The Metropolis Council stated on Wednesday that it has recognized roughly $6 billion in further sources to fill an enormous finances deficit — countering Mayor Zohran Mamdani’s preliminary finances plan with out elevating property taxes, chopping companies or dipping into town’s wet day fund.
The April 1 launch of the Council’s response marks the following part of negotiations over town’s spending plan for fiscal years 2026 and 2027, as Metropolis Corridor and lawmakers now work towards a ultimate finances deal by the tip of June.
Speaker Julie Menin, throughout a Wednesday morning press convention, stated the Council’s finances would shut what it describes as a roughly $6 billion funding shortfall, together with about $1.1 billion in Council priorities that had been funded final 12 months however not baselined within the mayor’s preliminary finances.
“Our plan outlines a viable path forward,” Menin stated, “one that closes the shortfall without raising property taxes, without cutting critical services, and without drawing down the rainy day fund.”
In a rebuttal of the Council’s plan, Mayor Mamdani claimed the council’s preliminary finances proposal “would result in slashing billions of dollars from agency budgets, which would force the City to cut services.”
“Double-counting previously identified savings, overestimating revenues, and exaggerating debt service savings does nothing to close a deficit,” the mayor stated.
Council takes one other path in closing finances gap
Within the mayor’s presentation, the administration stated it inherited a a lot bigger structural downside than beforehand marketed — a niche that grew to roughly $12 billion throughout fiscal years 2026 and 2027 after accounting for underbudgeted wants equivalent to rental help, shelter operations, and particular schooling.
After company financial savings, greater income projections and promised state help, the administration stated it was nonetheless left with a $5.4 billion gap.
Mamdani forged the finances combat as two paths: his most popular route of elevating taxes on New Yorkers incomes greater than $1 million and on extremely worthwhile firms, whereas additionally “ending the drain” of metropolis sources to the state, or a second path of final resort — a 9.5% property tax improve and reserve drawdowns. The preliminary finances assumes the latter if Albany doesn’t authorize new income instruments, together with a property tax hike projected to boost $3.7 billion in FY 2027, a $980 million draw from the Wet Day Fund in FY 2026 and a $229 million draw from the Retiree Well being Advantages Belief in FY 2027.
The Council’s response rejects that route. Menin stated lawmakers are a “hard no” on each the property tax improve and any raid on reserves, arguing town can shut the hole via “savings efficiencies and more accurate revenue and cost assumptions.” On the similar time, she stated Albany ought to hold “all options” on the desk.
On the podium, Menin stated, “I absolutely believe in progressive taxation,” however added that she didn’t need New York “pitting states against each other,” stopping in need of backing Mamdani’s most popular route for Albany lawmakers.
The Council’s written response goes additional on one main city-specific tax proposal shifting via Albany: lowering the New York Metropolis Move-By way of Entity Tax credit score to 75%. The Council says the Meeting and Senate one-house payments embody that proposal and estimate it might elevate about $1.02 billion throughout fiscal years 2026 and 2027.
The identical part notes that roughly 95% of the PTET credit score now goes to filers with adjusted gross revenue above $1 million.
Picture by Lloyd Mitchell
The Council’s report additionally warns that Mamdani’s backup plan might weaken town’s funds. In keeping with the doc, town’s reserve cushion would fall from slightly below $11 billion on the finish of fiscal 12 months 2025 to $6.5 billion on the finish of fiscal 12 months 2026, or 5.3% of metropolis spending — beneath the 7.5% threshold Fitch has recognized as a doable downgrade set off. The Council says that would add greater than $3 billion in borrowing prices to town’s capital plan.
The mayor’s finances argues that these reserve and property-tax strikes should not what Metropolis Corridor needs to do, however what it might be pressured to do with out new authority from Albany. The Council, in contrast, argues these steps are pointless.
Its various plan says it may well generate $6.033 billion over two years, together with $3.482 billion from re-estimates, $2.022 billion from efficiencies and financial savings and $529 million from income enhancements. Menin highlighted a number of examples on Wednesday, together with $80 million from greater Division of Buildings allow and late-fee income, $860 million from unspent wage accruals tied to budgeted however unfilled positions, $42 million in Port Authority rental income, and $175 million from tighter oversight and aggressive bidding of Division of Schooling contracts.
Council officers harassed that these financial savings wouldn’t come from layoffs or service cuts. “We’re not calling for the elimination of any of the vacancies,” Menin stated. “We strongly believe those positions should be filled.”
The Council additionally says Mamdani’s preliminary finances leaves out greater than $1.1 billion in priorities that had been funded within the present 12 months, together with $30 million for cultural establishments, $30.7 million for town’s three library methods, $16.9 million for housing and home violence-related authorized companies, $5 million for scholar psychological well being help and $7.8 million for CUNY Reconnect.
Lawmakers are additionally utilizing the finances response to put down markers for the approaching talks: increasing Truthful Fares so buses and subways could be free for New Yorkers incomes as much as at the very least 150% of the federal poverty degree, rising NYC Youngsters RISE and elevating pay for paraprofessionals.
The Council’s new Finance Director Nathan TothPhoto by Lloyd Mitchell
Albany nonetheless hangs over all of it. Menin stated the longer state finances negotiations drag on, the extra uncertainty they create for town, whilst she insisted lawmakers within the capital must be contemplating each possibility.
Mamdani argued that the Council finances does little to deal with town’s deeper monetary challenges.
“This $6 billion proposal asks Albany for just one action – class size mandate relief. It refuses to address the deeper structural imbalance between the City and the State, or to increase taxes on the wealthiest New Yorkers and most profitable corporations. It effectively ensures this structural deficit will continue indefinitely,” he stated. “Any proposal that claims we can close this gap without significant new revenue is unrealistic.”
The Council then countered the mayor on X, saying that “Despite these untrue accusations, the Council stands ready to negotiate a budget that delivers and maintains critical services for New Yorkers.”
Transferring ahead, the Council is asking Metropolis Corridor to nominate a citywide Chief Financial savings Officer to establish focused long-term financial savings, create a Tax Expenditure Chief Financial savings Officer to evaluation outdated or inefficient tax breaks, and work with the Council on clearer guidelines for the way town ought to use and replenish its reserves in future finances cycles.
