Findings suggest the City can avoid tapping the Rainy Day Fund
Separate Council forecast shows relatively stronger revenue outlook than the Office of Management and Budget for FY 26 & 27
Speaker Julie Menin and Finance Chair Linda Lee released the New York City Council’s March 2026 Economic and Tax Revenue Forecast, alongside an initial analysis identifying nearly $1.7 billion in potential savings and additional revenue for Fiscal Year (FY) 2026, which ends June 30.
The Council’s analysis suggests the City can maintain fiscal discipline and protect critical services without drawing down New York City’s Rainy Day Fund (formally the Revenue Stabilization Fund). In its Preliminary Budget released in February, the Administration of Mayor Zohran Mamdani proposed utilizing nearly $1 billion from the fund in the current fiscal year.
The proposed drawdown of the Rainy Day Fund would lead to a vote by the Council by the end of March through a Revenue and Expense Modification to the FY 2026 budget sent by the Administration on February 24.
The Rainy Day Fund was created in 2021 by the Administration of Mayor Bill de Blasio. Since its launch, it has gradually climbed to $2 billion and has never been drawn down, even during the recent migrant funding crisis.
Among the resources identified in the Council’s preliminary analysis, beyond current projections from the Office of Management and Budget (OMB), are nearly $1.4 billion from debt service adjustments, realization of accrual savings from unfilled agency vacancies, and unrecognized interest earnings from entities such as the Retirees Health Benefits Trust and cash holdings.
“The Rainy Day Fund was created to help protect New Yorkers during a true fiscal emergency, and has never been tapped,” said Speaker Julie Menin. “Our analysis suggests we are not in such an emergency position today. The Council believes there are additional savings and revenue opportunities that can be identified through the budget hearing process, both for FY 2026 and 2027, and we will continue working with the Administration to ensure the City’s finances remain strong while protecting this critical safeguard.”
The Council’s March economic forecast estimates $386 million more in tax revenue than projected by the Mayor’s OMB for fiscal years 2026 and 2027, reflecting a stronger long-term outlook for the City’s finances. That difference excludes any increase to the City’s overall property tax rate.
The forecast projects the City’s tax revenues will continue to grow at an average of 4.7 percent annually from FY 2026 through FY 2030, which is lower than the 5.5 percent annual average tax revenue growth experienced over the decade of FY 2010 to FY 2019.
The full economic forecast report can be found here.
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