Mayor Eric Adams may be taking a friendly approach toward President Donald Trump, but his budget director painted a stark picture on Wednesday of how the city’s finances could be threatened by the White House’s policies.
Budget director Jacques Jiha laid out the “risks on the horizon” as the City Council questioned him over the administration’s $115 billion preliminary budget for the 2026 Fiscal Year, which will be subject to negotiations with lawmakers ahead of a June 30 deadline. Although the city has weathered a $7 billion migrant crisis without resorting to layoffs or tax hikes, Jiha said the city could soon suffer under the trade, immigration and spending policies of the Republican-controlled federal government.
“Tariff increases could disrupt international trade and increase the price of goods, and even strengthen the U.S. dollar, which makes us less competitive and reduces exports. Stricter immigration policies could create labor shortages and increase prices, while reductions to government spending could weigh down economic growth,” Jiha said. “Tax cuts may increase the country’s budget deficit, which could crowd out private investment.”
But the Adams administration’s latest budget proposal, released days before Trump took office, does not account for any of those federal risks — although Jiha said the city would factor them into its updated executive budget expected in May.
Federal funds make up $9.7 billion of the city’s $116 billion budget for the current fiscal year that ends in June, and $7.4 billion of next year’s spending plan — helping to fund shelters and low-income housing, cash aid to families, public schools and the CUNY system, among many other programs.
“If even a small fraction of that were cut, there would be a hole in our budget that would make the Titanic iceberg blush,” said Justin Brannan, the council’s finance committee chair. “These cuts are going to hit real New Yorkers hard, especially when it comes to emergency food assistance, housing and health care. What’s equally troubling is the apparent lack of a plan from City Hall to fight back.”
Jiha said the city is developing contingency plans in the event that threatened funding cuts become a reality as the federal budget takes shape in the coming months. But he declined to say whether the city expects to use its own money to make up for lost funding — explaining that he does not want to send a message that federal aid could be withheld without any consequences.
“We don’t want to send a signal to Washington that they can cut our budget with impunity,” Jiha said. His rhetoric mirrored that of Gov. Kathy Hochul, who, when asked about potentially devastating Medicaid cuts, has insisted that the state would be unable to backfill lost funding.
A familiar dance, with a twist
The federal funding threats have disrupted what is otherwise shaping up to be a familiar budget dance between the council and the Adams administration. Once again, the administration has relied on hawkish fiscal forecasts to plan for relatively cautious spending, while the City Council, led by Speaker Adrienne Adams, is leaning on its more optimistic forecasts.
Speaker Adams, who is considering running for mayor, asked Jiha on Wednesday whether he would end the “dance” by committing to a baseline, future-year funding level for priorities like libraries, sanitation services, early childhood education and the CUNY system.
Jiha, a powerful and penny-pinching figure in City Hall, demurred.
“We cannot make a commitment about long-term funding because the long-term funding stream is not there,” he said. “I cannot say we want to fund something, because what’s going to happen is we’re going to balloon the deficit in the out-years.”
Despite its hawkishness, the Adams administration has come under fire from fiscal watchdogs for consistently under-budgeting some expected costs, including NYPD overtime pay and the housing voucher program known as CityFHEPS. (In the current 2025 fiscal year, the city is on track to spend over $840 million more than it had budgeted for overtime pay among the NYPD, Fire Department and Corrections Department, the Independent Budget Office found last week.)
Jiha told the council that his office is working with those uniformed agencies to set monthly targets for overtime pay.
Despite the risks, Jiha did point to potential upsides from the Trump administration’s policies, saying that “tax cuts, increased deregulation, and increased oil and gas production may spur economic growth, especially if coupled with productivity-enhancing investments.”
But like many government agencies and business leaders, New York City has gotten few firm indications about the Trump administration’s plans, from executive orders to spending cuts.
“While we are closely monitoring developments, we are hampered by the lack of clear and unambiguous guidance that will allow us to assess the full risks,” Jiha said.
