Mamdani, Menin shake on $126B NYC budget

New York City Mayor Zohran Mamdani and City Council Speaker Julie Menin shook hands on a $125.8 billion budget for the upcoming fiscal year Tuesday morning, bringing a blitz of contentious final hour negotiations to a close mere hours before the July 1 deadline.

“This budget offers a road map, though it is only the first budget of our administration, and more will follow,” Mamdani said, joining Menin and the council members in the City Hall rotunda.  “(But) every budget that follows will build on the principles established here: honest budgeting, fiscal discipline, transparent government and an unwavering belief that working people deserve a City Hall that delivers for them.”

Work to hash out a budget deal ran into the 11th hour with both sides fighting well into Monday to finalize an agreement around a popular rental assistance voucher program known as CityFHEPS. Despite not initially prioritizing funding to expand the program, the City Council mounted an all-out last-minute push to get Mamdani to expand CityFHEPS in next year’s budget. 

Still at an impasse on Friday, City Council Speaker Julie Menin canceled the ceremonial handshake. Tensions flared over the weekend and into Monday as a broad swath of council members fired off tweets pressuring the mayor to fund the program – and thus comply with the package of laws passed by the City Council in 2023. Those laws, which would have significantly increased eligibility for the program, have been tied up in litigation for years after the Eric Adams administration refused to implement them due to their high cost. While Mamdani initially promised as a candidate to drop the lawsuit and expand the program, he pivoted upon taking office. 

The City Council dug its heels in for an expansion of the program in the final stretch of budget negotiations, putting Mamdani in a tough position. The lefty mayor suddenly looked like he was standing in the way of expanding the kind of social welfare program he should theoretically support, while the more moderate Menin held the line on expansion. (Council Member Pierina Sanchez and the council’s Progressive Caucus were also leading the charge in the final negotiations, with some members saying they’d vote against the budget barring a satisfactory expansion.)

In the end, the budget deal includes $175 million in new funding for the rental vouchers in fiscal year 2027, with $125 million baselined in future years, and $50 million of it coming from the City Council this year. That’s short of the at least $200 million council leadership was pushing for, but it includes a deal for the Mamdani administration to drop the lawsuit over the council's 2023 laws to expand CityFHEPS, and support a new bill in their place – to be passed Tuesday – aimed at expanding the program’s income eligibility threshold and expanding it to people living in non-Department of Homeless Services shelters or to people displaced by fire or vacate orders. 

“This agreement delivers a humane and fiscally responsible path forward by expanding access to rental assistance, establishing cost controls, and ending years of litigation,” Menin said in a statement. 

Mamdani’s first budget has not been without drama. Just a few weeks into office, the new mayor laid the narrative groundwork for his first budget with a press conference recapping how the city came to face a $12 billion budget gap. (It was Adams and Andrew Cuomo’s fault, he said.)

Then in presenting his preliminary budget, Mamdani set out a controversial ultimatum for Gov. Kathy Hochul: tax the rich or force the city to raise property taxes and drain budget reserves. The pitch, meant to bolster Mamdani’s negotiating position and pressure Hochul to assent to his proposed tax hikes on the wealthy and major corporations, never really caught on. Most involved in the budget process never expected that Mamdani would actually touch property taxes, a political third rail.

Mamdani did, however, succeed in getting a substantial amount of funding from Hochul to help close the budget gap, presenting a $124.7 billion executive budget in May that didn’t resort to his threatened property tax hike or raided reserves.

Outside of CityFHEPS, the adopted budget agreement also includes an additional $54 million in baselined funding for Fair Fares, the discounted transit program, increasing income eligibility to those earning 200% of the federal poverty level up from 150%.

An increase to the New York City Police Department’s headcount was one of the things not included in the final budget agreement – a pivot from Mamdani’s initial proposal to grow the force by 580 police officers. While the prospect garnered a wave of criticism from the mayor’s base, even invoking a rare rebuke from the New York City chapter of the Democratic Socialists of America, Mamdani attributed the reversal to him and Police Commissioner Jessica Tisch finding ways to keep the NYPD’s original headcount “while also meeting all of our crimefighting needs.” News of the reversal was first reported by the New York Post. 

The City Council is expected to approve the budget before the end of the day Tuesday, which is an unusually tight turnaround from the ceremonial handshake. A spokesperson for the City Council speaker’s office warned that the vote could go “quite late.” 

This is a developing story that will be updated.