Driven by stronger-than-expected collections in personal income and business taxes, stronger outlook enables City to fund major budget priorities for New Yorkers while bolstering reserves
The New York City Council on Tuesday released its June 2026 Economic and Tax Revenue Forecast, which estimates nearly $2 billion more in tax revenue for Fiscal Years (FY) 2026 and 2027 combined than projected by the Mayor’s Office of Management and Budget (OMB). The forecast, which estimates an additional $1.5 billion in collections in FY 2027 alone, was released on the second-to-last day of Executive Budget hearings for FY 2027 held by the Council. The updated forecast was driven by stronger-than-expected collections in personal income and business taxes, and represents an improved outlook compared to the last forecast issued in March.
The Council expects tax revenue to grow at an average rate of 4.3% annually through FY 2030, a projection that is higher than its previous forecast and OMB’s expectations. Robust aggregate wage growth, higher Wall Street bonuses along with capital gains realization, and recent economic and collections data contributed to the Council’s improved outlook. However, despite improvements, this growth is still lower than the 5.5% annual average tax revenue growth New York City experienced between FYs 2010 and 2019.
The Council’s forecast uses data from May and is more recent than OMB’s latest revenue estimates, which were based on data as of April. The full economic forecast report can be found here. The Council’s second-to-last Executive Budget hearing will be livestreamed here.
“From the beginning of the budget process, the Council has maintained a measured and consistent view of the City’s fiscal outlook, prioritizing the identification of savings, efficiencies and revenue generators as ways to bridge potential budget gaps,” said Speaker Julie Menin. “This updated forecast confirms the overall resilience of the city’s economy and provides an opportunity to more fully fund priorities that address the affordability crisis, improve quality of life, and support working families. Just as importantly, it allows us to continue building reserves and protecting the City’s long-term fiscal health. We can invest in New Yorkers today while planning responsibly for tomorrow.”
With nearly $2 billion in additional tax revenues projected over FYs 2026 and 2027, the Council believes there is sufficient revenue to set aside some of those funds into reserves, while responsibly funding its top budget priorities, including greater investments for college savings accounts through NYC Kids RISE, for the Department of Consumer and Worker Protection to support its expanded responsibilities, additional personnel to clean up and improve city parks, expanding the Fair Fares discount transit program, providing greater support to cultural institutions, and adding a fifth firefighter for dozens of engine companies. More funds for programs to financially support homeowners and provide services to help older adults through the Department for the Aging will also be sought. Recognizing greater than usual uncertainty in the economy, the Council is also calling for a meaningful portion of the nearly $2 billion to be set aside as the first deposit into the City’s Rainy Day reserves since 2021.
The Council’s tax revenue forecasts have consistently been closest to predicting the actual collections compared to OMB and other monitors, according to an analysis measuring the variance between pre-fiscal year revenue projections and actual collections at the close of each fiscal year. A prior analysis conducted by the City Comptroller’s office in 2024 had similar findings, showing the Council’s forecast with lowest variance, using a different methodology reviewing forecasters’ projections for FY 2024 revenues measured in early 2020 and early 2024.
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