Testimony of New York City Comptroller Mark Levine Before the Charter Revision Commission on Government Efficiency (COGE)

Chair Gaspard and members of the Commission, thank you for the work you have undertaken and for the opportunity to testify. Last month, I testified regarding adopting clear rules for the Revenue Stabilization Fund, commonly known as the Rainy Day Fund. I was excited to see the topic included in this Commission’s Preliminary Report, and in particular am grateful that this board appreciates the need for ensuring there is a clear target and deposit rules.

Today in my I want to focus today on some of the details of this proposal, and further explain how this Commission can preserve the budgetary flexibility the City requires while simultaneously putting in place the basic guardrails needed to make the fund work.

First and foremost, I want to be clear that  we are not proposing that rigid formulas or narrow economic triggers be written into the Charter. Instead, the Charter should set a target for the balance, require formula-based deposits, and define the framework for withdrawals. The specific rules—the deposit formula, the withdrawal cap and triggers—are instead defined by policy, jointly adopted by the Mayor, the Council, and the Comptroller. That structure and the subsequent policy that would be adopted would allow flexibility, adjustment, and refinement over time. This model shows that we can have objective, data‑driven criteria without handcuffing the City with rigid statutory language.

Beyond that overarching point, I’d point out a few key details regarding the reserve target, deposits and withdrawals.

The Commission has shown interest in a reserve target equal to the revenue shortfall of the first two years of a recession. We agree but believe this should be seen as a floor. The appropriate target should be the expected full revenue loss over the entire recession, or else the fund will fall short when the City needs it most.

Our deposit proposal is intentionally countercyclical. Deposits would occur during periods of economic strength. They would pause in downturns, and we do not recommend automatic replenishment rules that could force deposits at the worst possible moment. In other words, deposits would never compete with essential services.

Additionally, some have suggested conditioning deposits on “other immediate fiscal needs.” But the City will always have immediate needs. If this becomes the standard, required deposits will rarely—if ever—occur. The rainy‑day fund exists precisely to manage resources across time, not only within a single fiscal year.

Lastly, I wish to touch on withdrawal rules, which by my reading the Commission seems to have some reservation about. And this concern is understandable: the fund must be readily usable in moments of genuine distress. But the current framework is far too loose. The Mayor may withdraw up to 50% of the fund without certifying financial need, making the fund vulnerable to use as a routine budget‑balancing tool. That undermines the entire purpose of the rainy‑day fund.

Withdrawals should be allowed during recessions and major emergencies—events like 9/11, the 2008 recession, or the Covid‑19 pandemic—that are time-limited and have significant fiscal impacts. Clear, policy‑based withdrawal rules would protect the fund from misuse while ensuring it remains fully available when the City truly needs it.

Some have argued that because New York has built reserves in recent years, formal rules are unnecessary. But history shows the opposite. The rainy‑day fund has received only one deposit since its creation, despite extraordinary revenue growth. Without rules, political pressures make saving during good times extremely difficult. Rules do not limit flexibility—they protect it.

By adopting a professionally designed policy framework we can balance flexibility with discipline. And by embedding only the core requirements in the Charter, we ensure the rainy‑day fund is resilient, accountable, and adaptable.

This is how we protect New Yorkers—not just in the next downturn, but for the long term.

Thank you. I’m happy to answer any questions you may have.

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