TODAY, Mayor Zohran Kwame Mamdani provided an update on the City of New York's savings plan, as part of the City's effort to drive down the budget gap inherited from the former Administration.
"Government must deliver for working people - and every dollar in our budget must work as hard as they do. That's why I directed every agency to find real savings and cut waste to close our budget gap. This is just the beginning of our work to improve service delivery and make city government the most efficient it can be," said Mayor Mamdani.
Mayor Mamdani proposed a prudent, fiscally responsible preliminary budget that identifies aggressive saving measures and operational reforms. Years of underbudgeting, unfunded mandates and fiscal mismanagement under the prior Administration left New York City facing a massive deficit, described by City Comptroller Mark Levine as " the biggest budget gap since the Great Recession ." Prior to the last Administration, actual spending tended to exceed projections by approximately 3%; through the Adams Administration, underbudgeting averaged 10% .
In January, Mayor Mamdani signed Executive Order 12 , establishing a Chief Savings Officer (CSO) at every City agency to review performance, eliminate waste and streamline service delivery. Agencies were required to identify savings of 1.5% for Fiscal Year 2026 and 2.5% for Fiscal Year 2027. City agencies submitted their proposals on Friday, March 20, identifying more than $1.7 billion in savings. City Hall and the Mayor's Office of Management and Budget have begun reviewing these proposals for inclusion in the Executive Budget.
In this initial review, the Mamdani Administration has grouped savings into five categories: efficiencies in public services; contracting efficiencies; technology modernization; space consolidation and lease management; and financial adjustments and new revenue. The following highlights represent an initial list of approved items:
- Department of Correction: DOC will restructure and cancel certain IT and consultant contracts bringing services in house. This will save $4.3 million in FY26.
- Department of Finance: DOF will strengthen verification to ensure recipients qualify for a primary residence co-op abatement. This will save $13 million in FY27.
- Department of Health and Mental Hygiene: DOHMH will renegotiate its naloxone contract based on lower costs achieved in other states. This will save $1.15 million in FY27.
- Department of Sanitation: DSNY will vacate underutilized office space and relocate staff to space which is being upgraded to accommodate additional employees. This will save $194,000 in FY27.
- Department of Social Services: DSS will in-source nearly two-dozen IT contracts. This will save $597,000 in FY27. DSS is also maximizing revenue for WiFi provided in shelters by partnering with OTI to renegotiate contracts, which will lead to savings of $1.3 million in FY26 and $1.8 million in FY27. DSS is also terminating their contract with McKinsey, on which nearly $9 million was spent in FY26.
- Economic Development Corporation: EDC will in-source a marketing contract, saving $626,000 in FY27.
- Fire Department: FDNY has negotiated lower rates with telecommunications providers saving $700,000 in FY26 and $2.2 million in FY27. It will also begin billing Medicaid for "Treat No Transport" services following recent State and Federal approvals, saving $10.1 million in FY27.
- Health + Hospitals: H+H will negotiate contract rebates, reduce reliance on temporary staffing agencies through in-sourcing, cut overtime and improve revenue collection. This will save $14.1 million in FY26 and $25.7 million in FY27.
- Mayor's Office of Nonprofit Services: MONS will eliminate a consultant contract and in-source these services, saving $400,000 in FY26.
- NYC Aging: Aging will in-source a consultant contract, saving $411,000 in FY27.
- NYC Emergency Management: NYCEM will in-source a software maintenance contract. This will save approximately $63,000 in FY27. The agency will also transition certain software programs to a more cost-effective platform. This will save approximately $70,000 in FY27.
- New York City Public Schools: NYCPS will terminate underutilized contracts and implement spending caps, generating $30.3 million in savings in FY27. In addition, NYCPS will introduce controls on central office spending across supplies, equipment, professional development and travel, resulting in $27.5 million in savings in FY26.
- Mayor's Office of Management and Budget: OMB will reduce office lease costs, saving $90,000 in FY27.
- Office of Technology and Innovation: OTI will renegotiate its' technology contracts, eliminate duplicative hardware and software and right-size consultant agreements. These actions will save $1.3 million in FY 2026 and $1.2 million in FY 2027.
- Office of Labor Relations: OLR will conduct a full audit of dependent eligibility in employee health plans. Ineligible dependents will be removed from coverage. This is expected to save approximately $100 million in FY27.
- Taxi and Limousine Commission: TLC will cancel its Slack subscription, saving nearly $20,000 in FY27.
