alexandria Ocasio-Cortez, suggested that “maybe AOC should run for governor if Hochul doesn’t do what needs to be done.”

“The power that politicians understand is the ballot box,” Trent said, according to Townhall. “Getting one or two scalps sends a message about what happens when you don’t play ball.” This aggressive posture could backfire, potentially hardening Hochul’s opposition rather than encouraging compromise.

The 2026 Factor

Hochul faces her own reelection in 2026, with Republican Congresswoman Elise Stefanik already announcing she’ll seek her party’s nomination to challenge the governor. This creates complex political calculations: Hochul needs to maintain support from progressives who delivered Mamdani’s victory while not alienating moderate voters concerned about taxes and business competitiveness.

Conservative strategist Bill O’Reilly predicted that “taxes are going to be the bane of Gov. Hochul’s existence if Mamdani wins. He and his DSA cohorts are going to want to raise taxes wherever possible, and the governor is the gatekeeper for that. If she raises them, voters will be furious. If she doesn’t she could be looking at a primary from a DSA member.”

The Path to Compromise

The most likely scenario involves partial implementation of Mamdani’s agenda through a combination of modest tax increases, alternative revenue sources, and budgetary reallocation. Universal childcare appears to have the strongest chance of success, given Hochul’s stated support for the policy goal.

Free buses and city-owned grocery stores may prove harder sells, particularly if they require the full tax increases Mamdani proposed. However, if Mamdani can demonstrate early success with pilot programs and build public support, he may be able to pressure Albany into providing additional funding.

The coming months will determine whether Mamdani’s democratic socialist vision can coexist with Hochul’s business-friendly approach, or whether fundamental policy disagreements will paralyze progress on New York’s affordability crisis.