New York City’s chief financial watchdog, Comptroller Mark Levine briefs the public on the City’s multi-billion dollar shortfall in Fiscal Year 2026 and the even larger $10 billion budget gap in FY27.
Budget Gap
Comptroller’s Restated Gaps ($B)
Comptroller’s Mid-Year Projected Gaps/Surpluses for FY 2019-2026 as of November Plans ($M)
Note: Includes allocation of budgeted reserves (General Reserve and Capital Stabilization Reserve).
In FY 2019 through FY 2023 this allocation was not included in published gap estimates but is included here for consistency.
Comptroller’s Upcoming-Year Projected Gaps for FYs 2020-2027 as of November Plans ($M)
Note: Gap estimates include previous year surplus roll, if applicable.
The Economy and Tax Revenues
The Economic Situation and Outlook
- The U.S. economy continued to grow in the second half of 2025, significantly lowering the likelihood that trade policy and other federal action will trigger a recession in 2026.
- The NYC economy is experiencing a persistent lack of growth in most industries, with health care still the notable exception.
- However, overall wage growth has been strong and tax revenues have been holding up.
- The outlook is for moderate-to-slow economic growth in NYC in 2026 and 2027, with higher-wage, office-using sectors resuming gradual expansion after a decline in 2025.
NYC Tax Revenues Continue to Grow
Expenditures
How Did This Happen?
- The last administration relied on one-time accounting measures to balance last year’s budget that will not be available this year.
- The prepayment coming into this year shrank for the third year in a row – a pattern of expenditures growing faster than revenues.
- Known expenses have been understated year after year.
- No standardized efficiency reviews as part of the annual budgeting process.
Comptroller’s Restated Gaps ($M)
| FY 2026 | FY 2027 | FY 2028 | FY 2029 | |
|---|---|---|---|---|
| City Stated Gaps | $0 | ($4,691) | ($6,273) | ($6,296) |
| Comptroller Revenue Estimate Differences | $984 | $1,325 | $1,541 | $2,519 |
| Comptroller Expenditure Estimate Differences | ($3,162) | ($7,039) | ($8,505) | ($8,580) |
| Rental Assistance | (795) | (2,000) | (2,600) | (2,700) |
| Other Chronic Underbudgeting | (2,969) | (3,348) | (3,103) | (3,123) |
| Class Size Legislation | 0 | (501) | (1,038) | (1,078) |
| Asylum Seeker Costs | (186) | 159 | (352) | (237) |
| Other Expenditure Differences | (662) | (1,349) | (1,412) | (1,442) |
| Reserve Allocation | 1,450 | |||
| Total Comptroller Differences | ($2,178) | ($5,714) | ($6,964) | ($6,061) |
| Restated (Gap)/Surplus | ($2,178) | ($10,405) | ($13,237) | ($12,357) |
Note: Positive numbers decrease the gap and negative numbers increase it. Revenue differences include tax revenue and miscellaneous revenue differences.
Chronic Underbudgeting of Expenses Distorts Budget ($M)
| Chronic Underbudgeting | FY 2026 | FY 2027 | FY 2028 | FY 2029 |
|---|---|---|---|---|
| Rental Assistance | ($795) | ($2,000) | ($2,600) | ($2,700) |
| Overtime | ($727) | ($559) | ($560) | ($562) |
| Shelter Capacity, Non-Asylum Seeker | ($630) | ($945) | ($945) | ($945) |
| Public Assistance | ($641) | ($276) | ($10) | $0 |
| Contributions to MTA | ($392) | ($621) | ($673) | ($683) |
| DOE Due Process (Carter) Cases | ($558) | ($488) | ($488) | ($488) |
| DOE Custodial Costs | $0 | ($154) | ($154) | ($154) |
| Other | ($21) | ($305) | ($273) | ($291) |
| Total Chronic Underbudgeting | ($3,764) | ($5,348) | ($5,703) | ($5,823) |