CBC Highlights Looming Risks of NYC’s FY 2026 Preliminary Budget

The Citizens Budget Commission (CBC) recently raised concerns about Mayor Adams’ proposed Fiscal Year 2026 (FY26) Preliminary Budget, pointing out that although balanced on paper, “it is short $3.6 billion needed to fund existing services and there is no plan to shrink large outyear budget gaps.” Due to the continued expansion and addition of programs that are unaffordable in the long run, since FY23, the city has increasingly spent more money than it is receiving each year, a concern further heightened by potentially significant federal cuts. Surplus funds accumulated through fiscal year 2022 reached a high of $6.1 billion, but since continually being used to balance the budget, these rolled surplus funds are quickly being depleted and estimated by the CBC to likely be closer to $3.0 billion by the end of FY25. “Adjusted for the city’s ability to shift the timing of paying some bills, expenses exceeded revenues by $636.0 million in FY23 and $1.1 billion in FY24, with the potential for the imbalance to be even higher in FY25.” Furthermore, the habitual underbudgeting of current services by the city, which now exceeds $4.0 billion a year, gives the false impression that it can afford to “increase spending even more during budget negotiations,” but lacks the full transparency showing the understated outyear budget gaps of billions of dollars. To begin reversing what the nonpartisan, nonprofit civic organization describes as a precarious situation, the CBC’s recommendations for the FY 26 Executive Budget include greater transparency with reasonable estimates of expenses and revenue; implementation of a Program to Eliminate the Gap (PEG) to reduce spending growth; not funding any new or expanded programs; and adding at least $1.0 billion in funding to the FY26 General Reserve to help respond to potential federal cuts.

Source:    https://cbcny.org/sites/default/files/media/files/CBCREPORT_NYC-FY2025-Prelim-Budget_03102025_0.pdf