NYC Council Forecasts Nearly $2B More in Tax Revenue Than OMB, Setting Up Fight Over FY28 Budget Gap

New York City Council Finance Committee members and the Mayor’s Office of Management and Budget (OMB) debated competing tax‑revenue forecasts at a June 9, 2026 FY2027 executive budget hearing, with the Council reporting roughly $2 billion more tax revenue for FY2026–27 than OMB and warning that that gap affects the projected FY2028 budget shortfall and upcoming budget adoption negotiations. Source: https://youtu.be/KFSfiB4j_yY

# What’s happening
– City Council released updated tax forecast showing nearly $2 billion more than OMB for FY26–27. Source: https://youtu.be/KFSfiB4j_yY&t=402
– Mayor’s Office of Management and Budget (OMB) presented the FY27 executive budget and out‑year gap projections. Source: https://youtu.be/KFSfiB4j_yY&t=1177
– The forecast difference alters the projected FY28 out‑year gap used in June 2026 adoption negotiations. Source: https://youtu.be/KFSfiB4j_yY&t=17215

# Why it matters
– All New Yorkers who use city services are affected because budget decisions set funding for programs and staffing. Source: https://youtu.be/KFSfiB4j_yY&t=402
– A higher or lower tax forecast changes available funds for schools, parks, firefighters, and social services during negotiations. Source: https://youtu.be/KFSfiB4j_yY&t=157

# Key details
– Hearing date and location: June 9, 2026, Committee on Finance, Council Chambers, City Hall. Source: https://youtu.be/KFSfiB4j_yY
– Council reports nearly $2.0 billion more tax revenue for FY2026 and FY2027 combined versus OMB. Source: https://youtu.be/KFSfiB4j_yY&t=402
– Council projects tax revenue upside of $1.5 billion (FY27), $3.1 billion (FY28), $4.1 billion (FY29), and $4.9 billion (FY30). Source: https://youtu.be/KFSfiB4j_yY&t=402
– OMB’s FY27 tax revenue forecast totals about $87.8 billion for the coming year. Source: https://youtu.be/KFSfiB4j_yY&t=17215
– OMB expects tax revenues to grow at an average near 2% in the out years and cites a more conservative multi‑year growth trajectory. Source: https://youtu.be/KFSfiB4j_yY&t=2766
– The Council’s analysis shows the FY28 gap widening to $8.8 billion after accounting for underbudgeted costs. Source: https://youtu.be/KFSfiB4j_yY&t=17215

New York City Council Finance Committee members and budget staff debated how to reconcile two competing revenue forecasts during the June 9, 2026 FY2027 executive budget hearing. Source: https://youtu.be/KFSfiB4j_yY

**New York City Council (Council)**
– Role or jurisdiction: City legislative body that reviews and adopts the city budget.
– Action taken or responsibility: Released an updated tax revenue forecast for FY2026–2030 showing about $2 billion more in FY26–27 than OMB.
– Relevant numbers or dates: Forecast released during June 9, 2026 Finance Committee hearing; projects $1.5B–$4.9B upside across FY27–FY30. Source: https://youtu.be/KFSfiB4j_yY&t=402

Council staff testified that the Council’s updated economic outlook reflects stronger collections year‑to‑date and modest growth assumptions through the forecast horizon. Source: https://youtu.be/KFSfiB4j_yY&t=15905

**Mayor’s Office of Management and Budget (OMB)**
– Role or jurisdiction: Executive branch agency that prepares the mayor’s budget and multi‑year financial plan.
– Action taken or responsibility: Presented the FY2027 executive budget, defended a more cautious multi‑year tax forecast, and outlined out‑year gaps.
– Relevant numbers or dates: OMB reported an FY27 tax revenue forecast near $87.8 billion and cited reserves and other adjustments. Source: https://youtu.be/KFSfiB4j_yY&t=17215

OMB officials testified they used a more cautious tax‑revenue path for the out years because of economic uncertainty and the asymmetric risk of over‑forecasting revenue. Source: https://youtu.be/KFSfiB4j_yY&t=2854

Council and OMB officials outlined where their forecasts diverge and why that matters for the FY2028 out‑year gap. Source: https://youtu.be/KFSfiB4j_yY

Council testimony summarized that modest changes in revenue assumptions reduce the FY2028 gap materially; the Council’s forecast and proposed additional resources would bring the FY2028 gap down to a more manageable size when combined with other council proposals. Source: https://youtu.be/KFSfiB4j_yY&t=402

OMB witnesses explained that after adjusting for identified recurring costs and higher baseline expenses, the administration still views the out‑year gaps as significant and prefers conservative revenue assumptions to avoid underfunding services if collections fall short. Source: https://youtu.be/KFSfiB4j_yY&t=1177

Officials from both offices noted the mechanics that drive differences: assumptions about Wall Street profits and financial sector income, personal income tax growth, unincorporated business tax receipts, and how one‑time or re‑baselined items are treated across fiscal years. Source: https://youtu.be/KFSfiB4j_yY&t=402

OMB said the budget increases reserve balances, replenishing the rainy day fund to $2.0 billion and the Retiree Health Benefit Trust Fund to $5.2 billion, and noted reserves are higher than the pre‑COVID average as a share of revenues. The Council urged using some of any one‑time upside to bolster reserves. Term defined: The “rainy day fund” is a dedicated reserve for unexpected fiscal shortfalls. Source: https://youtu.be/KFSfiB4j_yY&t=1177 and https://youtu.be/KFSfiB4j_yY&t=321

Forecast differences will be a focal point in budget adoption negotiations in June 2026 because higher Council revenue estimates would free funds for programs the Council prioritized; OMB’s lower estimates limit available discretionary funding without additional savings or revenue sources. Source: https://youtu.be/KFSfiB4j_yY&t=157 and https://youtu.be/KFSfiB4j_yY&t=17215

Council members and OMB agreed that forecasting contains uncertainty and that reconciling the numbers will involve reviewing agency baselines, identified savings, and the timing of revenues. Source: https://youtu.be/KFSfiB4j_yY&t=2854

Next steps outlined during the hearing: both offices will continue to monitor collections and may update forecasts; the Council will press to use any validated upside to protect programs and reserves during adoption negotiations scheduled for June 2026. Source: https://youtu.be/KFSfiB4j_yY

For further reading and the hearing video, see the Committee on Finance FY27 executive budget hearing recording. Source: https://youtu.be/KFSfiB4j_yY