Reports

Stronger than anticipated revenues and lower costs for asylum seekers will help New York City balance its $118 billion fiscal year 2026 budget. However, potential fiscal challenges are emerging, including continued uncertainty regarding federal policy and economic conditions, and fiscal risks from anticipated federal budget cuts. These challenges could limit the City’s potential revenue upside and make it harder to continue to fund recent spending additions for discretionary programs and maintain services.

The Enacted Budget for State Fiscal Year 2025-26 is projected to total $254 billion, a 5.2% increase in spending at a time when new federal actions on funding and policy may change the relationship between the federal government and states. Federal funding represents more than 1 in 3 dollars in the State’s budget. Federal reductions will have real impacts on the people in the State, whether it is the food or medical care they can afford or even the level of care that hospitals provide.

Young workers in New York City between the ages of 16-24 continued to face a high 13.2% unemployment rate in 2024, which was 3.6 points higher than in 2019 and higher than all other age groups. Potential federal funding cuts to education and workforce development grants, as well as a looming economic recession, may weaken job prospects for young people.

New York State has appropriated $1.71 billion through State Fiscal year (SFY) 2025 to help counties implement the provisions of the “Raise the Age” (RTA) law enacted in 2017, with $658.8 million disbursed through SFY 2025. As counties continue implementing RTA through programming and staffing, State spending may continue to increase.

Budget resolutions under consideration by the 119th Congress could lead to a dramatic restructuring of the federal⁠⁠-⁠⁠state⁠ ⁠relationship. This online resource details the vast array of services that federal funding supports amid the continued uncertainty in Washington over potential cuts for states, including funds for Medicaid and other health programs, education, social welfare, transportation, public protection and other vital programs.  

New York City’s proposed Fiscal Year (FY) 2026 operating budget relies on $7.4 billion in federal government funding, accounting for 6.4% of total spending. Recent federal government actions to cut grant programs could jeopardize at least $535 million of federal aid in FY 2025 and FY 2026, but nearly all federal operating aid that flows to the City could be subject to cuts or elimination.

For the fourth year in a row, federal pandemic relief funds resulted in New York having a positive balance of payments with Washington. For every tax dollar New York paid to Washington in Federal Fiscal Year 2023, the State received $1.06 in return; the national average was $1.32. New York’s balance of payments was $912 per capita, ranking New York 42nd among states. This report is the ninth in a series by the Office of the State Comptroller that examines the flow of funds between the federal government and the states.

Interactive Map | Excel file with supporting data

The Federal Tax Cuts and Jobs Act (TCJA) included over 100 provisions amending the federal taxation of individuals and businesses beginning in tax year 2018. Should the provisions of the TCJA sunset with no additional changes made to the federal tax code, there would be little impact on New York State tax collections due to the decoupling that occurred in State Fiscal Year 2018-19. Whatever the outcome relating to the extension of the TCJA as well the inclusion of any new proposals, New York taxpayers will be impacted.

New York City increased its expectations for its surplus in fiscal year (FY) 2025 to $2.34 billion, largely as a result of stronger tax revenue projections and a reduction in the cost of providing services to asylum seekers, which will help balance its $116.9 billion FY 2026 budget. With escalating uncertainty in the federal funding environment — which could lead the State to make choices to balance its budget that pressure local government finances — preparation and transparency remain paramount to navigate the future.

This report examines the ways that funding received by local governments – from federal stimulus programs – as well as volatile annual state and local revenue sources – can impact local budgeting. The temporary nature of the federal stimulus funds in combination with state aid that has not kept pace with inflation, sales tax growth that has returned to lower pre-pandemic levels, and flat property tax revenue growth can put local governments closer to the edge of the fiscal cliff if not carefully managed.

This assessment of the proposed Executive Budget identifies risks and concerns that underscore the importance of taking action to address the trajectory of State spending and improve the State’s structural imbalance, while continuing to bolster the State’s rainy day reserves. After several years of benefitting from extraordinary pandemic relief funding, the federal-state relationship may be changing in ways that could result in cuts to key State programs, especially in health and social services. The need to strengthen the State’s fiscal position has never been greater.

This report highlights Fiscal Stress Monitoring System (FSMS) results for school districts that reported for school fiscal year (SY) 2023-24, which ended on June 30, 2024. Of the 670 districts scored, 22, or 3.3 percent, received a fiscal stress designation. This is six more than in SY 2022-23. The report also includes a look at districts that have experienced chronic fiscal stress over the twelve years since FSMS began and a brief analysis of the system’s companion set of environmental indicators. The environmental indicators show an increase in districts experiencing high teacher turnover and a decrease in those with a declining property tax base.

New York City’s finances have stabilized amid declining costs for asylum seekers and strong revenue, largely from growth in business and property tax collections. The City must balance fiscal management with its operational needs to ensure it can continue to encourage employment and business growth, enhancing its economic and tax revenue base.

New York City’s government workforce reached more than 300,000 employees in June of 2024, the first year-over-year increase since the COVID-19 pandemic. Still, some City agencies remain understaffed, resulting in critical services being impacted. The operational complexity in delivering these services highlights the critical need for stakeholders (management and the public) to have access to relevant data to evaluate the performance of a given agency or program.

New York City Health + Hospitals (H+H) spent $168 million more than projected on temporary staff, despite hiring over 1,660 new nurses in city fiscal year 2024. Nurse employment trends have improved since the end of the public health emergency, especially in New York City and particularly at H+H. In order to manage staffing pressures and service demand, H+H must continue to balance hiring of new staff to execute on its strategic and financial plan.

The Office of the State Comptroller prepares this report as part of the "Quick Start" process established in the State Finance Law. The report includes revenue and spending projections through SFY 2026-27.

After a brief period of financial stability secured by an infusion of State funds last year, the Metropolitan Transportation Authority (MTA) now faces growing fiscal uncertainties and risks that create projected budget gaps. Those gaps could grow much wider if various budget risks that the MTA has identified come to pass. A faster-than-expected return of ridership remains one of the key means for improving the fiscal stability of the system and highlighting the importance of continued investment in the assets of the system.

The Annual Comprehensive Financial Report for the State of New York for the fiscal year ended March 31, 2024.

The Annual Comprehensive Financial Report for the New York State and Local Retirement System (the System or NYSLRS) for the fiscal year ended March 31, 2024.

The MTA must find billions in new funds even as the State tries to resolve the $15 billion gap in revenue created by the pause on congestion pricing. This report lays out possible sources to fund the MTA’s substantial capital needs and emphasizes areas of capital work expected to receive funding in its next capital program.