Hochul Edges Toward Tax Hikes After Mamdani Win

ALBANY, New York — Gov. Kathy Hochul spent months saying she wouldn't raise taxes. Then Zohran Mamdani won the New York City mayor's race — transforming the political universe overnight.

Mamdani’s victory didn't just install a democratic socialist in City Hall. It immediately shifted the political terrain around the more moderate governor, flooding Albany with tax-the-rich demands as Hochul reconsiders a position she had treated as nonnegotiable all year.

In the days since the election, Hochul has begun leaving the door open to raising corporate tax rates — a subtle but significant shift for a leader whose career has been defined by adapting to fast-moving political realities. It's an instinct that has helped her navigate everything from guns to immigration to the state's bail law. Now she's confronting a version of that test with far more on the line.

Hochul is running for reelection next year, and her decisions in Albany will shape not only her own future but the fate of congressional battleground districts that could determine control of the House. Any move toward higher taxes — especially for large corporations — risks unsettling business allies. Holding a firm line against levy hikes stands to provoke a newly empowered left that believes it delivered a mandate.

That shift has already drawn a swift response from Hochul's rivals.

"New Yorkers deserve leadership guided by conviction and courage — not by whatever is politically easiest at the moment," said Lt. Gov. Antonio Delgado, who's mounting a longshot primary challenge to Hochul.

The political tension is landing at a moment when voters are unusually sensitive to costs. New Yorkers across the state are still grappling with higher prices for groceries, rent and child care — the same pocketbook pressure that helped fuel Mamdani’s rise and that could reshuffle key suburban battlegrounds next fall.

And while Hochul has shown a talent for recalibrating to fast-moving political realities throughout her career, the stakes now are far larger than a single budget cycle. Her posture on taxes will help determine her standing within her own party — and the environment for every down-ballot Democrat heading into 2026.

The governor’s advisers contend she has been able to effectively evolve without sacrificing core principles.

“Gov. Hochul bases every decision on what’s best for New Yorkers,” Hochul spokesperson Jen Goodman said. “She listens to families, responds to their concerns, and delivers pragmatic, results-driven solutions that make our state safer and more affordable.”

Raising taxes on wealthy people and big companies is politically popular, a statewide Siena University poll last month found. Mamdani’s election, fueled by populist angst over the cost of living in a highly expensive city, is forcing Hochul to again confront a rapidly fluctuating environment — testing her ability to smoothly evolve her positions in order to fit the political reality.

A maladroit policy reversal creates the prospect of appearing untrustworthy to voters — a cardinal sin in an era in which authenticity is rewarded. And Hochul is holding fast against raising personal income taxes.

“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,” she said in an interview with Fox 5 on Wednesday.

Everything else seems to be on the table, though.

“We have to look at other revenue sources to fund,” she added. “Again, we're dealing with a lot of hits from Washington.”

Hochul has ample political capital to spend. The governor has double-digit polling leads over Delgado and her potential Republican opponent, Rep. Elise Stefanik, a voter survey last month found.

Allies also roll their eyes at Delgado, the governor’s estranged lieutenant governor now running against her for the Democratic nomination. He once represented a swing House seat, opposed abolishing the Immigration and Customs Enforcement agency and raised objections to the “Green New Deal.” He is now trying to seize on the excitement around the left-leaning Mamdani’s election.

“The issue isn’t whether someone is moderate or progressive, it’s whether voters see authenticity,” Democratic strategist Trip Yang said. “He’s not Zohran Mamdani. He has a pretty centrist voting record while in congress.”

Hochul, who endorsed the incoming mayor in September after a series of summertime discussions, had insisted through much of the year she opposed raising taxes in the state budget. The incoming mayor’s campaign, though, captured the restive mood of voters struggling with the expense of groceries, child care and rent. The governor disagrees with Mamdani on crucial areas like policing and Israel, but has made common cause with him on issues like child care.

Hochul’s advisers contend she has embraced policy shifts by taking a fact-based approach. Her gun control change — she once held an A rating from the National Rifle Association while representing a deep red House seat — came after a series of mass shootings in schools and other public spaces. She pressed successfully to overhaul the state’s controversial bail law after crime spiked. And she halved New York City’s congestion pricing toll after reviving the program — a move meant to reflect the concerns of cost-conscious motorists — after initially delaying the program ahead of a crucial election. Running for lieutenant governor, she dropped her opposition to allowing undocumented immigrants to obtain driver’s licenses in order to match Andrew Cuomo’s stance.

“In this day and age, particularly with the aggressive social media and grassroots organizing armies, the official mascot of a successful politician has become the chameleon. Hochul has worn that well,” said Democratic strategist Austin Shafran. “While being able to shift positions she’s also kept her authentic, western New York charm.”

Defusing the looming tax fight will be a challenge for the governor, who will present her fifth state budget proposal next month, only six months before Democratic voters pick their gubernatorial nominee. A final spending plan is due by April.

There have been awkward moments as she attempts to thread the needle and minimize political fallout.

Hochul’s appearance at a pre-election Mamdani rally was drowned out by tax-the-rich chants. Left-leaning activists, including the Working Families Party, have threatened to back Delgado — who supports higher taxes on rich New Yorkers — in the primary. Top legislative Democrats in Albany have also reiterated what has become perennial support for income tax hikes on the wealthy.

Talks among state officials are quietly underway over a corporate tax rate increase. The move is supported by Mamdani, who proposed matching the state rate with New Jersey. Yet doing so would actually boost taxes for large Big Apple companies even higher than in the Garden State, given the city-specific taxes they pay.

“We’re certainly open to her shifting toward taxing the rich,” said Assemblymember Jessica González-Rojas, a Queens Democrat who was elected with support from the Democratic Socialists of America. “I think she sees the writing on the wall in the way people turned out in droves in supporting Mamdani. She heard the calls for taxing the rich. The public wants to see an investment in the way that makes New York state and city more affordable.”

The incoming mayor and governor have emphasized a mutual support for universal child care — an expensive measure that Hochul’s budget office estimates would likely cost more than $10 billion once fully phased in. The program, though, is politically popular and would provide a tangible example of Democrats addressing the Empire State’s high cost of living. Taking a major step on the issue next year would give the new mayor a win and potentially keep his ardent political base from turning against the governor.

Hochul’s tax posture may be dependent on forces outside of her control, though.

New York state’s cash picture is driven in large part by Wall Street’s success, and the financial market’s gangbusters year has yielded higher-than-expected revenue gains. Even with the padded wallet, the state’s economic situation is far from settled. President Donald Trump’s sweeping domestic policy package will sharply reduce federal funding for health care and food assistance programs to New York. Democrats are bracing for additional cuts next year, and a market downturn would create additional financial headaches.

“So I can stand here today and say we can do quite a few things without any source of additional revenue based on the revenue coming in,” Hochul said during a November news conference. “But I don’t know what Washington is going to do. Are they going to jam us up for another $3 billion in Medicaid costs? This is the uncertainty that makes it challenging to do what we’re doing.”

Fellow Democrats are sympathetic — potentially offering political cover for the governor amid attacks from Delgado and Stefanik. State lawmakers acknowledge that the political and financial stakes are massive.

“We’re living in very nerve-wracking times from a planning perspective,” said state Senate Finance Chair Liz Krueger, an influential Manhattan Democrat. “Governments are just like businesses, we want to know what we’re walking into. We want to plan. We want to know what things are going to cost.”