NYC Council’s Latest Economic Forecast Projects Nearly $2 Billion More in Tax Revenue than Mayor’s Office of Management and Budget in Fiscal Years 2026 and 2027

Driven by stronger-than-expected collections in personal income and business taxes, stronger outlook enables City to fund major budget priorities for New Yorkers while bolstering reserves

NEW YORK, NY - The New York City Council on Tuesday released its June 2026 Economic and Tax Revenue Forecast, which estimates nearly $2 billion more in tax revenue for Fiscal Years (FY) 2026 and 2027 combined than projected by the Mayor's Office of Management and Budget (OMB). The forecast, which estimates an additional $1.5 billion in collections in FY 2027 alone, was released on the second-to-last day of Executive Budget hearings for FY 2027 held by the Council. The updated forecast was driven by stronger-than-expected collections in personal income and business taxes, and represents an improved outlook compared to the last forecast issued in March.

The Council expects tax revenue to grow at an average rate of 4.3% annually through FY 2030, a projection that is higher than its previous forecast and OMB's expectations. Robust aggregate wage growth, higher Wall Street bonuses along with capital gains realization, and recent economic and collections data contributed to the Council's improved outlook. However, despite improvements, this growth is still lower than the 5.5% annual average tax revenue growth New York City experienced between FYs 2010 and 2019.

The Council's forecast uses data from May and is more recent than OMB's latest revenue estimates, which were based on data as of April. The full economic forecast report can be found here. The Council's second-to-last Executive Budget hearing will be livestreamed here.

"From the beginning of the budget process, the Council has maintained a measured and consistent view of the City's fiscal outlook, prioritizing the identification of savings, efficiencies and revenue generators as ways to bridge potential budget gaps," said Speaker Julie Menin. "This updated forecast confirms the overall resilience of the city's economy and provides an opportunity to more fully fund priorities that address the affordability crisis, improve quality of life, and support working families. Just as importantly, it allows us to continue building reserves and protecting the City's long-term fiscal health. We can invest in New Yorkers today while planning responsibly for tomorrow."

With nearly $2 billion in additional tax revenues projected over FYs 2026 and 2027, the Council believes there is sufficient revenue to set aside some of those funds into reserves, while responsibly funding its top budget priorities, including greater investments for college savings accounts through NYC Kids RISE, for the Department of Consumer and Worker Protection to support its expanded responsibilities, additional personnel to clean up and improve city parks, expanding the Fair Fares discount transit program, providing greater support to cultural institutions, and adding a fifth firefighter for dozens of engine companies. More funds for programs to financially support homeowners and provide services to help older adults through the Department for the Aging will also be sought. Recognizing greater than usual uncertainty in the economy, the Council is also calling for a meaningful portion of the nearly $2 billion to be set aside as the first deposit into the City's Rainy Day reserves since 2021.

The Council's tax revenue forecasts have consistently been closest to predicting the actual collections compared to OMB and other monitors, according to an analysis measuring the variance between pre-fiscal year revenue projections and actual collections at the close of each fiscal year. A prior analysis conducted by the City Comptroller's office in 2024 had similar findings, showing the Council's forecast with lowest variance, using a different methodology reviewing forecasters' projections for FY 2024 revenues measured in early 2020 and early 2024.

"The Council's forecast provides a clearer picture of the resources available to meet the needs of New Yorkers and invest in the future of our city," said Deputy Speaker Dr. Nantasha Williams. "Stronger revenue projections should be matched by thoughtful investments that strengthen neighborhoods, support working families, and ensure residents have access to the opportunities and services they need to thrive. Investments in libraries, cultural institutions, youth programs, homeowner supports, services for older adults, and neighborhood infrastructure are investments in the long-term health of our communities. While economic indicators may show growth, many New Yorkers continue to face challenges related to affordability, economic mobility, and access to opportunity. Strategic investments in these institutions help ensure that residents have the tools, support, and resources necessary to participate in the city's success and build stability for themselves and their families. The Council remains focused on ensuring that the benefits of New York City's economic growth are reflected in the daily lives of residents across all five boroughs."

"The Council's latest forecast, which projects an additional $1.7 billion in tax revenue, highlights the importance of responsible fiscal stewardship as New Yorkers continue to face an affordability crisis," said Council Member Linda Lee, Chair of the Committee on Finance. "Throughout the budget process, the Council has remained committed to identifying savings and revenue opportunities that allow us to maintain the essential services New Yorkers rely on while safeguarding the city's long-term fiscal health and avoiding significant property tax increases. With revenues now projected to grow by 4 percent annually through FY 2030, this outlook reflects the resilience of our city's economy and provides an opportunity to protect critical investments and services that support communities across the five boroughs."

The national economy continues to expand, with real gross domestic product (GDP) rising 1.6% in the first quarter of 2026. Resilient consumer spending, especially by high-income households, and business investments in artificial intelligence (AI) and technology, have contributed to positive economic growth. However, lower-income households continue to face pressure from inflation, suggesting ongoing one-sided growth. The Council anticipates economic activity to expand at a 2% pace through the forecast period. The U.S. labor market demonstrated continued resilience in May despite inflationary pressures, with nonfarm payroll employment increasing by 172,000 jobs, while upward revisions totaling 93,000 jobs to March and April reinforced Council's projections of steady growth.

Job growth in the city's economy has improved to a 0.8% annual rate in April, but remains slower compared to the 2% historical average growth. The major driver of employment growth in the city continues to be in the healthcare and social assistance subsectors, which grew at 2.2%. The financial sector also saw moderate growth of 1.7%. Despite gradual growth in the City's employment, average wages paid in the city grew by a robust 6.6% in 2025, with the average wages of the securities industry going up by 11% - continuing to support added strength in personal income taxes.

The Council's forecast projects the City's employment to start rebounding in 2027. Overall, business services and other sectors are expected to improve as the national economy expands. However, job growth is still anticipated to be lackluster through 2030.

New York City's real estate market continues to improve. Manhattan office vacancies are expected to gradually decline, and Class A office vacancies are reaching back to pre-pandemic levels due to recent activity from AI firms driving up commercial leasing activity.

"This updated revenue forecast means the Council can put an additional $2 billion to work for all New Yorkers," said Majority Leader Shaun Abreu. "Through investments like making the Fair Fares program free for everyone who's eligible, we can bolster and expand the essential services that families rely on to build a life in our city. The forecast reflects our economy's resiliency, and the Council will ensure the benefits of that growth support the New Yorkers that power it."

"The Council's latest economic forecast shows that New York City's economy remains resilient and continues to generate stronger-than-expected tax revenues," said Deputy Leader Sandra Ung. "At the same time, we cannot lose sight of the fact that many New Yorkers are still struggling with the everyday realities of rising prices and the lingering effects of inflation. These additional resources present an opportunity and a responsibility for us to invest in the services and programs that residents rely on every day. As we continue to negotiate the budget under the leadership of Speaker Menin, the City Council will work to ensure this stronger fiscal outlook translates into a commitment to the people we serve, ensuring that every New Yorker, regardless of income level, benefits from the city's economic growth."

"With the budget coming down to the wire, I am proud that the Council, led by our Speaker, Julie Menin, has stood firm in its core principles, fighting for a truly balanced budget - one that represents all 51 Council districts," said Deputy Leader Chris Banks. "From the start of this fiscal year, Speaker Menin made it clear that we would push for the resources needed to make New York City more affordable for all, not just a select few. That includes protecting and preserving Section 9 housing, ensuring access to clean and safe parks, and making sure our communities have the support they need to thrive. As we wind down, we remain committed to delivering a budget that reflects our values - from East New York to the Upper West Side- equity, affordability, and opportunity, and that meets the needs of every New Yorker."

"Our city is facing an affordability crisis- with everyday costs rising because the federal government is slashing services, increasing the cost of goods with tariffs, and favoring billionaires over working families," said Council Member Shekar Krishnan. "With more revenue forecasted, the City Council will continue to fight for job stability for our parks workers, increased funding for DCWP so they can enforce my legislation to protect the jobs of Uber and Lyft drivers, and to make childcare more affordable. I'm thankful for Speaker Menin, Finance Chair Lee, and Mayor Mamdani for prioritizing New York City families."

"The Council's updated forecast reflects the continued strength of New York City's economy and provides greater confidence as we work toward a final budget that delivers for New Yorkers," said Council Member Kevin C. Riley. "With nearly $2 billion in additional projected revenue across Fiscal Years 2026 and 2027, we have an opportunity to strengthen the city's long-term fiscal position by building reserves and preparing for future uncertainty, while making strategic investments that address affordability, improve quality of life, and support working families. I thank Speaker Julie Menin, Finance Committee Chair Linda Lee, and the Council's Finance Division for their leadership throughout this process. This forecast reinforces that fiscal responsibility and meaningful investments in our communities can go hand in hand."

"These additional revenues give our city an opportunity to strengthen the services New Yorkers rely on every day, from schools, parks, and libraries to sanitation and programs that support working and middle-class families," said Council Member Eric Dinowitz. "As budget negotiations continue, we must make thoughtful investments that address affordability, improve quality of life, and respond to the needs of communities across our city, while also maintaining the fiscal discipline necessary to prepare for future economic uncertainty."

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