NEW YORK (VINnews) — Mayor Zohran Mamdani and the New York City Council reached a handshake agreement Tuesday on a balanced $125.8 billion budget for fiscal year 2027, ending days of negotiations just hours before the July 1 deadline.

The agreement includes $300 million for a new rental assistance program designed to expand housing aid to New Yorkers facing eviction or homelessness, including many who are not currently eligible for CityFHEPS. The city also agreed to withdraw its appeal in the legal battle over the CityFHEPS expansion after the Council approves legislation establishing the new program.

The budget adds $350 million to the city’s general reserve and directs additional funding to affordable housing, libraries, parks, Fair Fares transit discounts, mental health services, immigrant legal assistance, food pantries, cultural organizations and academic support programs at the City University of New York. It also includes funding to preserve affordable housing, expand mobile mental health treatment and strengthen homeowner assistance programs.

The agreement establishes a public online archive containing city records related to post-9/11 air quality and health risks. According to City Hall, the first documents are expected to be released before the 25th anniversary of the Sept. 11 terrorist attacks, with additional records added over time.

City officials said the budget was balanced through agency savings, additional revenue and state assistance rather than broad spending cuts. The administration said city agencies identified approximately $1.77 billion in savings over fiscal years 2026 and 2027 through efficiency measures.

The final agreement does not include a previously proposed expansion of the New York City Police Department, leaving police staffing unchanged after the mayor abandoned plans to add hundreds of officers amid opposition from activists. The budget nevertheless continues funding for the department while making major investments in housing, education and social services.

The City Council is expected to vote on the spending plan later Tuesday, allowing it to take effect at the start of the new fiscal year on Wednesday.