Key Takeaways From New York Mayor’s Preliminary Budget Reveal

NYC Mayor Adams speaks at a media availability event after announcing the 2026 Preliminary Budget, Jan. 16, 2025. Oliver Mantyk/Epoch Times

NEW YORK CITY–Mayor Eric Adams unveiled the city’s preliminary 2026 budget on Jan. 16, crediting lower than expected migrant expenses for hundreds of millions in new spending.

During a live stream presentation, Adams revealed a $114.5 billion budget—$2.5 billion larger than the current year’s fiscal budget. An extra $2.4 billion has been carried over from the previous year’s budget because the city spent less than expected on the migrant crisis.

“The combination of federal policy to regulate inflow, and city policy to help households exit shelter, has stabilized the emergency, generating the 28 straight weeks of sustained census declines to date,” the city said in a statement.

This, plus what Adams called “strong financial management” and abundant tax revenue from a good financial year on Wall Street, has allowed for a budget that doesn’t have any major funding cuts, he said.

“Strong fiscal management, combined with our investments in making this a safer, more affordable city, is allowing us to make New York City the best place to raise a family,”  Adams said.

‘City of Yes’ to Housing

The budget includes a $137 million commitment to helping the homeless in Fiscal Year (FY) 2026, which begins July 1. The funds would go towards adding 900 Safe Haven beds and increasing outreach on streets and subways. They will also finance an additional 100 runaway and homeless youth shelter beds.

Other budget items were $325 million in rental assistance and $64.2 million for supportive housing.

“We have also announced a new goal. No child should ever be born into our shelter system,” Adams said. To do this, a pilot program for connecting soon-to-be-parents with permanent housing will be launched.

The mayor touted one of his key initiatives, New York’s “City of Yes for Housing Opportunity,” which is set to invest $5 billion over the next 15 years in housing and infrastructure. It will create up to 80,000 new homes.

‘Axe the Tax’

Adams said his “Axe the Tax for the Working Class” proposal would eliminate the New York City personal income tax for filers with dependents living at or below 150 percent of the federal poverty line. In addition, it would gradually phase out the city’s personal income tax for filers immediately above that mark.

New York City is one of the few United States cities where residents pay local income tax on top of state income tax. The city’s income tax rate ranges from 3.078 percent to 3.876 percent, based on income.

Adams said the program would put over $63 million back into the pockets of more than 582,000 New Yorkers.

Quality of Life

Substantial budget funds will be dedicated to quality of life improvement.

That includes $12.4 million to add second shift cleaning at 100 more hot spots in 64 parks.

Millions in investment will go toward funding recreation staff at the soon-to-open Shirley Chisholm Recreation Center and creating five additional Cultural Institutions Groups (CIGs). Current CIGs include the Bronx Museum of the Arts and the Brooklyn Academy of Music.

Another quality of life investment will fund additional staff to visit and treat 4,000 tree beds per year—a favorite burrowing spot for the city’s large rat population—and to address public service requests.

Ten Year Capital Plan

The city will invest $170 billion over the next decade into infrastructure including roads, bridges, schools, and sewage facilities across the five boroughs, the mayor said.

As part of the city’s ten year capital plan—the city’s biggest ever, $36.5 billion will be dedicated to the NYC Department of Environmental Protection and the Department of Sanitation, $32.1 billion will go towards transportation, and $24.5 billion for affordable housing. The rest will be split between schools, government infrastructure, parks, and libraries.

One of the key investments in infrastructure will be the $3.18 billion Newtown Creek combined Sewer Overflow Storage Tunnel, which would prevent excess sewage from overflowing into Newton Creek. New York City’s combined sewer system releases sewage into Newtown Creek at a rate of over 1.2 billion gallons a year.

Another key investment in the ten year capital plan is $1 billion to go toward housing in the New York City Department of Housing and Preservation Development. $825 million of that will go to the Department of Housing and Preservation Development, and $175 million will go to the Housing Authority.

Education

The proposed budget earmarks millions for educational programs, including $100 million to support the city’s Summer Rising academic and enrichment programming, $31 million for its Learning to Work program, $17.5 million for the career readiness Pathways program, and $15 million for other supportive educational programs.

Several programs covered in the FY2025 budget are not included in the FY2026 preliminary budget, including $112 million for the city’s universal 3-K program. Other education initiatives that lost funding were $41 million for arts education, $12 million for the city’s restorative justice alternative discipline approach, and $10 million for teacher recruitment.

Other items that were not included in the new budget were a $25 million supplemental litter basket service and the $10.8 million “Fair Fares” program, which gave qualified, low-income residents half-priced metro cards.

Critics

Critics called the mayor’s budget unrealistic.

Andrew Rein, president of the Citizens Budget Commission, a non-profit watchdog, said in a statement that the spending plan “does not reflect reality—it is short nearly $4.0 billion needed to fund existing services.”

Rein advised the Adams administration to break what he called a “severe underbudgeting habit” and provide a clear picture of the city’s finances.

The mayor will negotiate with the City Council over the coming months to reach a final budget agreement.