Mayor Zohran Mamdani and City Comptroller Mark Levine urged New York City’s Charter Revision Commission on Government Efficiency (COGE) on Wednesday to seriously consider amending the City Charter to create a formal funding structure for the city’s rainy day fund.

The joint statement came as Levine submitted testimony to the commission calling for clearer rules around the Revenue Stabilization Fund, the formal name for the rainy day fund, including a target balance, formula-driven deposits, withdrawal guardrails, and regular public reporting.

“The Rainy Day Fund exists because New Yorkers voted to give our City a tool to protect essential services during economic downturns and emergencies. It helps safeguard our schools, public safety, sanitation, housing, health care and social services when times get tough. Years after its creation, the fund still lacks formal rules governing it – and that needs to change,” Mamdani and Levine said in a joint statement. “We need a stronger, more predictable approach to saving for our future. New Yorkers deserve confidence that their government is prepared not only for today’s challenges, but for tomorrow’s as well.”

“That is why we support the serious consideration by the Charter Revision Commission on Government Efficiency to amend the Charter to give the Rainy Day Fund a formal funding structure, including considering a clear target, and responsible rules for when reserves can be used. Building reserves is one of the most responsible steps government can take. It allows us to weather economic shocks without forcing working people to bear the cost through cuts to the services they depend on,” they added. 

The rainy day fund was created after New Yorkers approved a 2019 charter amendment allowing the city to save money for future years. State lawmakers passed enabling legislation in 2020, and former Mayor Bill de Blasio later signed an executive order establishing the Revenue Stabilization Fund.

But Levine argues the fund’s governance structure remains incomplete. In his testimony, he said the city currently has no binding target size for the fund, no formula requiring regular deposits and insufficient guardrails governing withdrawals.

Levine’s proposal would amend Chapter 58, Section 1528 of the City Charter to set a target size for the fund, require a formula-based deposit mechanism and establish conditions and limits for withdrawals. He also called for changing the charter language from “may maintain” to “shall maintain” a revenue stabilization fund.

What Mamdani/Levine’s rainy day plan does

Under the proposal, the mayor, comptroller and City Council would jointly determine a policy setting the parameters for deposits, withdrawal triggers and implementation procedures.

Levine’s office has proposed setting the fund’s target at 16% of city tax revenues, a level he says reflects the average revenue shortfall the city has experienced during past recessions. He is also calling for the fund to reach at least 10% of tax revenues to provide meaningful support at the beginning of a downturn.

The fund currently holds about $2 billion, or roughly 2% of city tax revenues, according to the comptroller’s office.

The proposal would require the city to make regular deposits when the fund is below its target level. Levine’s office has recommended a formula that would allow the city to save more during strong revenue years, when revenues are growing and deposits would be less painful.

The plan would also place clearer limits on when the city can tap the fund. Levine said withdrawals should be reserved for genuine fiscal emergencies, such as a recession, major revenue decline, natural disaster or other catastrophic event, and should not become a routine tool for balancing the budget.

That issue surfaced earlier this year when the Mamdani administration initially proposed drawing on the rainy day fund to help balance the financial plan, even though the city was not facing a recession, a catastrophic event, or a major revenue collapse. That withdrawal is no longer reflected in the current budget, but Levine said the episode showed how vulnerable the fund remains without tougher rules.

Levine also called for regular public reporting, including a Rainy Day Fund section in each financial plan and annual reporting on implementation to fiscal monitors and the public. The reporting would include the fund’s current balance, target balance, gap between the two, deposit formula, whether withdrawal triggers have been met, and the planned use of any proposed withdrawal.

The proposal comes as COGE weighs possible charter changes that could go before voters this November. Mamdani created the commission after moving to dissolve a charter revision commission appointed at the end of former Mayor Eric Adams’ administration, replacing it with a panel focused on government efficiency, service delivery, and accountability.

The rainy day fund push also comes amid broader warnings from Levine and other fiscal watchdogs that the city faces large out-year budget gaps, relies too heavily on one-time fiscal fixes, and maintains reserves that are too low for a city exposed to Wall Street volatility, federal funding uncertainty, climate risks, and technological disruption.

Levine has also tied the reserve push to his office’s recent analysis of artificial intelligence, which warned that an AI investment bust or labor-market disruption could weaken city tax revenues by billions of dollars over the financial plan period.

In his testimony, Levine said the proposed reform is meant to protect New Yorkers from sudden cuts when the economy turns.

“This reform is not about locking away money for its own sake. It is about protecting New Yorkers when the economy turns. A strong Rainy Day Fund is what allows the City to preserve essential services, avoid sudden layoffs, maintain market confidence, and respond to families and communities in moments of disruption,” Levine said in his testimony.

“The Charter should make clear that New York City will save in good times so that it can protect New Yorkers in hard times,” he added.

Any charter amendment recommended by COGE would need voter approval before taking effect.