Mayor Mamdani, City Council Speaker Menin reach handshake deal on $126 billion NYC budget

Josephine Stratman, New York Daily News on Jun 30, 2026

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NEW YORK — Mayor Zohran Mamdani and City Council Speaker Julie Menin announced a handshake deal Tuesday morning on the city budget that includes an additional $300 million on the contentious issue of housing vouchers, marking an end to a tense budget saga.

The $125.8 billion deal came on the last day of the fiscal year. It will be formally passed with a vote later Tuesday.

“We have worked together to usher in a new era of fiscal health for our city, one that is sustainable, one that is durable, and one that makes needed investments in a safer, more affordable New York,” Mamdani said at a news conference in the City Hall rotunda.

The two sides of City Hall were locked in an eleventh-hour dispute over the city’s housing voucher program, CityFHEPS, as the Council pushed Mamdani to expand the costly program. Mamdani voiced concern that the expense could throw the city into fiscal instability.

In the end, the adopted budget includes $175 million for housing assistance, and it baselines $125 million starting next year.

The city will allocate that money through a new rental assistance program for New Yorkers outside of current CityFHEPS eligibility. That program, according to City Council numbers, could reach as many as 30,000 individuals. It will be established through a bill introduced by Council member Pierina Sanchez and operate under the Department of Housing Preservation and Development.

And, under the budget agreement, Mamdani’s administration will drop its appeal of a Council lawsuit to force City Hall to comply with its 2023 law mandating CityFHEPS’ expansion.

Menin celebrated the budget deal as “demonstrating prudent fiscal responsibility” while making “transformative investments.”

“After nearly six months, our entire team has helped us arrive at a budget that we envisioned from the very beginning,” Menin said.

CityFHEPS costs have skyrocketed at what’s widely seen as an untenable rate: from about $26 million in 2019 to roughly $1.8 billion in 2025, with estimates that the program could cost up to $9.6 billion more by 2030 if the Council’s expansion was implemented, per the Citizens Budget Commission.

“Today’s settlement is a major victory for New Yorkers in shelters and those facing eviction and homelessness, bringing an end to years of unnecessary litigation and clearing the way for more families to access life-saving rental assistance,” Robert Desir, an attorney with the Legal Aid Society, said in a statement.

The budget also includes a $54 million expansion of Fair Fares, which offers half-priced public transit swipes, and $53 million in funds for NYC Kids RISE, a college savings plan program, and an additional $6.25 million for the Department of Investigation — including funding to complete and release a long-awaited report on 9/11 toxins. Also included is $34.2 million to create a new online portal for 9/11 air quality documents, which the administration has said it is working on.

The deal sets aside an additional $350 million for the city’s reserves.

The mayor kicked off the city budget process in February by sounding the alarm on a multibillion-dollar budget gap, arguing the only way out was by hiking taxes on the rich or raising property taxes. But Mamdani slowly brought estimates of the gap down as he included additional revenues for the year and implemented savings plans, and the state forked over aid and a pied-à-terre tax on luxury second homes.

CityFHEPS, which helps New Yorkers who might otherwise be homeless or evicted by paying a portion of their rent, has posed a political challenge for the mayor.

While on the campaign trail, Mamdani pledged to expand CityFHEPS to reach more households and to drop the legal challenge started under his predecessor, ex-Mayor Eric Adams. But once in office, Mamdani went back on that promise, arguing the program’s ballooning cost was too much for the city to handle.

The spending plan is due by end of day Tuesday. The handshake deal kicks off a process where the budget bills must be printed and then voted on.

This budget was the first negotiated by both Mamdani and Menin. While the mood Tuesday was celebratory, a potential budget gap of $8.8 billion, per the city comptroller’s figures, looms over the city.

“This agreement gets the City through an exceptionally difficult year, but it does not resolve the structural challenges ahead,” Comptroller Mark Levine said of the budget deal. “With large out-year gaps, limited reserves and significant economic uncertainty, next year’s budget could be even more difficult.”

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