By Trendsetter Tribune 
New York Governor Kathy Hochul (D) on Tuesday unveiled a $260 billion state budget, a plan that would introduce a hefty excise tax on nicotine products like Zyn while keeping personal income taxes unchanged.
Hochul emphasized fiscal responsibility in her address, rejecting calls from New York City Mayor Zohran Mamdani and other progressive leaders to raise taxes on high earners. “We already have high taxes and sufficient revenue to support the state’s priorities,” Hochul said. “Raising taxes for the sake of raising taxes is not justified.”
Nicotine Tax Proposal
A centerpiece of Hochul’s budget is a proposed 75% excise tax on tobacco-free nicotine pouches, including popular brands such as Zyn. The rate matches the current excise on cigarettes and other tobacco products, which is $5.35 per pack.
New York Budget Director Blake Washington defended the proposal, calling nicotine pouches a potential “gateway drug” and noting that taxing such products would provide resources for public health interventions. Zyn’s parent company, Philip Morris International, reported $1.88 billion in net revenue in 2024, with Forbes projecting U.S. sales for 2025 to exceed $2.9 billion.
Healthcare and Child Care Investments
Hochul’s budget would extend the 7.25% corporate tax rate on companies making over $5 million in profit for another three years, while raising Medicaid spending by 11.4%, totaling $38.2 billion.
Child care receives a major boost in the proposal, with $4.5 billion allocated statewide, including $210 million to expand pre-kindergarten access for four-year-olds. New York City would also benefit from a “2-Care” program offering preschool for two-year-olds, continuing the progressive push for universal early childhood education championed by Mayor Mamdani.
Political Tensions Ahead
Despite cooperation on child care initiatives, Hochul and Mamdani remain at odds over tax policy. Mamdani, a self-described democratic socialist, has pushed for taxing individuals earning more than $1 million annually to fund universal child care and other programs. Hochul has resisted this, citing sufficient state revenue and concerns over excessive taxation.
The Democratic-controlled state legislature will review Hochul’s $260 billion budget in the coming weeks. The governor faces a challenging reelection race this year, with Lt. Gov. Antonio Delgado set to challenge her in the Democratic primary in June before the general election.
Hochul began delivering her detailed budget address at 1 p.m. Tuesday, providing additional context on her proposals, which include public health measures, corporate taxation, and education investments.