Mayor Zohran Kwame Mamdani: Good morning. Thank you so much to our chair, Governor Hochul, for convening us. I also want to acknowledge, as the governor did, the comptroller of the State of New York, Tom DiNapoli, and the comptroller of the City of New York, Mark Levine. And thank you as well to FCB Deputy Director Michelle McManus and your team, as well as to our budget director, Sherif Soliman, and his staff for their hard work over a challenging budget cycle.
Fifty-one years ago, when this board came into existence, our city was in the midst of a historic financial crisis. We had billions in debt, an enormous operating deficit and no access to credit. Simply put, New York City was out of money. This board was created to ensure that our city would never reach a similar precipice ever again and that recklessness would be replaced by responsibility. That same commitment to fiscal responsibility has defined our approach to budgeting since we took office in January. We inherited substantial challenges with numerous causes, including years of chronic underbudgeting, structural imbalances and numerous inefficiencies.
And yet, over the months that followed, with the partnership of so many in this room, most of all Governor Hochul, we demonstrated the responsible fiscal management needed to address these challenges and to strengthen our budget. In May, we announced an executive budget that acknowledged years of underbudgeting for known needs and still balanced the budget. At adoption, we balanced the fiscal year 2026 budget at $125.1 billion, and we balanced the fiscal year 2027 budget at $125.8 billion. All of this was done without slashing services and while maintaining more than $7 billion in budget reserves.
And we have listened to the long-standing critique of monitors, several of whom are seated here at this table. As a result of our COGE Charter Commission and our partnership with Comptroller Levine, New Yorkers will vote for the first time on the City's reserve practices, potentially allowing the City to make meaningful reforms to how the Rainy Day Fund is managed.
This budget was a testament to government's ability to lead boldly, innovatively and transparently. And it was a reflection of our conviction that responsible budgeting does not look like temporary fixes or stopgaps, but structural reforms and long-term efficiencies. We appointed Chief Savings Officers at every city agency and tasked them with achieving aggressive savings targets. In just a few months, they identified $1.77 billion in savings initiatives over just two fiscal years. And we pursued enduring stability by enacting systemic solutions to systemic challenges. We invested in special education services, delivering our students the resources they deserve, while taking on the skyrocketing cost of due process cases. We worked to stabilize CityFHEPS, providing voucher holders with support, while also working to protect the program's fiscal sustainability. We added $1.5 billion, for a total of $7.6 billion, to the SCA's five-year capital plan, so that we can properly implement the state law capping class sizes on a realistic timeline.
By taking steps to address rapidly growing costs in these programs, we identified $1.2 billion in cost containment savings this fiscal year, and more in out years. And our work did not stop once the budget passed. Just two weeks ago, we directed city agencies to identify 2.5 percent savings for fiscal years 2027 and 2028, as well as the remaining out years, setting ambitious savings targets early. This budget made investments in a better, more affordable New York City — including our partnership with the governor to deliver universal childcare, the creation of a new Office of Community Safety, investments in street safety and trash containerization, and the baselining of funding for core services like our parks, libraries, cultural institutions and transit programs.
So much of this progress came as a direct result of New York City and New York State working closely together on behalf of the New Yorkers we are proud to both represent. Budget negotiations have long been characterized by attacks and blame. Together with Governor Hochul, Majority Leader Stewart-Cousins, and Speaker Carl Heastie, we have charted a different course. I am grateful for their financial support for the city, whether through direct aid, savings measures, or new revenues, and deeply encouraged by this new era of collaboration we are committed to ushering in. This includes hundreds of millions of dollars in direct aid, billions of dollars in state authorization, and half a billion dollars in new revenue, including a historic pied-à-terre tax on second homes worth more than $5 million. And we also appreciate that our partners in Albany have worked with us to restore cost shifts placed upon the city in recent years, including line-of-duty death reimbursement, youth programming, Article 6 public health, and sales tax intercepts. As a result, only eight months later, our city is on far more stable financial footing. We have maintained strong reserve levels, higher even than the pre-COVID 10-year average. We made a nearly $2 billion prepayment from fiscal year 2026 into fiscal year 2027. This is up from $74 million in November 2025 and nearly double the level it was in the executive budget.
And our pension system is funded at 86 percent, 7 percent higher than the national average of 79 percent. I'm proud that together we are building a local economy that is resilient despite national and international headwinds. We are at an all-time high for total jobs in our city at more than 4.85 million. Private sector job growth is at 1.3 percent year over year, nearly three times the national job growth of 0.5 percent. Our city's unemployment rate fell to 5.3 percent in June, the fourth consecutive monthly decline. Our labor force participation rate is at 62.5 percent, the first time in roughly 50 years that New York City's labor participation rate is higher than that of the nation's. New York City's post-pandemic recovery continues apace with bus ridership increasing and subway ridership up nearly 5 percent year over year. And New Yorkers are riding those buses and subways back to the office. The vacancy rate declined to 19.3 percent in the second quarter of 2026, the 13th consecutive month of decline. And office leasing is on pace to match 2025, the strongest year since before the pandemic. Crime is down, with record lows in murders, shootings, and shooting victims, both ensuring that New York City is safer and making our city more appealing to businesses and to talent. The Knicks championship and the World Cup also boosted spending and tourism in our city, with hotel room rates up 15 percent in June 2026 over June 2025. And I am proud that despite the challenges we faced at the beginning of the year, the credit rating agencies continue to hold confidence in our city's long-term financial outlook with our strong ratings maintained.
Recently, Kroll also revised our outlook upward to stable, another sign of our city's fiscal resilience. As we look forward towards the future, there is real cause for optimism. NYSE member firms recorded profits of more than $20 billion in the first quarter of 2026 alone, nearly half of the anticipated projections of full-year profits. Wall Street continued to record tremendous profits in Q2 of 2026. Companies are leasing offices with hundreds of thousands of square feet, and in the case of American Express, building a new global headquarters in lower Manhattan. I know that optimism is reflected in the projected tax revenues prepared by both Comptrollers Levine and DiNapoli, as well as this board. While we maintain our cautious approach, I appreciate the positivity you hold in anticipating that tax revenue will be even stronger than forecasted in the financial plan.
Fifty-one years ago, this board was established as a careful steward of New York City's finances. For 51 years, you have helped this city emerge from darkness and then maintain its path toward stability and prosperity. It is an honor to lead this work alongside you, alongside Governor Hochul, and alongside the millions of New Yorkers for whom this financial stability is no abstract concept but the foundation of a better, more dignified, more affordable life in the city we all love. Thank you. And with that, I will pass it over back to Governor Hochul.