Mayor Zohran Mamdani’s first budget was set to come down to the wire on Monday as his administration remained stuck in a fight with the City Council over the expansion of a rental assistance program.
The city is legally required to pass its annual budget by the start of the new fiscal year at 12:01 a.m. on July 1, and the two sides were deadlocked as they raced to reach a deal the day before the deadline.
Over the weekend, many City Council members engaged in a social media blitz urging the mayor to commit more money to expand the CityFHEPS program, something he supported during his campaign last year but now says is too expensive.
Mamdani is riding a political high, fresh off a promised rent freeze and big wins by candidates he endorsed in last week’s Democratic primary wins that showed his sway in the city.
But as of Monday afternoon, that influence wasn’t enough to get the Council to back down on the demand to expand the rental voucher program. Council Speaker Julie Menin called it a “priority” for the budget. Mamdani is also facing pressure to expand the program from councilmembers like Tiffany Cabán and Alexa Avilés, fellow members of the Democratic Socialists of America.
“We are working around the clock to deliver a budget agreement that is fiscally responsible and puts our city on a path of long-term stability,” said Mamdani spokesperson Matt Rauschenbach. “The mayor believes in CityFHEPS and keeping New Yorkers stably housed, which is precisely why we are pursuing major reforms to the program.”
The standoff is the final chapter in a rollercoaster budget ride dating back to January, when Mamdani projected the city would face a $5.4 billion budget deficit in the upcoming fiscal year.
The mayor managed to close the gap without major austerity cuts — and expand free childcare for 2-year-olds — due to $1.2 billion in aid from the state as well as an agreement to delay payments into four municipal pensions. He also avoided raising property taxes to close the gap, though state lawmakers signed off on a pied-a-terre tax that places levies on high value non-primary residences in the city.
The campaign to expand rental vouchers, a program used by more than 26,000 people to move out of shelter last year, was initially led by progressive councilmembers. Menin, who has acted as a sort of foil to Mamdani this year, did not initially identify rental vouchers as a priority. But on Friday, she demanded $300 million in additional funding.
The impasse risks a late budget. Ana Champeny, a vice president for research at the Citizens Budget Commission, a fiscal watchdog group, said missing the deadline by a day or two would not be catastrophic. If a budget is not reached by the deadline, the city would continue to follow spending levels set under the previous year. Any surplus revenue will be directed into the rainy day fund, a safety net reserve fund set aside for unexpected economic downturns, she said.
City Comptroller Mark Levine on Monday urged the mayor and Council to reach a deal “as soon as possible to prevent the potential downsides of a late budget.”
But Levine also expressed concern about growing budget deficits in future years.
“This program plays a vital role in helping New Yorkers leave shelter and remain stably housed,” he said in a statement. “It must be structured and funded in a way that is sustainable over the long term — otherwise we risk putting this and other vital programs we are fighting to protect today in future jeopardy.”
The city’s budgets have passed close to the deadline each of the past three years. And in 2020 the City Council passed a last-minute budget just after midnight on July 1 after lawmakers debated funding cuts for the NYPD amid a national reckoning over police brutality following the killing of George Floyd.
