New York City Mayor Zohran Mamdani attends to celebrate the Year of the Horse during the Lunar New Year Parade in New York City, U.S., March 1, 2026. REUTERS/Ryan Murphy
(New York, NY) – State lawmakers gave Mayor Mamdani a big win this weekend and now all pressure is on Governor Kathy Hochul if she will capitulate to the city’s progressive demands. Mamdani has been adamant that raising taxes on the wealthiest New Yorkers is the way to close the massive budget gap that he blames on his predecessor, former Mayor Eric Adams. While the Democratic Socialist has shown zero signs of cutting spending, lawmakers in Albany are siding with the mayor in their counterproposals to Governor Hochul’s spending plan.
The Assembly and Senate released their official “one-house” proposal, that includes a tax hike on people reporting income earnings over $5 million and allows the city to raise its own income taxes – a key change being sought by Mamdani. It would raise revenue by $4 billion for the state and $2.5 billion for the city. State Senate Leader, Andrea Stewart Cousins, a Democrat representing Yonkers, says raising revenue on a local level would protect the state from any feuds over federal grants and funding as New York has seen with the Gateway Tunnel project.
“Tax the Rich” Chants Bring Smile to Mayor’s Face
Mayor Mamdani knows this policy is fairly popular according to recent polling: raising taxes on top earners. This past week, chants broke out during an announcement launching the new city LGBTQIA+ office. The crowd in Brooklyn chanting “tax the rich” after Mamdani was once again pressed on how he plans on making good on campaign promises like free buses (which is actually already included in the state lawmakers budget plan) and expanded access to affordable childcare.
This is also not the first time a massive crowd has reinforced the mayor’s stance. Back on the campaign trail, things got a bit awkward as Mamdani hosted a GOTV rally at Forest Hills Stadium and a massive “tax the rich” chant broke out as Governor Kathy Hochul took the stage. GOP state lawmakers say that increasing taxes does not directly lower the cost of living across the Empire State.
Moody Gives Negative Outlook
As the Mayor’s office gets a win from Albany, a top financial firm is dealing out some bad news for the five boroughs. Moody’s credit firm gave the city a negative financial outlook in a new report out this week. The negative rating however, does not impact the big apple’s access to bonds or the ability to borrow.
Former Deputy Mayor Randy Mastro was on 77WABC’s Cats & Cosby where he talked about Mamdani’s budget woes
Corporations Not Off the Hook
While state lawmakers did not go full throttle raising the corporate tax rate to match New Jersey’s at 11% as Mamdani has proposed, there is still a potential increase from 7.25% to 9%. Some business owners say the price just continues to rise for the few remaining mom and pop shops across the city. While the corporate tax hike applies to companies raking in more than $5 million – similar to income taxes – those smaller businesses earning around that threshold still could be impacted.
Budget Deadline Fast Approaching
Now that Albany has launched their official response to Hochul’s financial plan, negotiations begin and there are only a few weeks to hammer out how to allocate the $260 billion budget. While the plan is due at the start of the new fiscal year on April 1st, the state has been repeatedly late. Last year, negotiations dragged into April after lawmakers passed temporary budget extenders to keep the government open. Governor Kathy Hochul is facing immense pressure as this is her last budget process before she is up for reelection in November. Hochul has been firm in her stance against raising property taxes – something that could cost her in November as she centers her campaign around “affordability” a la Mamdani.
