Gov. Kathy Hochul is reconsidering a corporate‑tax hike after facing constant pressure from the Mamdani‑aligned left, though she says President Trump’s policies made the raise unavoidable.
The governor has been repeatedly heckled by liberals, who have even shouted “tax the rich” when she tries to stay true to her pledge of no income‑tax increase. Mamdani, the newly elected NYC mayor‑elect who wants at least $9 billion more money for his agenda—including universal child care and free bus service—has been pushing her to align more closely with a democratic‑socialist vision.
While Hochul has stuck to her promise not to lift individual rates, she has acknowledged that the state may need corporate‑tax increases in order to balance the budget. “So people say that there’s conversations around taxes related to a recent election,” she explained during a press briefing unrelated to the topic. “It’s not the recent election. It was the 2024, election, when Donald Trump took office, and has now created the chaos where we don’t have a clear line of sight into what is happening next year.”
Hochul’s remarks came just a day after she told FOX 5 she has not yet moved on raising personal taxes. An increase in either individual or corporate rates would require state‑wide approval, which is still uncertain. “I’m not raising income taxes because I believe that we want to make sure that New York is more affordable for everybody and I want people who are successful to keep creating the jobs and investing here, but we have to look at other revenue sources,” she told the station when questioned about it this week.
This year’s projected state budget tops out at roughly $259 billion, according to the latest figures released last month. Yet Hochul’s budget office predicts a shortfall of about $4 billion per year starting in 2027, owing to the loss of Obamacare subsidies and the effects of President Trump’s “One Big Beautiful” legislation passed in July. To bridge a $750 million gap in the current year’s budget, the governor claims to have achieved “efficiencies,” while also bumping projected tax revenue by $2.6 billion during a recent revision.
The governor, who is campaigning for reelection next year, faces mounting criticism from Mamdani supporters and other progressives. They warn that a Democratic primary challenge could loom if she continues to appear unwilling to meet their fiscal demands.
Ana Champeny of the Citizens Budget Commission, an independent watchdog group, highlighted in a recent report that eroding federal support poses a major threat to New York beyond the state’s own economic challenges. “Housing and affordability, climate change, and high taxes and outmigration all weigh heavily too,” she noted. “All are pieces of a greater question of how New York State uses its dollars to effectively help New Yorkers.”
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