Hochul's New Tax Proposal Sparks Budget Talks, But Deal Unlikely This Week

New York lawmakers remain divided on issues like liability laws and protest restrictions around houses of worship.

Apr. 15, 2026 at 11:10pm

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A dynamic, fragmented painting depicting the New York State Capitol building in Albany, with the structure repeated in overlapping geometric shapes and vibrant blue, teal, and violet hues, conveying the complex and fractured nature of the state budget negotiations.The chaotic, fast-paced negotiations over New York's state budget reveal the political tensions and competing priorities between the governor and legislature.NYC Today

Despite some 'incremental progress' in budget negotiations, New York Governor Kathy Hochul and state lawmakers are still at odds over several key issues, including her proposal for a new 'pied-à-terre' tax on second homes in New York City as well as changes to liability laws and protest restrictions. Senate Democratic Leader Andrea Stewart-Cousins acknowledged that a final budget deal is unlikely to be reached by the original April 1 deadline.

Why it matters

The ongoing budget negotiations in New York highlight the political tensions and competing priorities between the governor and state legislature. Hochul's proposals around taxes, insurance reform, and protest restrictions are drawing pushback from lawmakers, underscoring the challenges in finding compromise on high-stakes policy decisions.

The details

Governor Kathy Hochul surprised lawmakers this week by proposing a new 'pied-à-terre' tax on second homes in New York City worth over $5 million. This proposal has gained some support from Senate Democrats, who had previously pushed for such a tax. However, lawmakers remain divided on other key issues, including Hochul's pitch to change liability laws in an effort to lower car insurance rates, as well as her proposal to restrict protests within 25 feet of houses of worship. Negotiations are also continuing over new anti-ICE measures and delays to the state's climate law mandates.

  • The original state budget deadline was April 1, 2026.
  • Lawmakers are set to vote again on Thursday, April 17, 2026 on another stopgap spending measure to keep state workers paid, though the duration of this measure is unclear.

The players

Kathy Hochul

The Governor of New York who has proposed several controversial measures as part of the state budget negotiations, including a new 'pied-à-terre' tax, changes to liability laws, and restrictions on protests near houses of worship.

Andrea Stewart-Cousins

The Democratic Leader of the New York State Senate, who has acknowledged 'incremental progress' in the budget talks but said a final deal is unlikely by the original April 1 deadline.

Michael Gianaris

The Deputy Senate Democratic Leader, who has exchanged barbs with Hochul's team over the pace of budget negotiations.

Zohran Mamdani

The New York City Council member who has claimed the city faces a $5.4 billion budget deficit and is pushing for more state funding.

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What they’re saying

“I think we're all negotiating in good faith.”

— Andrea Stewart-Cousins, Senate Democratic Leader

“The pied-a-terre is something that we'd considered and pushed our house before.”

— Andrea Stewart-Cousins, Senate Democratic Leader

“I believe I have the right to protect people's constitutional right to freedom of religion so if that has to be tested in court, bring it on.”

— Kathy Hochul, Governor of New York

What’s next

The state legislature is set to vote again on Thursday, April 17, 2026 on another stopgap spending measure to keep state workers paid, though the duration of this measure is unclear. Lawmakers will continue negotiating on the full $263 billion state budget package, with a goal of reaching a final deal in the coming weeks.

The takeaway

The ongoing budget standoff in New York highlights the political divides between Governor Hochul and the state legislature, particularly around high-profile issues like taxes, insurance reform, and protest restrictions. While incremental progress is being made, the inability to reach a deal by the original April 1 deadline underscores the challenges in finding compromise on these complex and contentious policy matters.