City Comptroller Mark Levine has unveiled a proposal aiming to establish stringent rules on the use of New York City’s “rainy day” fund. This initiative is designed to prevent Mayor Zohran Mamdani from tapping into the reserves to address a looming $5.4 billion budget shortfall.
In a report released Thursday, Levine outlined a series of recommendations for managing the city’s Revenue Stabilization Fund. These guidelines would mandate that the fund maintain a minimum balance of 10% of the city’s tax revenues. Additionally, the proposal includes obligatory contributions to the fund and would restrict withdrawals to situations of “compelling fiscal need.”
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“New York City cannot afford a haphazard approach when preparing for economic challenges,” Levine emphasized in a statement. “A well-structured rainy-day fund is essential, complete with clear savings objectives, consistent rules for deposits and withdrawals, and robust protections against political meddling.”
Mayor Mamdani has warned that, without intervention from Governor Kathy Hochul and the state legislature to increase taxes on the wealthy, he may resort to depleting as much as half of the rainy day fund and raising property taxes by nearly 10% to fill the budget gap. Governor Hochul, however, has remained firm in her stance against such tax hikes, despite the mayor’s appeals.
Established in 2020, the rainy day fund currently operates without formal guidelines for either deposits or withdrawals, setting it apart from similar municipal financial programs.
Previous city Comptroller Brad Lander also pitched reforming the funds rules in 2022, similarly calling for standardization of deposit and withdrawal conditions.
The Citizens Budget Commission, which has backed formalizing fund rules in previous years, applauded the effort from the current comptroller.
“We have long supported the critical elements the Comptroller identifies are needed for a well-designed Fund. We welcome the opportunity to work with him, the Mayor, and the City Council to bolster and codify the budgetary safety net New Yorkers need,” Rein stated.
A source familiar with the matter confirmed the council is reviewing the proposal.
“From the start of the budget process, Speaker Menin has been unequivocally opposed to raiding the rainy day fund, which should only be done in true emergencies. The Council released its plan identifying responsible savings and re-estimates that eliminate any potential need for withdrawals from the fund,” Menin spokesman Jack Lobel said in a statement.
The mayor’s office did not respond to a request for comment
