A new City Council eyes its first budget

New York City Mayor Eric Adams is following through on a promise of fiscal discipline, but cuts are never easy. And he needs the City Council on board.

Adrienne Adams is presiding over her first budget season as City Council speaker.

Adrienne Adams is presiding over her first budget season as City Council speaker. Adrienne Adams is presiding over her first budget season as City Council speaker.

The New York City budget, the huge, complicated result of months of hearings and negotiations, requires consensus between the mayor and the City Council. This year, many of the people involved are creating a city budget for the first time with new leadership, and they’re facing funding cuts from the federal government and a tighter negotiation timeline than usual.

The details of New York City Mayor Eric Adams’ $98.5 billion plan will change between now and when the budget is finalized this summer, but the broad strokes are clear: Nearly all city agencies are facing 3% cuts, with a large chunk of savings set to be found through eliminating vacant positions. Eric Adams may be in the driver’s seat of the city’s budget process, but a large cast of other new characters will have their say, including new City Council Speaker Adrienne Adams. 

Those leading the council’s work – including Adrienne Adams, Finance Committee Chair Justin Brannan and members of the council’s Budget Negotiating Team – said it’s still early in the process, too early to say for certain what their specific priorities will be and what may become sticking points in negotiations with the mayor.

Preliminary budget hearings for a number of committees are on the council’s calendar through the end of March. Then, the council will make its formal response to the mayor’s preliminary budget proposal, followed by the release of the mayor’s executive budget. More hearings and negotiations follow that version, before a final adopted budget is agreed on by July.

Even with all that still to come, some council members are looking ahead to this year’s budget negotiations as a challenging, though not uniquely difficult, task. The council has achieved a few early wins, including securing funding for Fair Fares and the Summer Youth Employment Program – popular initiatives that aim to make transit more affordable for low-income New Yorkers and provide career opportunities to the city’s youth, respectively. But with a new mayor committed to pursuing across-the-board agency savings – something New York City wasn’t in the habit of doing under former Mayor Bill de Blasio – a largely new class of council members and a new council speaker are faced with possible cuts in areas like the city’s composting program and a decline in overall spending for schools and homeless services, thanks in large part to a loss of federal COVID-19 relief funding from the previous year. 

Cuts across the board

This year’s budget poses obvious challenges, most clearly through the 3% cuts Eric Adams is looking to achieve across city agencies, and because of the fact that the city doesn’t have as big a raft of federal aid to rely on this year. “We're on the same page when it comes to rooting out waste, and there's always places where we can find efficiency,” Brannan, who chairs the council’s finance committee, told City & State of the mayor’s preliminary budget. “But I think we have to make sure we're spending wisely. We’ve got to make sure we're putting money away to safeguard our financial future. We’ve got to make sure that we’re fortifying the city’s social safety net. COVID just took a wrecking ball to our safety net for our most vulnerable.”

Though former mayors, including Mike Bloomberg, commonly pursued the so-called Programs to Eliminate the Gap, in which city agencies routinely identify savings to reduce future budget gaps, PEGs weren’t a constant feature in de Blasio’s budgets. “There’s a lot of muscle memory that’s been lost throughout city government,” said Andrew Rein, president of the nonpartisan think tank Citizens Budget Commission. “There are many great city managers, but the discipline of having to regularly look at your operations and say, ‘How do we preserve services but reduce spending by being more efficient?’ That discipline has been lost.”

In the days after the release of the mayor’s preliminary budget, several council members were still poring through the hundreds of pages of budget documents. Drilling down on the proposed cuts means evaluating line by line where savings are coming from, including the cuts that appear to be no-brainers. “It sounds good, you’re only cutting vacant positions. But sometimes a vacant position is desperately needed,” said City Council Member Gale Brewer. 

Composting, parks and human services fall short of promises

While much of the savings Adams has targeted so far appear to be achieved through eliminating vacant positions, other kinds of reductions in spending are gaining some council members’ attention. One of the first to elicit strong reactions is the proposal to suspend the expansion of the Department of Sanitation’s curbside composting program, which was cut during the pandemic and currently is only available in select neighborhoods. Suspending the organics recycling program’s expansion would save about $18 million in the next fiscal year according to the preliminary budget and $9.4 million in the current fiscal year. Coincidentally, Bloomberg proposed a suspension of the city’s recycling program as part of his first budget in 2002.

Like it did 20 years ago, the proposal to cut back on climate change-fighting services has elicited fervent opposition. Council Member Sandy Nurse, a new member who chairs the sanitation committee, said that cuts to the Department of Sanitation’s budget – not just halting the composting program but reducing the department’s headcount – will cost the city in the future. “As a city, it seems we're not connecting the dots about the cost of exporting our waste, the rising litter and rodent problems, and the quality of life and the climate crisis,” Nurse told City & State. “Anything that we’re cutting now, we’re going to be paying for exponentially down the line.” Adams has said that the organics program isn’t efficiently utilized, especially considering the cost and emissions of diesel trucks used in the program, and that the city is looking at how to do it better.

“I think that the mayor is correct that the organics program rollout under the previous administration was not best executed,” Nurse said. “But the solution is not to cut funding for expanding the program, but rather to provide adequate financial and human resources for expansion, for enhancement, innovation of this essential service.”

Brewer, who previously served in the council before returning this year, said that she’s happy with several elements of the preliminary budget, including the baselined funding for Fair Fares and the Summer Youth Employment Program, the reliance on reducing staff by eliminating vacancies rather than laying off civil servants, and the expansion of the Earned Income Tax Credit. But she also identified several “challenges,” including the halted expansion of the organics recycling program, as well as less-than-promised funding for parks, and a desire to see more details about how the budget will address housing and mental health services. 

Though Adams committed during his campaign to allocating at least 1% of the city’s budget to the parks department, his preliminary budget falls short of that goal, with the department’s budget making up about 0.5% of the whole pot. Adams’ office has suggested that he still plans to follow through on the 1% goal.

Council members and advocates have also noted that overall funding for schools and homeless services would be reduced in the next fiscal year. That’s due mostly to a loss in federal funding that helped supplement spending last year. So even though the city itself will direct more funding to schools, education will experience an overall reduction, largely through headcount reductions and decreased funding to schools with declining enrollment.

Housing, meanwhile, is an area that advocates have said is neglected in the preliminary budget. Brewer said that she hoped to see funding for programs to convert hotels into housing managed by social service providers – something Adams has been supportive of – in the budget. “I have a lot of hotels in Manhattan that could be converted. They need to be purchased – that’s capital money,” she said.

“Housing is a top priority for Mayor Adams,” a City Hall spokesperson wrote over email. “We are still in the early stages of the budget process, and the administration looks forward to engaging with our colleagues in government to ensure that all New Yorkers have access to quality, affordable housing.”

“Won’t be as difficult as 2020”

Still, some veterans of the process said that the good news for council members is that the city has been through more difficult budgets in the recent past. “I think that it’s going to be a pretty tough budget,” said Stephen Levin, a former council member from Brooklyn who was term-limited out of office last year. “But it probably won’t be as difficult as 2020,” he said, noting that that budget, negotiated in the thick of the COVID-19 pandemic, included austerity cuts and a heated political fight over police funding during a summer of protests against police brutality and systemic racism. Adrienne Adams, who co-chaired the council’s Black, Latino and Asian Caucus at the time, was in the thick of that debate. 

Rein also said that the council has faced bigger challenges in the past. “This is obviously a new dynamic, a lot of new energy and people who have priorities, and they'll want to make their mark,” Rein said. “But they’re not walking in with the Sword of Damocles holding over their head or big proposed cuts. It’s all on relatively small margins.”

The preliminary budget also includes some wins right out of the gate for the City Council. The plan baselines funding for Fair Fares, the discounted MetroCard program, with at least $75 million dedicated to the program. And the city’s Summer Youth Employment Program, which provides summer job opportunities for people ages 14 to 24 – and which is part of the mayor’s plan to tackle gun violence – is already set to receive $79 million in the next fiscal year. “These are the kind of things where they've often been the subject of contentious negotiations, but the mayor has already funded them,” Rein said. 

With the mayor releasing the preliminary budget a month later than is typical – he was afforded extra time as a new executive – council leadership doesn’t have time to waste before budget hearings kick off in March.

“The council is committed to advancing an equitable and fiscally responsible budget that is crucial for New York City to succeed in its recovery from the pandemic,” a spokesperson from the speaker’s office said in a statement. “We are examining the details of the mayor’s preliminary budget, including its proposed cuts and any omissions, in preparation for our first round of budget hearings next month.”