Proposal 5: Set Contribution Targets for Rainy Day Fund to Promote Sufficient Budgetary Reserves

The law today

Voters approved a Charter amendment in 2019 allowing the City to create a Rainy Day Fund, and the State Legislature made corresponding changes in 2020. These provisions do not require the City to deposit or maintain any particular amount; whether to deposit is left to the Mayor and City Council in the annual budget negotiation. State law prohibits withdrawing more than 50 percent of the fund unless the Mayor certifies a compelling fiscal need.[4][6]

Official fiscal estimate

No official fiscal impact statement was published for this charter amendment. The Commission's final report puts the fund's current balance at $1.969 billion; the amendment sets a target of 12 percent of the prior year's City tax revenue across the fund and other reserves but gives no dollar figure, and deposits would still be subject to appropriation in the annual budget with Mayoral and Council approval, so the amendment itself does not appropriate money.[4][5]

Arguments made for

• The fifth ballot proposal "establishes reserves target of 12%, aimed at ensuring long-term fiscal stability," and would require the Mayor's Office of Management and Budget, in consultation with the Comptroller, "to establish a deposit formula that would govern mandatory contributions to the rainy day fund," according to the Commission on Government Efficiency's release announcing the proposals.[2]
• "Cutting nonprofit and small business procurement time by more than half, adding a formal rainy-day fund ... are exactly the kinds of reforms our industry has been calling for," said Carlo A. Scissura, President & CEO of the New York Building Congress, addressing the ballot package including this proposal.[2]

Arguments made against

• "As written, city policy could allow withdrawals for practically any reason and avoid deposits even when revenues are strong," said Andrew Rein, president of the Citizens Budget Commission, who called the proposal "deeply disappointing" because the commission did not go beyond the rainy day fund to also address preventing cuts to city services and public-sector layoffs.[3]
• Reinvent Albany, in a statement to the NYC Campaign Finance Board, as quoted in the Board's summary: "Sadly, this is not the rainy day fund New York City so badly needs to prevent catastrophic budget cuts and layoffs if revenues plunge."[6]
• Reinvent Albany, same statement, on withdrawals: the proposal would "allow the Mayor to define 'compelling fiscal need' which is like allowing them to write their own permission slip to raid the piggy bank."[6]

On record in support

• Commission on Government Efficiency (COGE), the Charter Revision Commission convened by Mayor Zohran Mamdani (sponsor of the proposal)[2][5]
• Citizens Union (recommends a Yes vote on all five proposals, noting it is not perfect)[8]
• Common Cause New York (recommends a Yes vote)[7]
• Hotel and Gaming Trades Council (submitted a statement in support)[6]
• D9 Harlem Votes (submitted a statement in support)[6]
• DRUM Beats (submitted a statement in support)[6]

On record in opposition

• Reinvent Albany (submitted a statement opposed)[6]