New York City Mayor Zohran Mamdani and City Council Speaker Julie Menin finalized a roughly $125 billion budget for the upcoming fiscal year, reaching a handshake agreement just before the July 1 deadline. The deal notably excludes an expansion of the NYPD's headcount, a point of contention that had nearly derailed negotiations.
The agreement includes the establishment of a new rental assistance program designed to aid New Yorkers facing eviction or residing in shelters who do not qualify for the existing City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) program. The Mamdani administration has also committed to dropping its appeal of a lawsuit filed by the City Council, which challenged former Mayor Eric Adams' veto of reforms to housing voucher programs that were overridden in 2024.
"Every New Yorker deserves a safe, affordable home, and this agreement will help more families avoid eviction and homelessness," Speaker Menin stated. "Our historic announcement includes the administration dropping their lawsuit against the Council and a new bill which addresses some of the fiscal concerns. Housing vouchers are a smart investment that save taxpayers money by preventing homelessness before it happens."
The final spending plan is expected to closely mirror Mayor Mamdani's May executive budget proposal of $124.7 billion, with increased allocations for City Council members. However, it omits the proposed increase of 580 officers for the NYPD, a move that aligns with the mayor's campaign promise to freeze police staffing levels and appeases activists who had protested the expansion.
Mamdani's administration had initially signaled support for expanding the NYPD's ranks from 33,861 to 35,370 for fiscal year 2027, a position that had gained traction with City Council leadership. Nevertheless, faced with protests from approximately 50 elected officials and advocates, including the local chapter of the Democratic Socialists of America, Mamdani ultimately sided with opponents of the expansion.
Budget Details and Financial Context
The Department of Education is projected to receive the largest share of funding, with $37.9 billion allocated in the executive budget. Other significant outlays include $14.6 billion for the Department of Social Services and $6.59 billion for the NYPD.
Mamdani took office facing an anticipated budget shortfall, initially estimated at $12 billion by his administration and later revised to $5.4 billion. He attributed this fiscal gap to his predecessor, Eric Adams, and suggested potential solutions such as taxing the wealthy or raising property taxes by nearly 10%. Critics viewed the tax proposals as a tactic to push for wealth taxes through the state legislature.
Governor Kathy Hochul provided approximately $4 billion in financial measures to address the city's budget gap. Additionally, a pied-à-terre tax on luxury second homes, championed by Hochul and Mamdani, was projected to generate $500 million annually. However, City Comptroller Mark Levine estimated the revenue to be closer to $200 million per year.