“I believe that taxes will indeed be a topic of discussion,” stated Hochul’s budget chief, Blake Washington, to reporters in November. Hochul gave her full support to the capital plan last autumn and approved it despite lingering questions about the unaccounted-for $33 billion required for its funding. Although Hochul has assured that income taxes will not be raised in 2025, this assurance does not cover other taxes and fees, such as a payroll mobility tax she introduced last year while pausing congestion pricing.
On Monday, Hochul shifted responsibility to the legislature to propose new taxes, stating, “This is their responsibility. They have committed to identifying funding sources, and I will continue to collaborate with them.” In a joint letter on Christmas Eve, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins formally opposed the commencement of the capital plan on January 1, giving them the opportunity to negotiate its overall scope and content during state budget discussions.
Governor Kathy Hochul has expressed her full backing for the MTA’s proposed $68 billion five-year capital plan, yet she has not outlined how she plans to cover the $33 billion shortfall. In the joint letter, Heastie and Stewart-Cousins objected to the $33 billion deficit within the plan, raising concerns about the lack of actual funding. “Our primary concern was that this plan would burden the state with a $33 billion shortfall without any concrete financing,” said state Senate Communications Director Mike Murphy.
A spokesperson for Hochul declined to confirm whether the governor will unveil a plan publicly to address the revenue gap within her executive budget, potentially leaving New Yorkers in the dark as negotiations proceed over which taxes and fees could be imposed once the budget is eventually passed, as has been customary in previous years.
Towards the end of last year, Senate Finance Committee Chair Liz Krueger anticipated the need for new revenue sources within the plan and emphasized the importance of the governor making this information public. “It is crucial for the governor to present a transparent plan,” stated Krueger.
Hochul is expected to unveil her budget proposal in two weeks, which includes a raise in the New York child tax credit. The governor announced on Monday at the Vanderbilt YMCA in midtown east that the tax credit would increase to $1,000 per child under the age of 4 and $500 per child aged 4 to 16, up from the current $300 per child. The full credit would be accessible to households earning under $110,000 annually, with a phased-out amount for those with higher incomes. Hochul did not disclose the cost of increasing the tax credit.
Additionally, Hochul plans to suggest issuing $500 checks to families earning below $300,000 a year as an “inflation refund,” a move expected to cost the state $3 billion.
