Gov. Kathy Hochul proposes $1B income tax cut as she makes post-election affordability push

ALBANY, New York — Gov. Kathy Hochul wants to cut state income taxes by $1 billion over the next two years — part of an agenda aimed at combating voters’ economic concerns that helped deliver President-elect Donald Trump’s victory.

The Democratic governor is also trying to improve her own political standing ahead of her 2026 reelection.

Hochul unveiled the tax plan in her fourth State of the State address Tuesday delivered at a performing arts venue near the state Capitol. The agenda, laid out in a 140-page briefing book, focuses on practical pocketbook issues — a sign the governor is taking seriously the results of the presidential election.

She proposed tackling child care costs, bolstering public safety on mass transit and facilitating buying a house in the relatively high-cost state. The tax cut — her biggest-ticket item, and one that requires legislative approval — would affect an estimated 8.3 million taxpayers for joint filers who earn up to $323,200. Rates would be cut across five of the state’s nine tax brackets.

“Let me say this — a state of the state address can be full of flowery rhetoric and still fail to address the needs of the people,” the governor said in her prepared remarks. “I believe it needs to be much more than just lofty words. It should be a concrete blueprint that will deliver actual results that the people will feel.”

Hochul is in a precarious position: Consistently low favorability ratings have inspired potential challenges next year from New York Reps. Mike Lawler, a Republican, and Ritchie Torres, a Democrat.

Hochul’s office has been announcing her proposals in recent weeks, including an expansion of free school lunches for students and a $3 billion tax rebate plan to counter inflation and prevent private equity firms from buying single family homes.

Her agenda also includes provisions to crack down on drugged driving to contend with recently legalized cannabis sales, lessen the economic impact of artificial intelligence on workers and prevent child drowning. Her policy book includes variations of the word “streamline” two dozen times and “unlock” nine times.

Tax cuts have been popular ideas for New York Democrats who are struggling to find their footing following Trump’s election.

New York City Mayor Eric Adams — facing an even tougher reelection this year — wants to end the city’s income tax for people who earn less than $46,000. Assembly Speaker Carl Heastie has also signaled he would support such an elimination.

Details of Hochul’s plan will not become clear until she releases her budget proposal next week. The budget is due to pass by April 1, the start of New York’s fiscal year.

Before Hochul spoke, Lawler sharply criticized her over her embrace of a $9 toll program for cars entering Manhattan below 60th Street, which started this month. (Hochul last year announced she would reduce the toll from $15 to $9.) During a news conference with state Republicans in Albany, the Hudson Valley lawmaker knocked the governor “as a feckless and failed governor who needs to be replaced in 2026.”

Lawler said he expects to decide this year whether he will run for governor of a state that has not elected a Republican in a generation.

“I’ll do everything in my power to make sure she is not governor in 2026,” Lawler said.

Hochul’s full briefing book can be viewed here. Some highlights:

— Hochul is dedicating a big chunk of her agenda to cutting red tape. She wants to create self-service kiosks for programs and SNAP and digitize the process of obtaining youth working papers. The governor is also proposing smoothing the process of moving utility lines during MTA construction projects and letting local governments work with the Dormitory Authority of the State of New York.

— Her agenda includes a host of proposals to boost new parents, like a plan to give under-resourced households $100 a month during pregnancy and $1,200 checks at birth. She wants a “Child Care Substitute Pool” to help day cares avoid closures due to staff illnesses. And Hochul is proposing $100 million to fund the construction of new daycare facilities.

— The governor wants to make tuition free at SUNY and CUNY community colleges for students who are 25 or older and pursuing associates degrees in “high-demand occupations, including nursing, teaching, technology, engineering, and more.”

— Hochul wants to regulate algorithmic pricing on websites and new regulations on overdraft fees. She’s also framing parts of her housing plan with affordability messaging — including proposals to build more starter homes and provide state money for down payments. The governor also wants to impose a 75-day waiting period for institutional investors can bid on single family houses put up for sale.

— As previously announced, Hochul wants to “address critical gaps in the standards for involuntary commitment” of individuals dealing with mental health crises. Other parts of her public safety agenda include plans to change the state’s discovery law, provide more support for child victims of crime, and crack down on driving while under the influence of marijuana.

— The governor is proposing $200 million “to make real investments into tangible strategies” to improve downtown Albany, including an overhaul of the New York State Museum.

— Hochul is also continuing her attempts to reduce the amount of time kids spend on phones. She will put her plan to ban internet-enabled devices from classrooms into her budget and wants to provide grants of up to $15 million to community centers as part of a “Get Offline, Get Outside” campaign.