New York state Democratic lawmakers are pushing to raise the corporate tax rate on businesses to help bail out Mayor Zohran Mamdani, who is facing a projected $5.4 billion deficit in the city budget, sources told The Post.
“There’s a huge appetite to increase the corporate tax,” said a source who recently met with both state Assembly Speaker Heastie (D-Bronx) and Senate Majority Leader Andrew Stewart-Cousins (D-Yonkers).
“It’s the most popular of the menu of taxes,” the city official added.
Another source familiar with the budget talks said lawmakers were “seriously discussing” a corporate tax increase.
Democrats in the Assembly are “very firm” in demanding some sort of tax increase, the Albany insider said.
It’s bound to put them at odds with Gov. Kathy Hochul, who has been opposed to a big tax hike as she seeks re-election this year and aims to keep wealthy New Yorkers and businesses from fleeing New York.
“Some in Albany may be pushing for a political win by raising taxes just to be able to say that they hurt corporations, but the reality is that New York’s economy takes the loss if we continue to raise taxes when it isn’t necessary,” said Steven Fulop, president and CEO of the pro-business Partnership for New York City.
“We are forcing jobs to leave New York as we saw with Apollo this week which only further deepens the affordability crisis. The governor is right to push back, and we hope she holds the line,” Fulop said.
It was revealed on Sunday that a major Wall Street firm, Apollo Global Management, a $900 billion asset manager, is plotting a second US headquarters in the Sunbelt as Mamdani pushes to hike taxes on deep-pocketed corporations.
Legislators in the Assembly and Senate have been poring over a list of tax hikes on the wealthy sought by Mamdani, including increasing the income tax levy on millionaires, on estates and on corporate taxes.
Lawmakers have particularly discussed the corporate tax in closed-door conversations, sources said.
During last year’s mayoral campaign, Mamdani proposed raising the top corporate income tax rate for major corporations from 7.25% to 11.5%.
Another proposal would increase the city’s corporate tax from 9% to 10.8% on financial sector firms and 8.85% to 10.62% on non-finance sectors. Mamdani’s team projected that such an increase would raise $1.5 billion a year.
The Democrat-run state Assembly and Senate have their own corporate tax proposals similar to Mamdani’s.
The Assembly estimates that its own proposal to increase the statewide corporate tax from 7.25% to 9.25% for companies making more than $10 million would generate around $1.9 billion per year in revenue.
The Senate proposes increasing the statewide corporate tax rate from 7.25% to 9% for businesses with $5 million in income.
But Hochul’s office said Monday she remains opposed to such increases as she seeks re-election to a second, full four-year term. She worries about businesses as well as wealthy New Yorkers who pay a disproportionate share of income taxes fleeing the city.
“The governor’s position has not changed. She has been clear she will work with Mayor Mamdani and the state legislature to find ways to support New York City and deliver on a shared affordability agenda,” said Hochul spokesperson Jen Goodman.
The state budget is due Wednesday, April 1. But Hochul and lawmakers are not close to an agreement and talks could drag on for weeks.
An Assembly Democratic source said Hochul still holds tremendous sway in budget negotiations, and agrees she’ll likely fight any tax increase this year.
The insider said Hochul and the legislature can tap into the state’s $14.6 billion to settle any differences, if necessary.
“The rainy day fund is in good shape,” the source said.
Hochul and the legislature drained $7 billion from the emergency fund last year to shore up the Unemployment Insurance Trust Fund— to increase benefits for unemployed New Yorkers and cut costs to businesses.
The city budget, heavily reliant on Albany support, isn’t due until July 1.
Negotiations are so sensitive that that tax-happy Mamdani skipped a tax the rich rally Sunday headlined by democratic socialist mentor Sen. Bernie Sanders to avoid offending Hochul.
