Mayor Zohran Mamdani released a $124.7 billion executive budget for Fiscal Year 2027 on Monday, announcing that the city has closed a deficit of more than $12 billion without raising property taxes, cutting services, or drawing down reserve funds. The budget raises new revenue through a first-ever pied-à-terre tax on non-resident-owned second homes valued above $5 million and a reduction in the Unincorporated Business Tax credit, measures the mayor framed as asking the wealthiest New Yorkers to contribute more to support city services.
“While you do not choose the deficit you inherit, you do choose how you respond to it,” Mamdani said at the Monday press conference. “We have balanced the budget, and we have done so without placing the burden on the backs of working New Yorkers.”
The pied-à-terre tax, secured in partnership with Governor Kathy Hochul, is projected to generate $500 million in annual revenue. The city also plans to work with City Council Speaker Julie Menin on reducing the Unincorporated Business Tax credit — which Sherif Soliman, director of the Mayor’s Office of Management and Budget, said primarily affects those with more than $1 million in income from pass-through entities — raising an additional $68 million annually. Both measures require state authorization before taking effect, and Soliman said implementation details on the pied-à-terre tax are still being finalized with state partners.
The FY27 executive budget is $2.3 billion less than the preliminary budget released in February. According to the mayor’s office, 92 percent of the $17.3 billion in new spending in fiscal years 2026 and 2027 addresses agency funding gaps and core operational needs rather than new programs. The administration attributes the underlying crisis to years of under-budgeting by the Adams administration, which the mayor said left more than $7.5 billion in expected costs across six major service areas unaccounted for.
To close the gap, the administration pursued what it described as three parallel tracks: a citywide savings initiative, a recalibrated financial relationship with Albany, and new revenue from wealthy property owners. On the savings side, the mayor said every city agency was required to appoint a chief savings officer and meet targets of 1.5 percent in FY26 and 2.5 percent in FY27. Together, agencies identified $1.47 billion in savings, alongside more than $300 million in vacancy reductions, through measures including procurement reform, technology modernization, and lease consolidation.
The budget also proposes restructuring the city’s pension liabilities to create level annual payments through 2037, which the administration projects will save $1.64 billion in FY27 alone. First Deputy Mayor Dean Fuleihan said the restructuring extends a 2010 state law designed to bring the city’s pension funding to 100 percent, converting a back-loaded payment schedule — which would have grown to roughly $6 billion before dropping to zero — into consistent annual contributions. Fuleihan said the city’s five pension systems are currently funded at 86 percent. The restructuring requires both state legislative approval and sign-off from each of the five retirement systems.
On the investment side, the budget allocates $122 million to hire 1,000 additional teachers in connection with the state’s class-size mandate, and adds $1.5 billion to the School Construction Authority’s five-year capital plan, bringing that total to $7.6 billion. Mamdani also said the administration is seeking an extension from Albany on the class-size compliance deadline, which he projected would generate approximately $500 million in savings in FY27 while allowing the city to implement what he described as a realistic timeline.
The budget stabilizes the CityFHEPS rental assistance voucher program — a lifeline for New Yorkers exiting the shelter system — which the mayor said has more than tripled in cost over the past three fiscal years. Soliman said the budget does not cut vouchers or create waiting lists but introduces management protocols including rent reasonableness checks and broker fee reductions. The administration projects $519 million in savings from these changes in FY27. The mayor acknowledged that litigation with the City Council over expanding the program is ongoing.
Building on a $1.2 billion state investment in free childcare for three-year-olds announced in the first week of the administration, the FY27 budget allocates $40 million in increased contract rates for childcare providers, whose reimbursement rates have not increased since 2021. The budget also includes $2.3 million for a childcare pilot program for municipal workers and $17.3 million to expand the NYC Reads and Solves literacy and math initiative.
On public safety, the budget invests more than $40 million annually in the new Office of Community Safety beginning in FY27, up from a prior-year level of $207 million that the mayor said would have represented a significant drop from $260 million. The budget also allocates $26 million for expanded hate crime prevention under the Office to Prevent Hate Crimes, which the administration said represents more than an 800 percent increase in funding for that office. An additional $9 million annually will fund new FDNY civilian staff. The capital plan includes $4 billion in additional HPD funds over five years for affordable housing and $5.6 billion total for NYCHA — which the administration described as the most city capital dedicated to NYCHA in recent decades — including $256 million for vacant unit turnover.
Public Advocate Jumaane Williams offered conditional support for the budget, praising the pied-à-terre tax as consistent with his longstanding call for the wealthiest New Yorkers to pay an equitable share. “The executive budget unveiled today reflects that work, and maintains strong city services,” Williams said in a statement, while urging the administration to go further on equity measures as Council negotiations continue. His office released a list of additional budget priorities and a Build-a-Budget tool for New Yorkers who want to weigh in before the final budget is adopted.
New York Communities for Change, one of the state’s largest community-based organizations, offered a more mixed assessment. “While this budget proposal falls short in some areas, it shows that it’s possible to balance the budget without balancing it on the backs of working people,” said Olivia Leirer, co-executive director of NYCC, in a statement. Leirer praised the administration’s investments in childcare and the workforce but said the $40 million childcare allocation leaves behind providers serving the city’s lowest-income children as well as more than 25,000 children currently on the waitlist for childcare assistance. NYCC also called on the administration to include a $10 million investment in a clean-heating program for low-income families — the #GasFreeNYC initiative — that the group argues would lower energy bills and create union jobs.
The City Council will now begin its own budget hearings and negotiations. A final budget must be adopted before the start of the fiscal year on July 1.
