A $12 Billion Deficit—and a Salary Review for City Hall Performed by One Person

As New York City confronted a projected $12 billion budget deficit at the end of January 2026, City Hall briefly found itself debating two vastly different financial questions at once: how to close one of the largest fiscal gaps in its history—and whether the city’s top elected officials were being paid enough.

The juxtaposition came as Mayor Zohran Mamdani warned of a looming fiscal crisis “greater than the Great Recession,” even as a City Council proposal advanced to study potential salary increases for the mayor, comptroller, borough presidents, and council members .Reviewed at a sparsely attended committee hearing—with just one council member present—the bill was effectively punted to a later date.

A Deficit Comes Into Focus

On Jan. 28, newly inaugurated Mayor Mamdani took the podium in City Hall’s Blue Room to outline what his administration labeled the “Adams Budget Crisis.” The figures were stark: a projected $12 billion deficit across fiscal years 2026 and 2027.

Mamdani accused the prior administration of systematically underfunding core services. Cash assistance costs, he said, had climbed to $1.6 billion—roughly double the amount budgeted—while shelter spending faced an additional $500 million shortfall.

The city’s financial strain, officials argued, was compounded by the absence of sustained federal support. A spokesperson for former Mayor Eric Adams pointed to “billions in migrant-related costs” absorbed by the city, expenses that were never intended to fall primarily on local taxpayers.

Mamdani also highlighted a long-running fiscal imbalance with Albany. During the Cuomo administration, New York City sent an estimated $21.2 billion more to the state than it received in return, effectively subsidizing state finances while its own balance sheet weakened.

A Salary Review Amid Austerity

Against that backdrop, a separate financial conversation emerged inside the City Council.

On Jan. 29, Council Member Nantasha M. Williams introduced Int. No. T2026-0123, legislation to create a one-time, three-member commission tasked with reviewing compensation for the city’s highest elected officials, including the mayor, comptroller, borough presidents, and council members.

The bill directed the commission to consider changes in the cost of living, private-sector wage trends, and inflation. The Council’s Finance Division estimated that establishing the commission would cost approximately $100,000 in contractor and administrative expenses.

The proposal arrived as city officials warned that closing the budget gap would require difficult trade-offs, including service reductions and potential tax increases.

The Hearing That Barely Happened

The tension between fiscal restraint and compensation review became visible the following day.

On Jan. 30, the Committee on Governmental Operations, State & Federal Legislation convened to consider the bill. Attendance was sparse. Only Council Member Gale A. Brewer was recorded as present. Council Members Eric Dinowitz, Oswald J. Feliz, Ty Hankerson, Frank Morano, and Althea V. Stevens were absent, while Council Member Susan Zhuang was listed as having a conflict.

With little political appetite to debate elected officials’ pay during a fiscal emergency, the legislation stalled.

Where It Landed

The bill was marked as “Laid Over in Committee,” a routine procedural step in the City Council that postpones action rather than ends it. The designation allows legislation to return for further review, negotiation, or amendment before any vote is taken.

In this case, the delay followed a public hearing marked less by debate than by absence, underscoring the political sensitivity of revisiting elected officials’ compensation as the city confronts a projected $12 billion deficit.

For now, the salary review remains unresolved—neither rejected nor advanced—sitting in legislative limbo as City Hall turns its attention back to closing budget gaps, securing outside aid, and determining how much of the burden will ultimately fall on New Yorkers.