By 5 Towns Central Staff

NEW YORK, N.Y. (July 2, 2026) — The New York City Council has approved a record-setting $125.8 billion budget for fiscal year 2027, adopting the spending plan in a 45-6 vote just hours before the July 1 deadline.

The budget, backed by Mayor Zohran Mamdani, increases city spending by more than $10 billion over the previous fiscal year while avoiding major reductions in municipal services.

Education received the largest allocation, with approximately $38 billion designated for the Department of Education. The budget also includes $6.6 billion for the New York City Police Department, representing an increase of roughly $300 million from last year. Additional funding includes $4.2 billion for the Department of Homeless Services, $2.6 billion for the Department of Health and Mental Hygiene, and $350 million placed into the city’s general reserves.

To help finance the expanded spending plan, the city is expected to rely in part on a newly enacted surcharge on certain luxury second homes. Officials estimate the tax could generate between $340 million and $500 million annually, though projections vary.

Despite the budget’s passage, City Comptroller Mark Levine cautioned that significant fiscal challenges remain. Levine noted that the balanced budget depends on approximately $6.1 billion in one-time savings and temporary measures rather than long-term structural solutions.

According to the comptroller’s office, the city is already projecting an $8.8 billion budget gap for the following fiscal year, raising concerns about future spending and revenue as temporary funding sources expire.

While city leaders praised the budget for preserving services and investing in key priorities, fiscal experts say New York will likely face difficult financial decisions in the years ahead as it works to address growing long-term budget pressures.