Gov. Kathy Hochul released her budget plan Wednesday, and while she received praise from many quarters for ambitious proposals to build affordable housing and fund mental health services, not everyone is pleased with her spending plan.
Progressive lobbying groups want to see more taxes on wealthy New Yorkers, saying the budget is too favorable to them at the expense of working families.
Hochul did not introduce any broad-based increases in the income tax, and she’s against further raising taxes on the state’s highest earners, who already pay more through a temporary tax surcharge. She spoke about it at her State of the State address last month.
“A majority of economists are predicting a recession,” Hochul said on Jan. 10. “And that's one of the reasons it's clear to me why we will not be raising income taxes this year.”
The governor is proposing extending a temporary tax surcharge on corporations for another three years.
Michael Kink with the progressive lobbying group Strong Economy for All said other taxes and fees that Hochul is backing would burden those who can least afford to pay more.
He said a payroll tax on businesses in New York City and surrounding areas served by the Metropolitan Transportation Authority would likely be passed through to workers. And he objected to an additional dollar-per-pack tax on cigarettes and tuition increases at public colleges and universities.
“All of those things make costs higher for regular working people while protecting the billionaire class that she’s serving,” Kink said.
Kink said he hopes that the Legislature, which is run by Democrats, will reject those increases and instead raise taxes on the wealthy through income and capital gains taxes.
“Tax increases on working people are unpopular and difficult. Tax increases on the wealthy are popular and effective,” he said. “I think the Legislature can make the right call on this even if the governor can't.”
It would not be the first time that progressive Democrats in the Legislature have influenced taxation decisions.
Erica Vladimer with the Invest in Our New York campaign said former Gov. Andrew Cuomo in 2021 initially opposed the tax surcharge on the wealthy, but the Senate and Assembly included it in the final spending plan under pressure from left-leaning lawmakers.
“And the Legislature stepped up and stood with middle, working-class and low-income New Yorkers to secure an additional, now it's over $10 billion, in additional public funds,” Vladimer said. “We know they can do that again this year. And that they recognize affordability is top of mind for all New Yorkers.”
Vladimer and Kink said so far, 50 Democratic lawmakers have said they agree with them.
The push to raise taxes on the wealthy comes at a time when rifts are developing between Hochul and progressive Democrats in the Legislature over other issues. Some Democratic senators are at odds with Hochul over her choice for the next chief judge, who several left-leaning senators believe is too conservative. They voted down the nominee, Hector LaSalle, in the Senate Judiciary Committee.
Hochul later vetoed a bill backed overwhelmingly by Democrats that would update the state’s wrongful death statute, saying it would cost insurance companies too much money. In a scathing response, the bill’s sponsors called a counterproposal by the governor “half-baked” and “woefully inadequate.” The Assembly sponsor, Helene Weinstein, is also the chair of the chamber’s Ways and Means Committee, which oversees budget decisions.
The Senate and Assembly will release their own ideas on taxes and other budget priorities in about a month.
