State lawmakers reject Hochul’s NYC business tax proposal

In the wake of slamming the brakes on congestion pricing, Gov. Kathy Hochul on Thursday made an 11th hour — and unsuccessful — pitch to state lawmakers.

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What You Need To Know

• Gov. Kathy Hochul asked state lawmakers to approve a new tax on New York City businesses that would fill a $1 billion hole that the MTA must now fill
• Albany lawmakers rejected Hochul’s last-minute proposal to replace congestion pricing with a tax she argues would raise the $1 billion needed for long-planned transit system upgrades
• But now, lawmakers and Hochul need to decide on how they’ll fund the MTA’s multi-billion dollar projects planned for the future

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She asked them to approve a new tax on New York City businesses that would fill a $1 billion hole that the MTA must now fill.

But Albany lawmakers rejected Hochul’s last-minute proposal to replace congestion pricing with a tax she argues would raise the $1 billion needed for long-planned transit system upgrades.

“She just went to the Vatican to discuss climate change. I don’t think this was part of the discussion with the Pope,” state Sen. Liz Krueger, a Manhattan Democrat, said. “I think it does not have support.”

Hochul’s proposal would increase what’s known as the “payroll mobility tax” on city businesses.

“A payroll tax just for New York City is something that we think is a horrible idea,” state Senate Deputy Majority Leader Michael Gianaris, a Queens Democrat, said.

Sources told NY1, Hochul’s team offered to sign other policies into law as a trade for votes on the new tax.

“This whole thing was just dropped on us just yesterday and to expect us to have serious, substantive, deliberative discussion on such an important issue in 24 hours is unrealistic,” Gianaris said.

The legislature approved a similar hike just last year.

“We put the burden on New York City to bail out the MTA just last year with this exact tax and I don’t think many of us who represent the city support doing it again,” added Gianaris.

But now, lawmakers and Hochul need to decide on how they’ll fund the MTA’s multi-billion dollar projects planned for the future.

“People who think this is just a loss of a billion — what’s that in the MTA board, in the MTA capital plan? We’re talking $15 billion,” Krueger said.

The state Senate finance chair also listed projects at risk.

“To cancel the contracts for the Second Avenue Subway, for ADA disability access to our subways and buses, to cancel the bus and subway contracts upstate,” she said.

Still, others celebrated.

“Pre-pandemic policy in a post-pandemic work and yesterday’s decision was a decision in good government and listening to many New Yorkers who have raised concerns for quite some time now,” state Assemblymember Kenny Burgos, a Bronx Democrat, said.

Thursday was supposed to be the final, official day of the legislative session.

But now lawmakers are discussing a possible later return to Albany before the end of the year.

“This is all developing, so we’ll see where it goes,” Gianaris said.

“Now we’re going to have to figure out, go back to the drawing board and address how we’re going to pay for the remainder of the capital plan and for the responsibility of how we’re going to pay for a new capital plan,” state Sen. Jessica Ramos, a Queens Democrat, said.

Hochul has yet to take questions from reporters since making the announcement official in a pre-taped video on Wednesday.