Mayor Zohran Mamdani is directing every city agency to identify 2.5% in savings in Fiscal Years 2027 and 2028 and the later years of the city’s financial plan, renewing his savings push less than a month after the city adopted its $125.8 billion budget.
The directive announced Tuesday includes a 2.5% reduction target for FY27, which began July 1, even though the administration previously required agencies to identify the same percentage in FY27 as part of an earlier savings exercise.
City Hall said that the first belt-tightening effort under Mamdani produced $1.77 billion across fiscal years 2026 and 2027 after agencies were assigned targets of 1.5% and 2.5%, respectively. The administration did not immediately clarify whether the latest FY27 target represents an additional 2.5%, an update to savings already identified for the current year or a continuation of the recurring review process Mamdani established in January.
The announcement also did not provide a total dollar target, identify the budget baseline against which the percentages will be calculated, or set a deadline for agencies to submit their plans.
“Budget season may have just ended, but our work to build a government that delivers more for New Yorkers is never finished,” Mamdani said in a statement. “Every dollar we save by making government work better is a dollar we can put toward services New Yorkers rely on.”
Mamdani said announcing the targets early would give agencies time to review their operations and eliminate inefficiencies “without compromising service.”
The administration will also launch a voluntary Workforce Savings and Efficiency Survey, inviting municipal employees to suggest ways to reduce waste, streamline procedures, and improve government operations. Submissions will be reviewed by each agency’s Chief Savings Officer and could inform future savings plans.
The renewed savings push comes as the administration confronts a sizable gap between projected spending and revenue in the fiscal year that begins next July.
City Comptroller Mark Levine praised Mamdani for beginning the process early, writing on X that the city faces a budget gap of at least $6 billion next year.
“These kind of measures are never easy,” Levine wrote. “But we face a significant budget gap next year, with forecasted expenses exceeding revenue by at least $6 billion. Launching a savings program now, early in the fiscal year, is the right thing to do. Kudos to the mayor for this prudent step.”
Levine’s office offered an even more daunting estimate in June, projecting an $8.8 billion gap in FY28 after incorporating its own tax forecast and estimates of underbudgeted expenses and unmet program needs. At the time, the city’s May financial plan forecast a $7.1 billion gap for that year.
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Andrew Rein, president of the Citizens Budget Commission, also welcomed the early start.
“The earlier you do this, the easier it is to make sure that budget cuts can happen while preserving critical services,” Rein told amNewYork.
But Rein said the administration will eventually need to be more ambitious in finding savings as the projected gaps grow.
“They’ve got big budget problems, and they’re getting bigger,” he said. “So he’s got to continue to be more ambitious over time if he’s going to both preserve services and solve the budget problems.”
Rein said assigning every agency the same initial target can force officials to search broadly for efficiencies, but cautioned against ultimately imposing identical spending reductions across city government.
“The decisions on what you actually implement should be based on where you can get the most savings and the least impact on critical services,” he said. “And that won’t be across the board. It shouldn’t be across the board.”
Mamdani created the Chief Savings Officer positions through an executive order in January, requiring each agency to designate a senior official to develop and implement savings initiatives.
The order says those initiatives must produce recurring reductions in agencies’ baseline budgets and can include more efficient service delivery, consolidating programs, bringing work performed by outside vendors in-house and eliminating or phasing out programs. It also requires each Chief Savings Officer to update their agency assessment every six months and identify new savings opportunities.
Among the savings initiatives City Hall highlighted in March were proposals to audit the eligibility of dependents enrolled in city employee health plans, renegotiate shelter Wi-Fi contracts, reduce consulting and temporary staffing expenses and cancel the Taxi and Limousine Commission’s roughly $20,000 Slack subscription.
Rein said City Hall should establish a deadline, review the agency submissions and ultimately select proposals based on where savings can be achieved with the least effect on critical services.
He also endorsed seeking ideas from city employees, saying worthwhile savings could come from workers at every level of government.
“They should be getting good ideas from employees, from frontline managers, from top-level executives and even from outside people who interact with government,” Rein said. “They should leave no stone unturned.”