City budget battle brewing

Mayor Adams and the leadership of the City Council appear to have different opinions as to how much revenue the city will have available for the fiscal year beginning July 1.

Even if the City Council decided not to add a cent to the preliminary 2023-24 budget announced by Mayor Adams last week, it would again be the largest budget in city history, coming in at $102.7 billion.

It would also would be carrying out-year deficits totaling $14.7 billion through fiscal year 2025-26, even before accounting for things like raises for most of the city employee unions, a reeling Wall Street/financial sector and the possibility of a national recession.

Adams, in a statement on Jan. 12, said both the present and 2023-24 budgets are balanced. Department heads have been told that any new initiatives have to be funded internally. He also said the elimination of half of all vacant city positions still leaves room to make hires for essential services.

“As our city continues its recovery, our administration continues to make investments in our core priorities — including public safety, affordable housing, and clean streets — while exercising strong fiscal management,” Adams said. “By asking agencies to self-fund new needs with preexisting resources, the Fiscal Year 2024 Preliminary Budget continues our strong track record of making prudent use of taxpayer dollars while continuing to ‘Get Stuff Done’ for New Yorkers.”

He reiterated that it was crafted in response to slowing economic growth, which impacts revenue, and fiscal uncertainties.

The new fiscal year begins July 1. Links to Adams’ detailed plan, a summary and related documents can be found on the website of the Office of the Management and Budget at on.nyc.gov/3w2mrdp.

The next steps include a City Council review of the proposal followed by negotiations, public hearings and more negotiations.

If past if prologue, the Council likely will take a dim view of any cuts to any programs or services whatsoever. In a joint statement issued earlier that day, Council Speaker Adrienne Adams (D-Jamaica) and Finance Committee chairman Justin Brannan (D-Brooklyn) issued a preemptive strike in response to changes that had been made to he city’s November 2022 budget assessment.

“The budget vision put forward by the Administration to cut funding for CUNY, libraries, social services, early childhood education, and other essential services for New Yorkers is one this Council cannot support,” they said. “The city is facing multiple crises that require smart investments, and the approach in the November Plan only undermines the health, safety, and recovery of our city.

“We also reject the false choice in this budget modification of having to choose between cuts to city agencies or cuts to non-profit organizations providing services on the frontlines in our communities to underserved and vulnerable New Yorkers ... For this reason, we will not vote on the budget modification with an understanding of the negative consequences in all potential options – we will not reject our own support for vital services to New Yorkers. This decision is intentional, and does not accept the vision put forward in the Mayor’s November Plan.”

Their joint statement later in the day said the Council would scrutinize the budget and work to secure state and federal money “for the City’s response to asylum seekers and other critical services.”

What the Council will have no choice but to accept will be any limitations imposed by the amount of revenue the city receives in the coming year. Unlike the federal government, the city cannot legally finish any fiscal year with red ink in its ledger.

Averting deficits, huge ones, has been an ongoing exercise for the administration since the mayor took office in January 2022.

The present budget, originally set at $101 billion, also was the largest in city history when approved by Mayor Adams and the Council last June.

But the city had not yet ended the first fiscal quarter in mid-September when Adams and his OMB ordered the first of three rounds of reductions; Speaker Adams opposed each order for cuts, calling them premature.

Many recurring expenses, such as a number of early childhood education seats, are not funded after June 30 of this year because they were funded with federal pandemic relief money that is going away.

In Mayor Adams’ first preliminary budget 11 months ago, the combined out year deficit for fiscal years 2024, 2025 and 2026 was $7.9 billion.

By last Nov. 15 the total had ballooned to $13.4 billion.

The projections made last week forecast deficits of $3.2 billion, $5 billion and $6.5 billion, or $14.7 billion, an increase of $1.3 billion in two months and a near-doubling in less than 12.

City Comptroller Brad Lander, in his own statement, also said the city must count on increased state and federal funding rather that making cuts.

“Last year’s record deposit into the City’s long-term reserves will buoy services in a downturn, but we do not yet have enough reserves to navigate us through a recession,” Lander said. “Key areas remain under budgeted, including police overtime, housing vouchers, and likely increases in labor costs, which will swell already-projected out-year budget gaps. The Mayor appropriately asked agencies to find savings opportunities, yet sweeping cuts to vacant positions may come at the cost of hiring in mission-critical functions. Responsible budgeting for NYC’s future does not mean cutting services that New Yorkers rely on.”

Andrew Rein, president of the Citizens Budget Commission, praised much of Adams’ plan, but said there still is a great deal of work to be done.

“It does not mitigate the fiscal cliffs created by using federal Covid and non-recurring city funds to support ongoing services,” he said in a press release. “The city will need to decide whether to cut these programs — including rental vouchers and shelter security wages — or reduce spending on other programs to keep these going.

“Unfortunately, still absent are substantial efforts to restructure and manage how services are delivered to increase their quality but reduce their costs over time. One bright spot is the City’s effort to increase the speed of land use reviews and remove administrative barriers to development; this low-cost ... approach, which realizes that some critical improvements come from the City facilitating and not impeding progress, is one to be replicated across City agencies and programs.”