NYC Council Finds $1.7B in Savings, Urges Mayor Not to Tap Rainy Day Fund

City leaders say budget gap can be closed without dipping into emergency reserves

Published on Mar. 10, 2026

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New York City Council leaders have urged Mayor Zohran Mamdani not to raid the city's 'rainy day' fund to close a $5.4 billion budget gap. The Council's analysis found $1.7 billion in savings and additional revenue that could be used instead, including $1.4 billion from cutting long-standing job vacancies and $386 million in higher-than-expected tax collections. The Council said the rainy day fund, created in 2021, has never been tapped and should be preserved for a true fiscal emergency.

Why it matters

Maintaining the rainy day fund is seen as crucial to protecting the city's fiscal health, especially during economic downturns or unexpected crises. The Council's findings suggest the budget gap can be closed through cost-cutting and revenue increases rather than drawing down emergency reserves, which could have broader implications for the city's credit rating and ability to weather future challenges.

The details

City Council Speaker Julie Menin and Finance Committee Chair Linda Lee released an analysis showing the city could find $1.7 billion in savings and additional revenue to close the budget gap. This includes $1.4 billion from cutting long-standing job vacancies and $386 million in higher-than-expected tax collections. The Council said the rainy day fund, created in 2021 under former Mayor Bill de Blasio, has never been tapped, even during the COVID-19 pandemic and migrant crisis.

  • The city is facing a $5.4 billion budget gap over the next two years.

The players

Zohran Mamdani

The current mayor of New York City.

Julie Menin

The City Council Speaker.

Linda Lee

The City Council Finance Committee Chair.

Bill de Blasio

The former mayor of New York City who created the city's rainy day fund in 2021.

Kathy Hochul

The current governor of New York, who has said she will not raise income taxes on New Yorkers.

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What they’re saying

“The Rainy Day Fund was created to help protect New Yorkers during a true fiscal emergency, and has never been tapped. Our analysis suggests we are not in such an emergency position today.”

— Julie Menin, City Council Speaker

“We think that they should be filled, and they should exist, but they were budgeted, and they just simply weren't filled. So, it shouldn't they can't be really accounted for in the budget.”

— Julie Menin, City Council Speaker

“We are optimistic that the City will be able to preserve the services New Yorkers rely on most, while navigating our ongoing budget process, and we look forward to collaborating with the Administration.”

— Linda Lee, City Council Finance Committee Chair

“I'm committed to making sure that the city and all of the cities around the state are on solid financial ground. So that's what my commitment is. I'm not committed to any one tax or all taxes.”

— Carl Heastie, New York State Assembly Speaker

What’s next

The City Council and Mayor's office will continue budget negotiations, with the goal of closing the $5.4 billion gap without tapping the city's rainy day fund.

The takeaway

The City Council's findings demonstrate that New York City has options to address its budget challenges without having to resort to drawing down its emergency reserves, preserving a crucial fiscal safeguard for the future.