ALBANY, New York – Governor Kathy Hochul’s proposed tax on New York City’s expensive real estate is giving rookie Mayor Zohran Mamdani another much-needed financial boost.
Hochul is supporting an annual surcharge on non-primary Big Apple residences priced at $5 million and above, the proceeds of which will be used to pay off Mamdani’s $5.4 billion city budget gap.
By proposing the tax, the moderate Democratic governor is again going to bat for the new democratic socialist mayor, risking right-wing political attacks and alienating the business community by reversing her opposition.","Add":{"Target": :"New","Property":(),"url": :"https://www.politico.com/news/2026/03/11/tax-fight-will-test-mamdanis-influence-in-albany-against-hochul-00823627","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30000","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30001","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>overturned his protest To raise taxes this year.
But the surprise move will also help Hochul boost her support in vote-rich New York City, where the Buffalo-born governor will need to run up the score as she seeks re-election this year. At the same time, the tax proposal deepens the growing symbiotic relationship between Hochul and Mamdani.
“This is one of the most politically astute decisions he’s made,” said Democratic strategist Trip Yang. “She can maximize a broad spectrum of allies and minimize criticism. It’s the politically optimal decision and it’s a good policy decision.”
Hochul’s closely watched alliance with Mamdani has been a national test case for how two different wings of the Democratic Party can govern alongside each other. And in the four and a half months since they took office after last year’s surprise victory, they have become each other’s most important political and governing allies – an arrangement that has linked their electoral fortunes.
Mamdani and Hochul disagree on key issues such as policing and Israel. Yet both the centrist governor and the far-left mayor have insisted they can work together in the interest of supporting New York City, the engine of the state and national economies. And that relationship has been mutually beneficial.
The governor has taken repeated steps this year to promote the new mayor to the position. He won his first government victory by supporting the expansion of free child care. A few weeks later, she agreed to send $1.5 billion in government aid to New York City to close the budget gap. His real estate tax plan, which is expected to generate about $500 million in annual revenue, is the latest effort to help Mamdani’s financial situation.
Meanwhile, the mayor’s political support has been crucial for Hochul. They supported his re-election bid","Add":{"Target": :"New","Property":(),"url": :"https://www.politico.com/news/2026/02/04/new-york-city-mayor-zohran-mamdani-to-endorse-gov-kathy-hochul-00764997","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30002","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30003","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>They supported his re-election bid In February – A Nod That Was a Knockout Punch","Add":{"Target": :"New","Property":(),"url": :"https://www.politico.com/news/2026/02/10/delgado-drops-campaign-against-hochul-for-ny-governor-00773635","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30004","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30005","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>a knockout punch to the governor’s only primary challenger, Lieutenant Governor Antonio Delgado. The mayor has also avoided directly confronting the governor over his opposition to raising taxes on wealthy people and large corporations — a signature issue of his successful campaign.
Hochul on Wednesday called his proposal “a common sense overload” aimed at ultra-wealthy people who don’t live full-time in the city. She also continued to insist that sweeping proposals like increasing the income tax rate or increasing corporate levies would not be on the table.
And while her office cautioned that the efforts are not equivalent to a state-sanctioned Gotham bailout, Hochul acknowledged that she is trying to improve the city’s financial situation.
“We’re trying to help the city reduce it,” he said of the $5.4 billion budget deficit. “I’m this mayor’s partner. I’ve found a way. We’re not looking to do this anywhere else in the state because the whole purpose is to close the city’s budget gap.”
Mamdani hailed the announcement as an important development as he also tries to implement an expensive agenda.
“Thanks to Governor Hochul’s support, we are one step closer to balancing our budget by imposing a pied-a-terror tax on the ultra-wealthy and global elite – the first of its kind in our state,” the mayor said in a statement.
Hochul’s alliance with Mamdani began last summer after her Democratic mayoral primary victory against his predecessor, former Governor Andrew Cuomo, with negotiations that ended with the governor’s endorsement.","Add":{"Target": :"New","Property":(),"url": :"https://www.politico.com/news/2025/09/18/hochul-endorsed-mamdani-now-comes-the-hard-part-00570052","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30006","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30007","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>with the support of the Governor. Their relationship deepened during the fall and strengthened during the Democratic comeback after the elections in Puerto Rico.
Hochul led Mamdani to two important victories earlier this year. She agreed to spend $1.7 billion to expand free child care","Add":{"Target": :"New","Property":(),"url": :"https://www.politico.com/news/2026/01/23/how-child-care-gave-hochul-and-mamdani-common-ground-and-political-cover-00740985","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30008","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db30009","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>Expand free child care – Satisfying a common and paramount policy goal for both Democrats. When? Mayor warned","Add":{"Target": :"New","Property":(),"url": :"https://finance.yahoo.com/news/mamdani-warns-nyc-faces-fiscale-113300728.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAA1Y15Y 0NcZRoujtEF4XvJ7P3-XIH1qv_zRmiYoBUC0CWfS9K3B_nOe2N7qguJy3HoPaiEQZLyOQW7lQew2eJfZS8 iw1F9zez_3LPeyvS6x66ZGnL9xVSWG-oqOhHP9HDpKjNHxe4kIKJNgcjOsg4OgGbkJM43yhIZInA3uWZZRA","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db3000a","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db3000b","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>Mayor warned Hochul agreed that the city faced a financial crisis worse than the 2008 recession 1.5 billion dollar investment","Add":{"Target": :"New","Property":(),"url": :"https://subscriber.politicopro.com/article/2026/02/under-pressure-to-raise-taxes-hochul-sends-more-cash-to-new-york-city-00783239","_Identification": :"0000019d-943d-da2c-adbf-9cbf3db3000c","_Type": :"33ac701a-72c1-316a-a3a5-13918cf384df"},"_Identification": :"0000019d-943d-da2c-adbf-9cbf3db3000d","_Type": :"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}”>$1.5 billion investment of state cash after a weekend meeting.
Yet that extra aid and announced cost savings didn’t fully close the gap — or satisfy left-wing calls to raise taxes on New York’s wealthiest residents.
Democratic state lawmakers pressured Hochul to raise taxes after he proposed budget plans that would raise rates on people making $5 million and more. But the mayor – a national figure who wields influence over an ardent political base – did not publicly trust the governor. He decided not to attend a tax-the-rich rally in Albany, and very few people attended the event. Mamdani was also not seen at the march rally with his mentor Vermont Senator Bernie Sanders.
Meanwhile, Mamdani’s team privately circulated a menu of tax increase options. Those proposals included a “city mansion tax” on properties worth more than $5 million — a provision that appears to be a beta version of Hochul’s pied-a-terre plan unveiled this week.
And even though Hochul was publicly opposed to raising taxes in state budget negotiations, his team was privately assessing its options. The surcharge proposal had been discussed internally among Hochul employees in recent weeks, according to two people familiar with the negotiations. The mayor was told about the idea earlier this week, those people said.
Hochul also discussed the idea Tuesday evening with the Real Estate Board of New York, a powerful trade association, according to three people with direct knowledge of those discussions.
The tax proposal still must be approved in the state budget, the due date of which is now more than two weeks away. Top legislative Democrats in Albany said Wednesday they would review the proposal, but it would likely be approved in some form: The Democratic-controlled Legislature has proposed a variety of bizarre measures in recent years.
However, New York’s business elite was less receptive. Many private sector boosters consider Hochul a bulwark against Mamdani’s policies and fear that businesses will now be tempted to leave the city if the tax climate deteriorates. This also includes the real estate community, whose leaders warned that the tax would have a widespread impact.
“The impact will reach far beyond a small group of owners,” said James Whalen, president of the Real Estate Board of New York. “This will not increase the amount of expected revenue, will lower property values and increase costs.”
Other business leaders worry the tax will accelerate money flight.
“I’ve told this to the mayor, I’ve told this to the governor: We don’t want people to leave New York. We want New York to be an attraction,” said John Catsimatidis, a billionaire supermarket and energy mogul.
New York’s taxes are tough, he said – especially on real estate.
Catsimatidis said, “At a certain point you get to the – whatever you call it – ‘fuck you’ level.”
Joe Anuta and Chris Sommerfelt contributed to this report.
