Hochul won't increase income tax to balance New York's $260B budget proposal
NEW YORK (WABC) -- New York Gov. Kathy Hochul won't increase income taxes to balance her $260 billion state budget proposal that she unveiled Tuesday afternoon in Albany.
Despite earmarking state money for free child care for a new "2-Care" program for 2-year-olds and up in New York City, and for 4-year-olds and up everywhere else, the governor said the plan won't require a tax hike for two years.
Hochul has promised $4.5 billion toward expanding child care programs statewide, a $1.7 billion increase from the current state budget.
While the budget will not increase income taxes, Hochul will announce a three-year extension of the 7.25% corporate tax rate on companies that earn more than $5 million, originally implemented by then-Gov. Andrew Cuomo in 2021 and renewed under Hochul in 2023.
Hochul will also call for nicotine pouches like Zyn to be taxed the same as cigarettes, which currently face a state excise tax of $5.35 per pack
Hochul is proposing to again spend $77 million to pay for extra police on the subway and $535 million to pay more than 2,000 National Guard personnel who are working in prisons.
The proposed budget also includes $20 million for Riverbank State Park in Harlem and a $5 million program, tied to the World Cup, to fund soccer fields.
Spending under the Medicaid program would increase by 11.4% and school aid will go up 4.3%.
The budget has $10.3 billion less in federal money slashed by President Trump, sweeping domestic policy bill and expiring pandemic aid.
The record-high budget proposal for the 2026-2027 fiscal year tops last year's $252 billion executive proposal.
A Hochul aide cited strong returns from Wall Street bonuses this year and continued consumer spending.
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