NYC Mayor Mamdani Releases FY2027 Preliminary Budget to Close $12B Gap

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CLASS WARFARE - Raise Taxes on Wealthy or Property Taxes for Middle Class will Skyrocket, Mayor Says

 Mayor Zohran Kwame Mamdani releases the Fiscal Year (FY) 2027 Preliminary Budget. City Hall. Tuesday, February 17, 2026. - Photo by Ed Reed/Mayoral Photography Office.



By Staff Reporter

Manhattan Voice

February 17, 2026

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NEW YORK, NY — Mayor Zohran Mamdani today released New York City’s Fiscal Year 2027 Preliminary Budget, outlining a sweeping plan to address what his administration describes as a $12 billion inherited two-year New York City budget shortfall while, as he claims, protecting working- and middle-class New Yorkers from deeper tax burdens.


The $127 billion FY2027 Preliminary Budget presents two sharply defined fiscal paths to close New York City’s budget deficit: adopt recurring revenue measures targeting high-income earners and the most profitable corporations, or rely on property tax increases and the drawdown of city reserves to meet the City’s legally mandated balanced budget requirement.



NYC FY2027 Preliminary Budget: Two Paths to Close a $12 Billion Budget Gap


Upon taking office, the Mamdani Administration reported uncovering under budgeted essential city services including rental assistance, shelter operations, and special education funding gaps. These funding gaps expanded projected deficits in the November 2025 Financial Plan Update to approximately $12 billion across Fiscal Years 2026 and 2027.



“There are two paths to bridge the city’s inherited budget gap,” Mayor Mamdani said in announcing the proposal. “The first path is the most sustainable and fairest: raising taxes on the wealthiest and corporations and fixing the imbalance between what the City provides the State and what we receive in return.”


The administration argues that without progressive revenue authority, the alternative would disproportionately impact homeowners and working families.


Executive Order 12 and $1.77 Billion in Recurring Savings


To stabilize city finances, Mayor Mamdani signed Executive Order 12, requiring each city agency to appoint a Chief Savings Officer (CSO) tasked with identifying recurring efficiencies and cost reductions.


The administration projects these savings initiatives will generate $1.77 billion in recurring budget savings across FY2026 and FY2027.


Additional financial adjustments include:


  • A $7.3 billion upward revision in New York City tax revenue forecasts



  • $97 million in additional Foundation Aid


After these adjustments, the City still faces a remaining $5.4 billion two-year structural budget gap.


Proposal to Increase Taxes on Millionaires and Profitable Corporations in NYC


Mayor Mamdani’s preferred solution includes:


  • Increasing personal income taxes on New Yorkers earning more than $1 million annually


  • Raising taxes on the most profitable corporations operating in New York City



The mayor framed this approach as a structural and sustainable solution to close New York City’s recurring budget deficit without property tax hikes on working families.




Property Tax Increase and Use of Reserves If Revenue Authority Is Denied


Absent state approval for new revenue measures, the FY2027 Preliminary Budget assumes:


  • A 9.5 percent New York City property tax rate increase generating $3.7 billion in FY2027



  • Use of $229 million from the Retiree Health Benefit Trust in FY2027


City officials emphasized that reserve usage is limited and that over reliance could weaken New York City’s long-term fiscal stability and bond rating outlook.





$14 Billion in Agency Expense Adjustments: Filling Under budgeted Needs


Across FY2026 and FY2027, the Preliminary Budget includes $14 billion in city-funded agency expense adjustments across two fiscal years. According to City Hall, the majority fills previously under budgeted essential services.




Approximately 4 percent — $576 million — supports targeted investments, including:


  • $100 million in FY2026 for expanded New York City snow removal operations funding


  • $5 million for warming centers and shelter connections for homeless New Yorkers during extreme winter weather


  • $11.9 million in FY2027 for Street Health Outreach & Wellness (SHOW) mobile units for severe mental illness response and a new Bridge to Home site


  • $5.3 million in FY2026 and $38 million in FY2027 to hire 200 new city attorneys and 100 support staff to reduce municipal tort liability and advance housing affordability efforts


  • $54 million in FY2027 to more than triple baseline funding for HRA’s Community Food Connection program serving food-insecure New Yorkers



$113 Billion Five-Year Capital Plan Focused on Affordable Housing and Mental Health Infrastructure


The Preliminary Five-Year Capital Plan totals $113 billion in all-funds New York City capital investment over five years. Major allocations include:


  • $662 million in FY2027 to modernize and preserve more than 3,200 affordable housing units in New York City


  • $48.2 million beginning in FY2027 to fully fund the renovation and expansion of the Adult Comprehensive Psychiatric Emergency Program at Bellevue Hospital


City officials say these capital investments are designed to address New York City affordable housing preservation and emergency psychiatric care infrastructure expansion while maintaining fiscal discipline.


Legal Requirement to Adopt a Balanced New York City Budget


Under New York law, New York City must adopt a balanced budget each fiscal year. The administration argues that without recurring revenue from higher-income taxpayers and corporations, balancing the FY2027 budget will require deeper reliance on property taxes and fiscal reserves.


The City Council will now review the Preliminary Budget in a series of hearings before negotiations culminate in an adopted budget ahead of the new fiscal year.


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