New York State lawmakers are seriously discussing raising the corporate tax rate to help bail out New York City Mayor Zohran Mamdani, who is facing a projected $5.4 billion deficit in the city budget, sources told the NY Post.

“There’s a huge appetite to increase the corporate tax,” said a source who recently met with both Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins. “It’s the most popular of the menu of taxes.”

Democrats in the Assembly are described as “very firm” in demanding some form of tax increase, with lawmakers in both chambers poring over a list of proposals including hikes on millionaires, estates, and corporations. Corporate taxes have emerged as the leading option in closed-door conversations, sources said.

During last year’s mayoral campaign, Mamdani proposed raising the top corporate income tax rate from 7.25% to 11.5% for major corporations. A separate proposal would increase the city’s corporate tax on financial sector firms from 9% to 10.8%, which Mamdani’s team projected would generate $1.5 billion annually. The Assembly and Senate have advanced their own versions of similar increases.

The push is on a collision course with Governor Kathy Hochul, who has consistently opposed significant tax hikes as she seeks re-election and works to prevent wealthy residents and businesses from leaving the state. “The governor’s position has not changed,” said Hochul spokesperson Jen Goodman.

Business leaders warned the proposals would accelerate an already visible exodus. Apollo Global Management, a $900 billion asset manager, was reported Sunday to be planning a second U.S. headquarters in the Sunbelt amid the tax climate uncertainty.

“We are forcing jobs to leave New York,” said Steven Fulop, president of the Partnership for New York City. “The governor is right to push back, and we hope she holds the line.”

The state budget is due Wednesday, though Hochul and legislators remain far from agreement and talks are expected to drag on for weeks. The city budget, heavily dependent on Albany support, is not due until July 1. Lawmakers could also tap the state’s $14.6 billion rainy day fund to bridge differences if necessary.

In a sign of how delicate the negotiations have become, Mamdani himself skipped a “Tax the Rich” rally Sunday headlined by his democratic socialist mentor Sen. Bernie Sanders, apparently to avoid antagonizing Hochul ahead of critical budget talks.

(YWN World Headquarters – NYC)