Gov Hochul (left ) and Mayor Zohran Mamdani (Proper) visited a number of pre-schoolers at a YMCA in Flatbush, Brooklyn on Thursday, January 8.
Photograph by Lloyd Mitchell
Gov. Kathy Hochul rolled out her $260 billion govt funds on Tuesday, which she says addresses the state’s wants with out taxing the wealthy — one thing that Mayor Zohran Mamdani continues to insist is important to make New York Metropolis inexpensive for everybody.
The governor’s funds proposal, step one in hammering out a brand new spending take care of the state Legislature by April 1, consists of plans to offer free childcare to kids aged two and over in New York Metropolis and kids aged 4 and up all through the remainder of New York State, pledging $4.5 billion to broaden free childcare statewide. That funding represents a $1.7 billion enhance in comparison with the 2025 state funds.
Hochul, nonetheless, stated the state can afford the growth with out elevating earnings taxes.
“Over the last four years, we’ve proven something important: that you can make historic investments without raising income taxes, without mortgaging the next generation, without losing sight of what people can afford,” Hochul stated in a press convention Tuesday afternoon.
However Mamdani — whereas praising Hochul for making “meaningful investments” to deal with the affordability disaster within the govt funds — additionally stated Tuesday {that a} tax enhance on New York’s wealthiest stays a necessity. He pointed to experiences from each Metropolis and State Comptrollers Mark Levine and Tom DiNapoli, respectively, which discovered that town’s funds are presently “unsustainable” — with a projected $12.6 billion funds shortfall accrued throughout the Adams Administration, in line with Levine.
Mamdani stated the state is on “solid financial footing” because of Hochul’s “fiscal stewardship” however added that town doesn’t take pleasure in the identical monetary safety, pointing to Levine’s latest report. Together with blasting former Mayor Eric Adams for years of “short-term gimmicks with long-term consequences,” Mamdani vowed to revive long-term sustainability to town’s funds.
Mayor Zohran Mamdani addresses New York Metropolis in his inauguration tackle.Photograph by Dean Moses
On the identical time, nonetheless, Mamdani pledged to not implement “austerity politics” to shut town’s funds gap. The one means to do this, the mayor insists, is to lift taxes on town’s largest moneymakers.
“It is time to ask New York City’s wealthiest and large corporations to pay their fair share,” Mamdani stated.
Hochul’s proposed funds consists of no plans to extend any earnings taxes however does embrace a three-year extension of the 7.25% company tax charges on firms incomes greater than $5 million, a measure initially launched by former Gov. Andrew Cuomo.
Mamdani stated his administration is starting a evaluation of the governor’s funds proposal, including that he can have “more to say” when he has totally reviewed the funds.
“Our guiding principle, however, is clear: fiscal responsibility must go hand in hand with protecting working families, preserving our social safety net and building a city that works for the many—not just the few.”
Hochul and Mamdani break on ‘tax the rich’
Nonetheless, Hochul’s refusal to embrace Mamdani’s “tax-the-rich” dream marks a big break between the pair. The mayor has persistently referred to as for a 2% tax hike on all residents incomes greater than $1 million per yr with the intention to fund his affordability agenda, which incorporates plans free of charge buses, common childcare and a hire freeze.
When Hochul spoke at a Mamdani marketing campaign occasion at Forest Hills Stadium final October, her speech was drowned out by a refrain of “tax the rich” chants from the ten,000-strong crowd, which prompted a response from the Governor.
“I can hear you,” she instructed the group on the time.
Mamdani could also be banking on assist from state legislative leaders within the funds negotiating course of. Meeting Speaker Carl Heastie, in endorsing Mamdani’s election final fall, indicated he was “wholly supportive” of accelerating taxes on the wealthiest New Yorkers and indicated on the time that he was “not concerned” Hochul would stand in the best way.
State Senate Majority Chief Andrea Stewart-Cousins — who additionally supported Mamdani final fall — has additionally expressed assist for the tax enhance.
Governing within the period of Trump
In the meantime, non-profit watchdog Residents Funds Fee (CBC) praised Hochul for not elevating earnings taxes within the state however criticized the Governor for extending a enterprise tax surcharge, which taxes companies in New York Metropolis at 17.44%.
“We commend Governor Hochul’s focus on affordability,” CBC President Andrew Rein stated in a press release. “It should not come at the expense of the fiscal stability that undergirds service continuity. Instead of layering on new unaffordable spending, the State should target programs to those in need and fund them by scaling back less impactful spending, including wasteful economic development programs and school aid to shrinking and wealthy districts.”
The $260 funds proposal would symbolize a modest 0.7% enhance on the 2025 funds, and features a vital enhance within the state’s contribution to the funds in a bid to offset federal cuts. Hochul stated federal funding is down $10.3 billion in comparison with final yr, a lower of 11.4%. A major chunk of that lower is a results of the expiration of pandemic aid, which Hochul stated the state was ready for.
Nevertheless, at the very least $3 billion of the federal cuts comes on account of the Trump Administration’s “direct attacks” on states, Hochul stated.
“When states stepped up to deliver federal programs, the federal government was a reliable partner, making sure the funds were there,” Hochul stated at a press convention Tuesday. “In just one year, the Trump administration has shattered that trust, and we’re bearing the brunt of it time and time again.”
She stated the state can cowl the loss in federal funding by way of the state’s reserves, which have elevated to $14.6 billion. She stated the reserves are the “gold standard of responsible budgeting,” stating that they’re sturdy sufficient to guard New York in a downturn.
