Gov. Kathy Hochul will be presenting her 2026 budget plan. | Angela Weiss/AFP/Getty Images
Gov. Kathy Hochul is trying to defuse a tax time bomb before it goes off.
The governor today will unveil a $252 billion budget that includes a five-year extension of high tax rates for wealthy New Yorkers early.
The move, in part, could help the unpopular Hochul avoid a politically fraught debate over an expiring tax hike when she seeks a second full term in 2026.
Hochul’s budget would increase spending by 3.6 percent over the previous plan, reaching more than a quarter of a trillion dollars.
And much of the budget proposal is aimed at shoring up Hochul’s troubled standing with voters.
If approved, the tax extension would address a 2020 tax rate hike that was approved during the financial uncertainty created by Covid. The current top tax rates on very wealthy people (think New Yorkers who make more than $25 million a year) would not change.
Hochul, like her predecessor Andrew Cuomo, has not eagerly embraced tax increases on rich people.
Fiscal hawks have warned that doing so risks the flight of the wealthy to lower tax states and deprives New York of its much-needed tax money.
Hochul’s push for an “affordability agenda” is a Democratic answer to President Donald Trump’s successful White House bid last year that focused heavily on voters’ gnawing cost-of-living worries.
She wants expanded child care access, more children getting school meals at no cost and a $3 billion rebate check program to counter inflation.
“This all combined is $5 billion in relief for ordinary New Yorkers in one year, which we think is meeting the moment of what taxpayers, what New Yorkers, are asking of elected leaders,” Blake Washington, Hochul’s budget director, said in an interview with Playbook.
But the budget plan is not Trump-proof. The new president and the Republican-led Congress have signaled plans to press for deep spending cuts.
The proposal does not include any contingency measures if Trump and the Republican-led Congress move to strip funding from state governments.
“We have to wait for a lot of those policies to come forward,” Washington said. “We’re sort of in a holding pattern.”
And New York’s own spending has climbed significantly in recent years. The state’s share of the Medicaid program would reach $35.4 billion in the governor’s budget — a 14 percent overall hike. School aid spending would increase by 4.7 percent to $37.4 billion.
The unveiling of Hochul’s spending plan will begin a roughly 10-week sprint in Albany to get a budget approved by April 1, the start of New York’s fiscal year.
Spending plans approved by state lawmakers during Hochul’s administration have routinely blown past that deadline. And negotiations over the budget are often opaque in a state Capitol famous for caprice and secrecy.
Hochul, for now, has not revealed her preferred plan for increasing revenue for the Metropolitan Transportation Authority’s capital plan.
The governor has insisted that the decision should include the top legislative leaders, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins. — Nick Reisman
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WHERE’S KATHY? Presenting the new 2026 budget at the State Capitol in Albany.
WHERE’S ERIC? Holding an in-person media availability at City Hall.
QUOTE OF THE DAY:“I grew up with New York’s finest. We’ve got to give them their authority back. You won’t have any crime. There will be no crime. … We’re going to make our cities safe again.” — President Donald Trump, riffing on the NYPD in a speech at his inaugural parade.
ABOVE THE FOLD
Mayor Eric Adams was slammed for skipping Martin Luther King Jr. Day's celebration to attend President Trump's inauguration. | Angelina Katsanis/POLITICO
ADAMS’ ABSENCE: Black political and religious leaders criticized Mayor Eric Adams’ decision to skip local events celebrating Martin Luther King Jr. Day on Monday in favor of attending the inauguration of Trump — who’s indicated a willingness to pardon the indicted mayor.
“Some that should be here celebrating Dr. King with us in this room have chosen to go to Washington to celebrate felon 47,” City Council Speaker Adrienne Adams said to cheers during one MLK event.
The mayor, who was scheduled to attend the Brooklyn event as of Sunday night, left town around 3 a.m. to head to Trump’s inauguration in what his staff described as a last-minute decision following a last-minute invitation from Steve Witkoff, Trump’s Middle East envoy and a New York real estate developer.
So while his fellow Democrats — and reelection rivals — were in New York City honoring King, Adams was in an overflow room in the U.S. Capitol, posing for photos with influencer brothers Logan and Jake Paul and spending time with cryptocurrency billionaire (and campaign donor) Brock Pierce and virulently anti-gay pastor Mark Burns, who has called for the arrest of educators who mention LGBTQ+ issues.
Adams argued he was following King by putting “partisan politics aside to do what’s best for our country.”
But his absence was noted from the altar at the Convent Avenue Baptist Church in Harlem, where he was also initially scheduled to be.
“My staff has been telling me, ‘don’t say anything, Dr. Kilgore,’” the reverend, James Kilgore, said at that event. “We have a few very important elected officials who are not present. So I don’t have to say anymore.”
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CITY HALL: THE LATEST
Inez Dickens could be appointed to the New York City Board of Elections. | Courtesy of Elbert Garcia for Rep. Charles Rangel
ASSEMBLYMEMBERS’ NEXT ACT: Inez Dickens, who just finished her final term as a Harlem Assemblymember, could be in line for an appointment to the New York City Board of Elections.
The Manhattan Democratic Party initially planned to nominate former Assemblymember Danny O’Donnell — whose term also just ended — to fill the board seat opened by the death of retired Judge Carol Edmead. But O’Donnell pulled his name out of consideration, he told Playbook, because Hochul is considering appointing him to the Parole Board and he couldn’t hold both jobs.
AD-BNB: Airbnb is dropping $1 million on a digital ad boosting a City Council bill aimed at rolling back regulations on short-term rentals of one and two-bedroom homes.
The ad, which is running on streaming services, YouTube and social media, pitches the bill as a way to keep homeownership affordable. “But big hotel investors and special interests want to ban us from renting our homes when we’re not there, all to pad their bottom lines,” a voiceover says.
The tech giant, which is leading a group called Restore Homeowner Autonomy & Rights, is in a big money lobbying battle over Int. 1107 with the Hotel Association of New York City and the Hotel and Gaming Trades Council, which argue that Airbnb drives up costs for tenants by keeping apartments off the market.
The bill is backed by Speaker Adams but has just four other co-sponsors after losing Deputy Speaker Diana Ayala who faced pressure from the union. — Jeff Coltin
More from the city:
— Trump’s planned executive orders on immigration are prompting legal threats and anxiety in the city. (Daily News)
— After Daniel Penny’s acquittal in a subway killing, there’s disagreement on whether the case will discourage self defense or normalize it. (Gothamist)
— Former Gov. Andrew Cuomo’s possible entrance into the mayoral race could upend the field. (Newsday)
A message from Amazon:
NEW FROM PLANET ALBANY
New Jersey Gov. Phil Murphy wants to eliminate congestion pricing. | Matt Rourke/AP
CONGESTION INDIGESTION: New Jersey's governor tried to leverage the first hours of Trump's presidency t o kill congestion pricing.
In a Monday letter to Trump, New Jersey Gov. Phil Murphy echoed Trump’s own criticism of congestion pricing as a “disaster” and urged the new president to give the New York tolling program a closer look.
“As you begin your second term as president, I welcome any opportunity to work with you and your administration where we can find common ground,” Murphy wrote. “One area where I believe our priorities align is congestion pricing.”
Murphy, who has so far unsuccessfully sued to block the tolling program that began earlier this month, said the tolls are “a disaster for working- and middle-class New Jersey commuters and residents who need or want to visit lower Manhattan.”
One way to upend congestion pricing could be through Murphy’s ongoing lawsuit against the federal government’s necessary approvals of the tolling program, which is being run by New York’s Metropolitan Transportation Authority. The Trump administration could conceivably take a different view of the tolls than the Biden administration, which supported them, though it’s unclear whether it’s too late to undo the approval. — Ry Rivard
More from Albany:
— Democrats are reviving a bill to require all eggs sold in New York to come from free-range chickens as bird flu stokes concerns. (Times Union)
— A newly elected member of the state Assembly will also hang on to his legislative seat in Rockland County government. (LoHud)
— A new group has formed to push for a cell phone ban in schools. (New York Post)
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KEEPING UP WITH THE DELEGATION
Rep. Tom Suozzi was at the U.S. Capitol rotunda for Trump's inauguration. | Francis Chung/POLITICO
COMMON GRIND: Rep. Tom Suozzi says he really, really believes in bipartisanship — and he’s been trying to prove it at every turn.
The moderate Long Island Democrat posted Monday that he was honored to be in the U.S. Capitol rotunda for the Republican president’s inauguration, saying there are areas of disagreement, but that the parties are on the same page in other respects.
“I agree with the President’s emphasis on stopping illegal immigration, deporting criminals and targeting the cartels and organized crime profiting from human exploitation at the southern border,” Suozzi said on X.
Though Democratic leaders including Sen. Chuck Schumer and Rep. Hakeem Jeffries attended Trump’s swearing-in ceremony, other rank-and-file House Dems, including Reps. Alexandria Ocasio-Cortez and Adriano Espaillat, did not.
Suozzi was chosen earlier this month as co-chair of the bipartisan Congressional Problem Solvers Caucus, which he joined as a founding member in his first stint in Congress.
And he referenced seeking common ground, including on economic security, in an interview last week on Comedy Central’s “The Daily Show.”
“We’ve got to figure out: How do we resist when essential, but how do we try to work together to get stuff done when we can?” he said. — Emily Ngo
More from Congress:
— Rep. Elise Stefanik, Trump’s pick for U.S. ambassador to the United Nations, will say today at her confirmation hearing that the president has “advocated for peace and no new wars.” (Fox News)
— Rep. Nick LaLota lauded Trump’s agenda, including “energy exploration and extraction,” as the New York GOP looks to Trump’s second term. (CBS News)
— Support for the Buffalo Bills made it to the national level when Schumer donned a Bills beanie as he left Trump’s inauguration. (Democrat & Chronicle)
NEW YORK STATE OF MIND
— Nassau County Executive Bruce Blakeman lauded Trump’s executive order on gender definitions. (New York Post)
— The family of Omer Neutra, an Israeli soldier from Long Island killed on Oct. 7, was featured at Trump’s inauguration rally. (Newsday)
— NYC influencers and social media users welcomed TikTok back into their lives on Sunday after the popular, yet controversial, platform briefly shut down. (amNewYork)
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IN MEMORIAM: Cecile Richards, former Planned Parenthood president, has died (CNN)
HAPPY BIRTHDAY: Mark Guma … Josh Isay of Orchestra … Former Assemblymember Aileen Gunther … Verra Mobility’s Tristan Massalay-Ellis … Blue Tiger’s Diana González … Patrick Zlogar … Tyler Cowen … Sam Feist … ABC’s Chris Donovan … Edelman’s Sean Neary, Lyla Shaibi and Lauren Grella … former Commerce Secretary Gary Locke … Sarah Sellman … Olivia Sieff … Matthew Cooper … Jonathan Grella … Caite Irvine … James Waters … Alex Plitsas … (WAS MONDAY): Georgina Bloomberg ... Peter S. Greenberg ... Melissa Rivers … Matt Capp
Missed Monday’s New York Playbook PM? We forgive you. Read it here.
