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How Hochul and Mamdani forged a compromise over taxing the rich
By
Elizabeth Kim
,
Jon Campbell
and
Jimmy Vielkind
Published Apr 16, 2026
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Michael M. Santiago/Getty Images
By
Elizabeth Kim
,
Jon Campbell
and
Jimmy Vielkind
Published Apr 16, 2026
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When Mayor Zohran Mamdani endorsed Gov. Kathy Hochul in February, some on the left expressed shock and frustration. To them, the mayor had given away his greatest source of leverage in pushing the governor to tax the rich.
Now, the two Democrats have reached a mutually beneficial compromise through a pied-à-terre tax proposal aimed at ultrawealthy second-home owners. The mayor, a democratic socialist, can claim a political victory of having moved the needle on a wealth tax, while the governor, a moderate who has opposed taxing the rich, can seek to end a contentious budget battle during a re-election year.
The deal appears to have cooled rising tensions between two elected officials who need one another.
“From her standpoint, she has stayed firm to what she has said,” said Jay Jacobs, the state Democratic Party chair. “The mayor, for his part, needs more money to fill his budget gap. This provides a good amount. Everybody ought to end up happy on this.”
Talks about the pied-à-terre proposal turned serious in recent weeks, two sources familiar with the matter said. The mayor and governor spoke about the proposal on the phone earlier in the week.
The mayor’s team has pushed for additional revenue to plug a $5.4 billion budget gap and floated several ideas, including raising income and corporate taxes, which the moderate governor shot down. Other ideas, like paring back a tax break used by lawyers and other professionals, were also bandied about, said the sources, who requested anonymity to describe private talks.
They settled this month on a pied-à-terre tax, a long-proposed idea that was last seriously floated in 2019.
The governor won over City Hall on the proposal before sharing it with Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins, Stewart-Cousins said. The legislative leaders learned of the plan after the close of business on Tuesday – just hours before the New York Times first reported on Hochul’s plan.
Democratic strategist Evan Roth Smith said the tax proposal serves as a much-needed “off-ramp” amid intensifying budget battles in both Albany and New York City. He said he had heard last year that a pied-à-terre was on a list of “doable things” that Hochul had provided the mayor.
“Mamdani gets to take a win to his coalition. Hochul looks like she can govern and manage the mayor,” Smith said. “And they both maintain the comity of their alliance.”
The mayor and his allies were quick to take a victory lap on Wednesday, but Mamdani also credited Hochul.
“Thanks to the support of Governor Hochul, we are one step closer to balancing our budget by taxing the ultra-wealthy and global elites with a pied-à-terre tax — the first of its kind in our state,” Mamdani said in a statement. “Alongside the governor, our administration is fighting every day to make sure we address this fiscal deficit fairly, where the wealthy contribute what they owe and our budget reflects our commitment to the working New Yorkers being priced out of our city.”
Hochul won over City Hall before sharing the pied-à-terre proposal with Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins.
Susan Watts/Office of Governor Kathy Hochul
In a statement on X, the New York City chapter of the Democratic Socialists of America said, “Hochul just BLINKED in the standoff over taxes on the rich.”
“Our pressure is working,” the group added.
On Wednesday, Hochul denied that her proposal was intended to appease the left. She said she prefers the pied-à-terre tax because it primarily applies to people living out of the state — or even out of the country.
“There are literally Russian oligarchs buying up properties, driving up the property values, and that has an effect,” Hochul said. “Now, they're all welcome to stay. But I think there's a logic behind them also contributing to the city because they're here because this is a great city and it has so much to offer.”
The governor reiterated her opposition to income and corporate tax hikes, but didn’t close the door on other forms of tax increases when given the opportunity.
She has also said that the proposal came from her and that the City Council will have to come up with additional savings on its own.
“As they're diving into it, I'm asking them to consider some other areas where costs can be managed in a different way,” Hochul said. “So we're not done yet, but also it is the responsibility of the mayor and the City Council to find more savings.”
The pied-à-terre tax would require legislative approval as part of the state budget, which is now more than two weeks late as Hochul and leaders struggle to reach a consensus on the governor’s top policy proposals.
Stewart-Cousins, a Yonkers Democrat, said she has supported similar proposals in the past and shares the goal of helping New York City. But, she said, other municipalities are also facing fiscal shortfalls.
“We have all understood how important it is to help the city. We understand the city’s an economic driver for the entire state,” Stewart-Cousins said. “This just got on the table yesterday. … I think that we are trying to figure out, when it comes to whatever region of the state, what works for that region. There’s no one-size-fits-all.”
But how far the deal goes in satisfying the left may depend on other unresolved issues in the budget negotiations. Progressives have objected to Hochul’s proposal to delay implementing a landmark climate law and are urging her and the Legislature to provide more funding for affordable housing and pass legislation that provides greater protections for undocumented immigrants.
“If you look at the breadth of reactions, I don’t think this stops anyone from demanding higher taxes on the rich,” said Jasmine Gripper, director of the Working Families Party. “No one is like ‘Thank you, you can stop now.’ Everyone is looking to push for more.”
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Elizabeth Kim
Elizabeth Kim is a reporter on the People and Power desk who covers mayoral power. She previously covered the pandemic, housing, redevelopment and public spaces. A native of Queens, she speaks fluent Mandarin. Got a tip? Email [email protected]
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Jon Campbell
Jon Campbell covers the New York State Capitol for WNYC and Gothamist. Prior to that, he covered the Capitol for more than a decade for the USA TODAY Network. He has twice earned the Walter T. Brown Memorial Award, an honor given annually by the Legislative Correspondents Association alumni for outstanding state government coverage. Jon grew up in the Buffalo area and graduated from the University at Albany. Got a tip? Email Jon at [email protected] or Signal at JonCampbellNY.90.
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Jimmy Vielkind
Jimmy Vielkind covers how state government and politics affect people throughout New York. He has covered Albany since 2008, most recently as a reporter for The Wall Street Journal. Jimmy led a team of reporters that won a New York Press Club award for coverage of Andrew Cuomo’s downfall and was on a team that won a Gerald Loeb Award for coverage of Amazon’s HQ2 process. A native of the Capitol Region, Jimmy has two degrees in urban planning. His position is funded by a grant from the Corporation for Public Broadcasting. Reach Jimmy at [email protected].
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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