New York City Mayor Zohran Mamdani reached an 11th-hour handshake deal Tuesday with the City Council on a $125.8 billion municipal budget that reduces a promised expansion of a rental assistance program.
The diluted expansion of the program for low-income residents runs counter to a campaign promise Mamdani made as a mayoral candidate last year, Politico reported.
Cityandstateny.com reported that the agreement brought a 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 City Council Speaker Julie 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.”
Cityandstateny.com reported that the budget passed the City Council at 8:07 p.m. Tuesday evening by a vote of 45-6, with the Council’s five Republican members voting against it, citing, among other things, a plan to increase the police department’s headcount falling out of the final deal.
One Democrat Voted No
Council Member Althea Stevens was the lone Democrat to vote no, citing a lack of investment in her Bronx district.
“It saddens me that I cannot tell my constituents that this budget fully meets the urgency of their needs,” she said.
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 their legal fight over the council’s 2023 laws to expand CityFHEPS, and support a new bill in their place, Cityandstateny.com.
The bill would create a new program expanding rental vouchers to some New Yorkers who were excluded from the existing program because they didn’t meet income requirements or because of the kind of shelter they reside in, Sanchez said.
“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.
Sought State Funding
In presenting his preliminary budget, Cityandstateny.com said that 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 website noted that pitch, intended to bolster Mamdani’s negotiating position and pressure Hochul to agree to his proposed tax hikes on the wealthy and major corporations, never really caught on. It said that most involved in the budget process never expected that Mamdani would actually touch property taxes, a political third rail.
Cityandstateny.com noted that Mamdani did 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%.
The agreement on the 2027 fiscal year budget was formalized Tuesday morning with a handshake at City Hall between Mamdani and Council Speaker Julie Menin. The ceremonial gesture took place just 15 hours before the budget was legally due — an unusually late deal that came together after at times tense negotiations between the two sides.
Later in the day, with less than four hours until the deadline, the Council passed the budget in a 46-6 vote. Five of the no votes came from Council Republicans furious with Mamdani for reversing the NYPD headcount boost. The other no vote came from Council member Althea Stevens, a Democrat who said she couldn’t back the budget because it didn’t allocate enough direct funding for her Bronx district.
A ‘Roadmap’ for Coming Years
“Above all else, this budget offers a roadmap for the years to come,” Mamdani said in the City Hall Rotunda after the handshake with Menin. “This is only the first budget of our administration. Many more will follow, and 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 every single day.”
In June,, Mamdani said he plans to oversee the construction of 200,000 affordable homes across the five boroughs, a major undertaking that will require new builds, hotel, and office building conversions, and widespread rezoning.
Business Insider reported that to control costs and limit red tape, his administration is encouraging new development on existing public land, such as converting libraries into mixed-use buildings or building on unused parking lots.
If the plan is successful, Business Insider said that a supply boom could help lower-income New Yorkers access housing and put downward pressure on overall prices.
