NEW YORK - TODAY, Mayor Zohran Kwame Mamdani released the Fiscal Year (FY) 2027 Preliminary Budget , outlining the scope of a fiscal crisis inherited from the prior Administration and presenting two clear paths forward: raise revenue from the wealthiest New Yorkers and most profitable corporations and end the drain of City resources to the State - or balance the budget on the backs of working and middle class New Yorkers.
"There are two paths to bridge the city's inherited budget gap. The first path is the most sustainable and fairest: raising taxes on the wealthiest and corporations, and ending the drain by fixing the imbalance between what the City provides the State and what we receive in return," said Mayor Zohran Kwame Mamdani. "If we do not go down the first path, the City will be forced to go down a second, more harmful path of property taxes and raiding our reserves - weakening our long-term fiscal footing and placing the onus for resolving this crisis on the backs of working and middle-class New Yorkers. We do not want to have to turn to such drastic measures to balance our budget. But, faced with no other choice, we will be forced to."
Upon taking office, the Mamdani Administration identified a pattern of underbudgeted essential services, including rental assistance, shelter operations and special education - that widened projected gaps stated in the November 2025 Financial Plan Update to roughly $12 billion across FY 2026 and FY 2027. To restore transparency and stability, the Mamdani Administration launched aggressive new savings initiatives, maximized the use of in-year reserves and incorporated updated revenues. Through Executive Order 12, Mayor Mamdani is requiring every city agency to designate a Chief Savings Officer (CSO) to identify recurring efficiencies. These savings initiatives are projected to save $1.77 billion across the two fiscal years.
After applying savings, revenue adjustments driven by an upward revision of $7.3 billion in tax revenue, and State support - including $1.5 billion in from Governor Kathy Hochul and an additional $97 million in Foundation Aid - the City faced a remaining two-year gap of $5.4 billion. The Mamdani Administration's preferred solution is recurring revenue: increasing personal income taxes on New Yorkers earning more than $1 million annually and raising taxes on the most profitable corporations, while recalibrating the City's long-imbalanced fiscal relationship with the State.
Absent new revenue authority, the City will be forced to use the only tools currently available to increase revenue and fill this gap: property taxes and the use of reserves. The $127 billion FY 2027 Preliminary Budget assumes a 9.5 percent property tax rate increase - generating $3.7 billion in FY 2027. The City also applied $980 million from the city's Rainy Day Reserve Fund in FY 2026 and $229 million from the Retiree Health Benefit Trust in FY 2027 in order to balance the budget as legally required.
Of $14 billion in city-funded agency expense changes across the two fiscal years, the vast majority fills underbudgeted needs. Roughly 4 percent - $576 million - supports targeted investments, including: $100 million in FY 2026 for snow removal; $5 million in FY 2026 for warming centers and shelter connections for homeless New Yorkers; $11.9 million in FY 2027 for new Street Health Outreach & Wellness (SHOW) mobile units and a new Bridge to Home site for people living with severe mental illness; $5.3 million in FY 2026 and $38 million in FY27 for 200 new attorneys and 100 support staff to reduce tort liability and advance affordability efforts; and more than tripling baseline funding for HRA's Community Food Connection program with an addition of $54 million in FY 2027. The Preliminary Five-Year Capital Plan totals $113 billion in all-funds and includes $662 million in FY 2027 to modernize and preserve more than 3,200 affordable housing units and $48.2 million starting in FY 2027 to fully fund the renovation and expansion of Bellevue's Adult Comprehensive Psychiatric Emergency Program.
