NYC Comptroller Lander Presents Analysis of New York City’s FY 2026 Adopted Budget to Financial Control Board
New York, NY — At the annual meeting of the New York State Financial Control Board, New York City Comptroller Brad Lander presented his office’s comprehensive analysis on New York City’s Fiscal Year (FY) 2026 Adopted Budget.
The Comptroller’s remarks, as prepared:
“Good morning. I’m honored once again to join Governor Hochul, Mayor Adams, Comptroller DiNapoli, former Comptroller Bill Thompson, former First Deputy Mayor and Budget Director Dean Fuleihan, and former Deputy Comptroller for Public Finance Marjorie Henning. Thank you for the opportunity to speak today, as we both mark the 50th anniversary of New York City’s fiscal crisis and stand at another pivotal moment for the City’s financial future.
The 50th Anniversary of the Financial Emergency Act and the Creation of the Financial Control Board
Fifty years ago, New York City faced a near-collapse of its finances, saved through decisive action by key stakeholders, including through the creation of the Financial Control Board under the Financial Emergency Act of 1975. The fiscal crisis ushered in a new era of fiscal discipline, transparency, and accountability — principles that remain indispensable today.
I want to recognize and applaud the legislation passed earlier this year that extends the Financial Emergency Act through at least 2035. This is an important recommitment to the foundational principles that have safeguarded New York City’s fiscal health for the past half-century. But we cannot stop there. My office has proposed a comprehensive update to the City’s fiscal framework — one that includes making the Financial Emergency Act permanent, and institutionalizing requirements for rainy day fund deposits and long-term efficiency planning. I urge the Governor and the Mayor to support these reforms, and also to appoint an Executive Director to the Financial Control Board. The stakes are too high for the FCB to remain without permanent leadership.
The frameworks adopted in the aftermath of that crisis — including balanced budgets and multi-year planning — are the foundation that have allowed the City to navigate economic downturns, national policy shifts, and global recessions with stability and integrity. With this foundation, the City has weathered 9/11, the Great Financial Crisis, Superstorm Sandy, and, most recently, Covid-19. The city has emerged with more private-sector jobs than prior to the pandemic. While there are certainly still very real challenges in the shift to remote and hybrid work, commercial office vacancies, and ongoing issues like housing affordability that threaten the city’s growth and thriving, a year ago, the city looked well poised for a strong emergence from the pandemic.
Today’s Risks are Largely Coming From Washington
Unfortunately, the fiscal and economic policies of the Trump Administration pose very real risks for New York City. Just this week, the City indicated that it would need to pick up the cost of housing subsidies following the federal government’s cuts to 7,700 emergency housing vouchers held by New Yorkers. Cuts to Medicaid, SNAP, and other key programs in the budget reconciliation bill risk having grave impacts. The mandatory spending cuts in the reconciliation bill could be augmented by proposed reductions to discretionary spending outlined in the Trump Administration’s FY 2026 Budget Request to Congress, as well as through the Administration’s numerous unilateral attempts to terminate, pause, and rescind many Federal grants already awarded (including the $80 million from the FEMA Shelter and Services program which was approved, paid, and then clawed back, and is still in litigation).
The Trump Administration has also added restrictive language to contract renewals to reflect terms imposed by executive orders and policy changes, and is expected to release new guidance for Federal audits, particularly the annual Single Audit. Both could impact future Federal funding.
Simultaneously, the Trump Administration’s immigration and trade policies threaten to worsen the U.S. and New York City economies. The Office of the New York City Comptroller projects slow economic growth over the next year nationally and for the city, with the possibility of a mild recession on the horizon, depending on the length and depth of Trump’s tariffs.
Failing to Plan in the Face of Known Risks
Unfortunately, despite those risks looming on the horizon, some of the critical lessons learned 50 years ago are not reflected in the Adams Administration’s FY 2026 Adopted Budget. The budget — totaling $115.91 billion — added nothing to the Rainy Day Fund, even though current long-term reserves are around half of what would be needed for an average recession, and includes no increase to the City’s general reserve, despite clear and present threats of cuts from Washington.
Instead of planning for uncertainty, the Adams Administration has continued the opaque fiscal practice of underbudgeting of key services like shelter, special education, rental assistance, and overtime. Our estimates suggest that the June Financial Plan underestimates expenditures by $5.15 billion annually. That is not fiscal discipline — it is fiscal denial.
Our models show that even under conditions without a recession, we face a $4.2 billion budget gap in FY 2026, growing to nearly $10 billion by FY 2028. If a mild recession occurs those gaps increase even further.
And yet, the Administration has failed to make a deposit into the Rainy Day fund or increase the general reserve, did not adopt a savings plan, rejected calls for regular efficiency reviews, and continued to pass budgets that avoid confronting long-term liabilities. Meanwhile, costs related to health insurance, class size mandates, early childhood education, and rental assistance programs are rising. The failure to plan for these is a disservice to New Yorkers who rely on public services and to future administrations who will inherit these deficits.
It is time to reaffirm the values of the Financial Emergency Act — not only in ceremony, but in action. We must restore responsible governance by:
- Instituting a formal Rainy Day Fund policy and adhering to it;
- Launching a rolling program of efficiency and savings planning;
- Honestly budgeting for known obligations;
- Refusing to let short-term thinking compromise long-term stability.
Stewardship of Pension Assets and a Vision for Equitable Growth
One bright spot this year is the 10.3% return on pension investments in FY 2025, which will save the City over $2.18 billion over the next five years. Our responsible investment strategies, like the purchase of the mortgages on the 35,000 units of rent-stabilized and rental housing put at risk when Signature Bank failed, contributed to positive returns and enhanced portfolio value and resilience.
In 1975, the State stepped in to ensure that New York City would not sacrifice long-term solvency for short-term expediency. Fifty years later, we must honor that promise — not with slogans — but with structure, transparency, and a commitment to the future.
Thank you.”
Read the Comptroller’s comprehensive analysis on New York City’s Fiscal Year (FY) 2026 Adopted Budget.
###