Eric Adams unveils $114.6 billion FY 26 preliminary budget with optimism

New York City Mayor Eric Adams unveiled an ambitious $114.5 billion preliminary budget Thursday, laying out a spending plan that prioritizes housing, mental health and public safety initiatives while sparing the city from the unpopular broader cuts that have accompanied the last few budgetary cycles. 

“When you look at what we managed and how forward thinking we were, and now we are here this year, saying no cuts, and let's see how we continue to move this city forward. We built confidence in this city and people were willing to come back and invest in this city,” Adams said at a Thursday afternoon press conference. 

The mayor’s remarks painted an altogether rosier picture of the city’s financial standing for fiscal year 2026 compared to the past couple of years. This he attributed to the city’s “booming” economy and $2.4 billion in savings on asylum-seeker spending. “This was a good budget because we did a good job previously to get us there,” Adams added. 

The announcement kicks off months of negotiation between the Adams administration and the New York City Council. The mayor’s office will follow up with its executive budget in late April. An agreement must be struck by the end of June as the new fiscal year starts July 1. Last year’s negotiations for this fiscal year’s $112.4 billion operating budget came down to the wire. 

Adams said the $5.5 billion budget gap for fiscal year 2026 was balanced through increased tax revenue  and savings on asylum-seeker spending, allowing the city to put $2.3 billion from fiscal year 2025 towards closing that gap.

The city’s tax revenues were revised up $1.1 billion for the current fiscal year and $2 billion for the next year. The preliminary budget projects out-year gaps of $4.2 billion, $5.4 billion, and $5.1 billion in fiscal years 2027 through 2029 – all of which have been lowered from the projections in the city’s November Financial Plan. 

Despite the more positive outlook previewed Thursday, Adams said leaders will remain vigilant in the months to come, acknowledging that there is a great deal of uncertainty around how the incoming presidential administration will impact the flow of federal funding to the city. 

“We cannot anticipate the impacts of the incoming federal administration on our city,” Adams said in a pre-recorded video Thursday. "We do not know how new trade, immigration, regulatory, fiscal or grant funding policies will affect New Yorkers.” 

Asked what particular programs might be at risk due to potential federal funding cuts, Adams said he’s not going to assume or get into hypotheticals. For how the city will respond, he pointed to the city’s congressional delegation. “It’s their job to come up with an agenda on how we look at these things that’s going to protect the city. We are going to advocate, we are going to join them, we are going to travel to Washington and fight on behalf of New Yorkers, but every arm of government must do their job,” he said.

The sunnier financial outlook comes at an opportune time for the mayor as he prepares to face a field of challengers in the June 2025 Democratic primary. Rather than be bogged down with defending controversial cuts to city agencies, he’ll be able to better focus on reelection – while also making additional investments he can point to while defending his record to New Yorkers. 

Throughout his three years in office, Adams has instituted multiple rounds of citywide cuts – known as Programs to Eliminate the Gap, or PEGs – which he’d attributed to yawning budget deficits and the city’s spending on services for migrants. Each time, the New York City Council has slammed the projections as overly pessimistic and unnecessarily conservative, fighting to claw back funding during negotiations.

“Now you are seeing the mayor’s forecasts are actually more optimistic than ours – It’s amazing what an election year will do for a budget forecast,” City Council Finance Chair Justin Brannan quipped about Adams’ preliminary plan for the coming year, adding “If the money is there, then let’s get serious about funding these priorities and let’s not have a drawn out six-month fight over the budget.”

While Brannan acknowledged the preliminary plan is exactly that – preliminary – he said it is largely “silent” on a lot of the issues that have been priorities for the City Council like restoring previously enacted cuts to early childhood education and parks. 

“The past three years we’ve been working with two sets of documents – the truth and then whatever the administration is saying. Now we are finally on the same page,” Brannan said on how he feels about upcoming negotiations. “Happy days are here again so lets invest in New York and get this done right.” 

The Citizens Budget Commission, a fiscally conservative watchdog group, cautioned as they have in the past against underbudgeting costs that the administration knows will come up in the future, like overtime. “Mayor Eric Adams leveraged strong revenues and lower-than-budgeted migrant costs to pay for deliberately underbudgeted expenses this year and close the fiscal year 2026 budget gap on paper. However, next year’s spending plan simply does not reflect reality – it is short nearly $4 billion needed to fund existing services,” the group said in a statement. “The Administration should break its severe underbudgeting habit and provide credible spending estimates. New Yorkers deserve a clear picture of the City’s finances, including overtime, housing vouchers, and homeless shelters.”

The budget also includes a number of new investments, including initiatives announced in Adams’ State of the City address earlier this week, including adding 900 safe haven beds, more lifeguards and swim programming, and deepening outreach to people on the subway in need of mental health care.