Mayor Mamdani and Council Speaker Julie Menin announced a handshake deal on the city budget Tuesday morning that includes an additional $300 million on the contentious issue of housing vouchers, bringing a tense budget saga to a close on the last day of the fiscal year.
The two sides were locked in a dispute over the city’s housing voucher program, CityFHEPS, as the Council pushed Mamdani to expand the costly program, while Mamdani voiced worry about the cost throwing the city into fiscal instability.
In the end, the roughly $125 billion budget includes $175 million for housing assistance for the fiscal year, which starts Wednesday, and 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.
And, per the budget agreement, Mamdani will drop the appeal of a lawsuit from the Council to get City Hall to comply with their 2023 law mandating CityFHEPS’ expansion.
The budget is also expected to include additional funding for Fair Fares and NYC Kids RISE, a college savings plan program, sources told The News.
In an earlier budget plan, the mayor sounded the alarm on a multi-billion-dollar budget gap, arguing the only way out was with hiking taxes on the rich or raising property taxes — a proposal the City Council quickly shut down. But Mamdani walked estimates of the gap down as he included Wall Street revenues for the year, savings measures and state aid, and a pied-à-terre tax on luxury second homes.
Menin said in a statement that the new housing program will address some of the fiscal concerns about the program by containing its cost.
“This agreement delivers a humane and fiscally responsible path forward by expanding access to rental assistance, establishing cost controls, and ending years of litigation,” the speaker said in a statement. “I thank Chair Pierina Sanchez and my Council colleagues for their partnership and tireless advocacy to make this agreement possible.”
The program, 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 drop the legal challenge started under his predecessor, ex-Mayor Adams. But once in office, he went back on that promise, arguing the ballooning cost of the program 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. While the Council has scheduled a budget vote for Tuesday at 1:30 p.m., it’s likely to occur hours later.