Hochul wants to tax the rich … if they don’t live in NYC

If two weeks after blowing past the state budget deadline seems like an odd time to propose a brand new tax, Gov. Kathy Hochul would like to have a word. According to the governor, her pitch to enact a surcharge on high-priced second homes in New York City couldn’t have possibly come any sooner – suggesting it’s actually a good thing that the state spending plan is once again late. And since Hochul said she’s still finalizing the language of the proposal, more tardiness may be in store.

Hochul said the city’s evolving fiscal circumstances required her to wait and see if the state needed to step in to offer more help. “If this wasn't needed, it wouldn't be happening,” she told reporters at an unrelated press conference. Hochul cited a “long process of engagement” around whether Mayor Zohran Mamdani could close the city’s roughly $5.4 billion budget gap through existing mechanisms. “As I'm getting closer to shutting this down and trying to meet his needs to know the situation before May 1, it is now apparent to me on April 15 that all those savings are not going to get him where he needs to go,” she said.

The proposed tax on expensive second homes would apply to New York City residential properties with an assessed worth of $5 million and above that are not listed as the owner’s primary residence or rented out to a full-time tenant. These properties would be subject to a sliding tax scale that would impose higher rates on more expensive homes. The governor predicted the new tax would generate about $500 million annually for the city. Beyond that, details are slim. 

Until recently, Hochul said she had not even considered a pied-à-terre tax. “It's not even something we were entertaining early on because we didn't think there'd be a need,” she said. The governor couldn’t pinpoint exactly when she began weighing the new tax, but she said her office doesn’t “throw out half-baked ideas,” dismissing any perception these discussions cropped up suddenly in the past few days. “By the time we're going to get out there, we know it's going to be something that's going to be operational, or else it's irresponsible,” Hochul said, despite admitting the many still-moving parts she and the mayor need to lock down.

Hochul also denied that “tax the rich” activists, including high-profile figures like Mamdani and U.S. Sen. Bernie Sanders, had any influence on her decision to impose a new tax on the rich. “I feel no need to appease anyone,” she told reporters. “I'm looking out for the city's finances.” (That hasn’t stopped those activists from taking credit.)

And the governor reiterated her firm opposition to increasing personal income or corporate taxes on New Yorkers, which Mamdani has explicitly asked for. “This is not a tax on residents – that is so important,” Hochul said of her proposal. “We're talking about people who are ultra– wealthy. There are literally Russian oligarchs buying up properties.”

Despite Hochul’s continued opposition to the heart of Mamdani’s tax proposals, the mayor still welcomed the governor’s latest fiscal olive branch. While co-hosting a Tax Day forum at the CUNY Graduate Center on Wednesday morning, Mamdani offered praise for the governor’s proposal, describing the pitch as one of the “fruits” that have come from calls to raise taxes on the state’s wealthiest earners.

“That idea of a fairer society is at the principle of all this advocacy,” Mamdani said. “What we are talking about is a recognition of the inequality that has permeated politics through the five boroughs of our city, through our country, through the world.”

The mayor didn’t explicitly say whether he would continue his pressure campaign for the governor to adopt tax increases on the wealthy this year, nor did he explicitly say that she should raise them. But his own commitment to the movement clearly has not wavered, even if victory comes in a future year. The forum’s entire premise centered on how inequality is growing across the world – and how raising taxes on the highest earners would help combat this in New York. It wasn’t a subtle message – a banner featuring the words “tax the rich” hung behind Mamdani and his two left-wing economist co-hosts as they spoke.

State Senate Majority Leader Andrea Stewart-Cousins told reporters in Albany that her conference has historically supported progressive tax policies, including taxes on pieds-à-terre, which extends to Hochul’s proposal in theory. And a spokesperson for Assembly Speaker Carl Heastie told The New York Times that Democrats in the chamber have supported this idea as well. But leaders haven’t reached fiscal negotiations in their discussions with the governor yet. And the governor hasn’t provided them with the exact language of the pied-à-terre tax proposal – because she’s still finalizing the language herself. “Not done writing it yet,” Hochul told City & State as she walked off the podium at her Manhattan event.