NEW YORK (BLOOMBERG) -- Mayor Zohran Mamdani and City Council Speaker Julie Menin announced a deal on a $125.8 billion final city budget on Tuesday, after days of contentious negotiations.
The deal includes $175 million for the city rental-assistance program, a sticking point in final talks. The budget pact, the first of Mamdani’s mayoralty, comes as the city’s fiscal year ends and caps months of public debate over the spending plan.
The budget also includes funds to start a $1,000 college savings account for every child who attends public kindergarten, a $53 million investment.
“This is simply one of the most effective ways we can truly address income inequality,” Menin said at an event announcing the deal.
In addition, the budget maintains headcount for the New York City Police Department at 35,000, provides an additional $54 million for the fair fares mass-transit discount program, and creates a new online portal for the public to access documents related to the Sept. 11, 2001 terror attacks.
Mayor Zohran Mamdani speaks at a news conference and rally at a Manhattan union headquarters on June 25, 2026.Spencer Platt/Getty Images
“If these past months have shown us anything, it’s that socialists not only understand economics just as well as the capitalists who came before, but that we can solve their years of mismanagement through an embrace of our principles,” Mamdani said at the event.
In recent days, Mamdani and the Council had clashed over the future of a rental-assistance program known as the City Fighting Homelessness and Eviction Prevention Supplement, or CityFHEPS. The council and the administration will fund the housing voucher expansion at $300 million across the next two years — $175 million in fiscal 2027, and $125 million the following year.
The program has ballooned in size from $25 million in its first year to $1.7 billion in the current fiscal year, and has been growing at a rate of about 4% per month, according to New York City Comptroller Mark Levine. The program currently serves about 65,000 New York families.
CityFHEPS was expanded in 2023 by the City Council. Former Mayor Eric Adams vetoed the law, which changes eligibility to 50% of the area median income and eases other requirements for participants, including removing shelter stays as a precondition for eligibility.
The City Council overruled Adams, but the debate continued in court. Mamdani had pledged to allow the voucher expansion to move forward while he was running for mayor, only to continue the legal fight once in office.
As part of the deal, Mamdani’s administration has agreed to drop the lawsuit, and the Council will vote Tuesday on a replacement bill that “creates a fiscally responsible structure for housing vouchers that contains costs,” Menin said.
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