Menin pushes back on Mamdani’s plan to tap rainy day fund | WATCH

NEW YORK - The city is heading toward a budget showdown as New York City Mayor Zohran Mamdani and City Council Speaker Julie Menin clash over how to close a multibillion-dollar gap. 

New comments from Menin underscore just how far apart the two sides remain.

What we know:

Speaking Wednesday on Good Day New York, Menin made clear the council is drawing a firm line against tapping the city’s rainy day fund.

"We don’t want to do that… the rainy day fund is there for emergencies," she said. "It wasn’t raided during COVID. It wasn’t raided during the asylum seeker crisis. So we are really completely uncomfortable with raiding it."

The other side:

The Mamdani administration is pushing to tap nearly $1 billion from the reserve, a move council leaders strongly oppose.

The backstory:

According to multiple reports, the mayor formally asked the City Council to amend its current spending plan to allow access to $980 million from the fund, which was created in 2021 under former Mayor Bill de Blasio. 

The fund now holds roughly $2 billion and has never been used, even during the COVID-19 pandemic or the migrant crisis.

Mamdani argues the withdrawal is necessary to help close a projected $5.4 billion budget deficit tied to his proposed $127 billion spending plan. He has also warned that property taxes could rise by 9.5% if state lawmakers do not approve higher taxes on millionaires and corporations.

Menin warns of financial consequences

Menon also warned that tapping the fund could have long-term financial consequences.

"That will actually increase our borrowing costs by about $120 million a year," she said, pointing to recent negative outlooks from Moody’s and S&P. "It really affects our ability to borrow."

Instead, City Council leaders say the city can close the gap without touching reserves.

Menon pointed to ongoing budget hearings and internal reviews aimed at identifying savings across agencies — while insisting core services will not be cut.

"To be clear, we are not cutting services, we are not cutting employees," she said. "We do believe there are areas of savings where we can responsibly say… let’s talk about where you could possibly save."

The council has already highlighted nearly $1.7 billion in potential savings and added revenue, including eliminating thousands of long-vacant city positions.

Mamdani, however, has pushed back, warning those reductions could hurt hiring across essential services.

"The current proposal… would remove more than a billion dollars from personnel budgets across city agencies," Mamdani said. "That would make it significantly harder for agencies to hire teachers, police officers, nurses and other essential public servants."

City comptroller warns against using emergency funds

City Comptroller Mark Levine has also opposed using the rainy day fund, arguing it should be reserved strictly for emergencies.

While the mayor has framed the deficit as urgent, Menon rejected the idea that it justifies dipping into reserves.

"We do have this budget deficit, but we think through these budget hearings we’ll properly identify the savings," she said, adding that the council is also exploring new revenue streams.

She also delivered a clear message to homeowners concerned about rising costs.

"We are a hard no on raising the property taxes," Menon said. "We are absolutely a hard no on that."

Slowing job growth, businesses leaving the city

The standoff comes as broader economic concerns loom. Menon pointed to slowing job growth and businesses leaving the city as reasons to proceed cautiously.

"5,000 businesses left the city of New York last year," she said. "We need to make sure that we’re constantly keeping our economy strong."

Despite the public back-and-forth, Menon downplayed the idea of a full-blown crisis — at least for now.

"Unfortunately, there always seems to be a budget dance," she said. "We want to get to the finish line… delivering a balanced budget."

What's next:

Meanwhile, budget hearings resume Wednesday at City Hall, with the Public Safety Committee set to review spending plans for the NYPD, district attorneys’ offices and other agencies. NYPD Commissioner Jessica Tisch and all five district attorneys are expected to testify.

With billions at stake and competing visions on the table, city leaders still appear far from reaching an agreement.

Zohran MamdaniPolitics