Mayor Eric Adams proposed a $114.5 billion budget for the coming year that cuts back on migrant spending while ramping up allocations for shelter beds, tax cuts and infrastructure. But he acknowledged uncertainties posed by a sluggish commercial office market and the policies of the incoming Trump administration.
The preliminary budget for Fiscal Year 2026, released Thursday, paints a sunnier financial picture compared to the last two years, when escalating costs for asylum seekers prompted the mayor to make unpopular budget cuts that the City Council fought to reverse. With fewer migrants arriving in the city, the Adams administration is now lowering the estimated cost of the crisis to another $6 billion between the current year and next year, down from a previous projection of $8.4 billion. The city has already spent some $6.9 billion on the migrant crisis since 2022.
Adams’ new financial plan will be negotiated with the City Council ahead of the July 1 start of the next fiscal year. At $114.5 billion, it would be about the same size as the current year’s budget, which stood at $115 billion as of November.
The improving financial picture comes at an opportune time for Adams, who can pursue his difficult re-election bid this year without needing to defend new cuts to parks or libraries.
“Because we set the table for success, we were able to ensure the continuity of critical programs as well as make strategic new investments in public safety, affordability and quality of life,” Adams said in an address from City Hall.
Gaps between projected spending and revenues will add up to $14.7 billion for fiscal years 2026 and 2029 — generally smaller than what City Hall forecasted in its last financial update in November. That is thanks in part to better-than-expected tax revenues, fueled by strong Wall Street performance expected to continue through next year.
Adams alluded to some headwinds have lowered the city’s revenues, including “subdued” property tax payments and office vacancies that remain “stubbornly high” — although City Hall believes that vacancies peaked this year. And the budget does not account for the impact Donald Trump’s presidency may have on the city when it comes to immigration policy, federal grants or regulations, the mayor acknowledged.
“We cannot project the impact that the incoming administration will have on our city,” Adams said.
New spending
The newly revised estimates for migrant spending come somewhat belatedly. Earlier this month, the Independent Budget Office faulted City Hall for not yet lowering its projected spending on asylum seekers even as it admitted that fewer people were coming into the city and staying in shelters.
Comptroller Brad Lander, who is challenging Adams for re-election, said in a statement that City Hall was being dishonest by claiming it had achieved “savings” by lowering its estimated migrant spending.
“It’s really stretching the budget dance to scapegoat immigrants for the city’s problems, overbudget expenditures on asylum seekers, needlessly threaten to make cuts to libraries and parks, and then claim it as savings,” Lander said.
Lander, the city’s official fiscal watchdog, also criticized Adams for not adding any new money to the city’s reserves and for underestimating other expected costs, like the state-mandated shrinking of school class sizes that began in 2023.
New spending in the preliminary budget includes $137 million on mental health and homelessness initiatives in Fiscal 2026. Among them are commitments Adams has made in recent days to open 900 “safe haven” shelter beds and create a pilot program providing psychiatric and substance abuse treatment for homeless people with severe mental illness.
Meanwhile, Adams’ proposal to end city income taxes for some low-income households would cost the city $63 million in the coming year — although it still requires Albany approval.
And, as it is required to do in every odd-numbered year, the Adams administration released a 10-year capital plan laying out the city’s infrastructure commitments over the next decade. It totals $170 billion, including $3 billion in repairs to the Newtown Creek and a nearby sewer overflow tunnel, and $612 million for repairs to the lower roadway of the Queensboro Bridge.
This developing story will be updated.
