New York City Comptroller Mark Levine Submits Charter Amendment Proposal to Strengthen the Rainy Day Fund

New York City Comptroller Mark Levine Submits Charter Amendment Proposal to Strengthen the Rainy Day Fund

New York, NY - New York City Comptroller Mark Levine today submitted testimony to the Commission of Government Efficiency (COGE) outlining a charter amendment to strengthen the Rainy Day Fund (formally known as the Revenue Stabilization Fund), through clear targets, deposit and withdrawal rules. The Comptroller first advanced the proposal in an April report, citing mounting economic uncertainty driven by global events, the rise of AI, and a decade-long bull run on Wall Street.

"This reform is not about locking away money for its own sake. It is about protecting New Yorkers when the economy turns. A strong Rainy Day Fund is what allows the City to preserve essential services, avoid sudden layoffs, maintain market confidence, and respond to families and communities in moments of disruption," Comptroller Levine says in his testimony.

The Rainy Day Fund was established through a City Charter amendment in 2019 and enabling State legislation in 2020, and provided the City for the first time with a dedicated mechanism to set aside resources for future economic downturns. However, the fund was created with few parameters in place - a major departure from most major cities. Without a mandate to make regular deposits, the Rainy Day Fund's balance currently sits at $2 billion - or around 2% of tax revenues, effectively negligible in a budget as large as New York City's. The need to fully fund New York City's reserves has become more urgent following the Comptroller's Office report, AI and New York City's Fiscal Future, which found that AI could negatively affect the City under several plausible scenarios and recommended increasing the Rainy Day Fund to make it a solid fiscal shock absorber against future economic disruptions.

Building on the April 2026 report by his Office, Comptroller Levine outlined what the charter amendment should include:

• Target Balance. Reserves should be set at 16% of tax revenues to preserve vital City services in an economic downturn. This target percentage represents the amount revenues have fallen off in past recessions. The balance should be no less than 10% of tax revenues to provide meaningful support at the beginning of a recession.

• Formula-Driven Deposits. When the fund is below its target level, the City should be required to make regular contributions based on revenue growth. The formula proposed by the Comptroller's Office would allow the City to save more during strong revenue years, when it is most prudent and least painful to do so.

• Clear Withdrawal Rules. The Charter should establish clearly defined conditions on when money can be taken out, such as sustained employment losses or a catastrophic event, and should limit the amount that may be withdrawn in a single year.

• Regular Reporting. The Office of Management and Budget should be required to include a Rainy Day Fund section in each financial plan, including: the current balance, the target balance, the gap between the two, the deposit formula, whether withdrawal triggers have been met, and the planned use of any proposed withdrawal.

To read Comptroller Levine's full testimony to the Commission on Government Efficiency, click here: https://comptroller.nyc.gov/newsroom/testimonies/testimony-of-new-york-city-comptroller-mark-levine-before-the-charter-revision-commission-on-government-efficiency-coge/

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