New York City is planning to reduce the roughly 21,000 vacant positions across city agencies – but not by hiring alone. A letter from Budget Director Jacques Jiha, first reported by Politico New York, ordered most city agencies to reduce their city-funded vacant positions as of Oct. 31 by half.
The new cuts will be implemented in the fiscal year 2024 preliminary budget, which is due in January, and the order exempt teachers and uniformed positions such as police officers. All together, the city is looking at cutting around 4,700 vacant positions, resulting in an estimated $350 million in savings, according to a City Hall spokesperson. The city has projected a budget shortfall of $2.9 billion for the upcoming fiscal year – that, along with the costs incurred by the city in handling the asylum-seeker crisis, necessitate the extra belt-tightening, Jiha said. A City Hall spokesperson claimed that the vacancy reductions will not result in any service reductions.
Along with ordering vacancy reductions, Jiha’s letter advises that agencies have to self-fund any new projects or initiatives. “When I ran for office … I stated that we have to deliver a better product by using taxpayers' dollars better,” New York City Mayor Eric Adams said at an unrelated press conference on Tuesday. “I am keeping my campaign promise. I believe that inside our agencies we have to find efficiencies.”
The coming vacancy reductions, which follow 3% across-the-board cuts announced in January ahead of the preliminary budget, and another round of cuts reflected in a budget update last week, produced a range of responses – from budget watchdogs praising fiscal responsibility to other city elected officials warning against cutting vacant positions that could be crucial to fill.
“It’s a good step. Funding vacant positions and unnecessary positions isn’t helping,” said Andrew Rein, president of the Citizens Budget Commission. The watchdog group holds the position that the city should focus on filing critical vacancies and eliminate unnecessary ones. “This starts to give more realism to the budgets,” Rein said.
Asked about the latest spending cuts, City Council Speaker Adrienne Adams expressed some hesitation. “We’re scrutinizing it right now, but the city can’t afford to lose staff in those agencies that really are relied upon to address the multiple crises we’re facing,” she said Tuesday.
New York City Comptroller Brad Lander expressed concern too. “While we agree that savings are critical as New York City faces economic headwinds, confronting those risks cannot come at the expense of diminishing the city’s capacity to get stuff done,” Lander said in a statement on Monday. “Today’s directive to agencies furthers our concerns about recruiting and retaining the staff needed to implement critical programs from traffic safety improvements to processing housing applications.”
Where there’s more widespread agreement is in the opinion that the city needs to step up its hiring efforts for the vacant positions that remain on the books as staffing shortages threaten the delivery of key city services and leave some existing employees overworked. “Allowing agencies to hire for vital positions is crucial,” Rein said. “These hiring systems are sticky. They make it hard to hire, and that needs to be reformed.”
Jiha’s letter includes a policy change that Rein said is a first step to removing some barriers to hiring. The so-called 2 for 1 rule – a policy that generally redistricted departments to hiring one position for every two that are vacated – is being lifted, and the letter said the the Office of Management and Budget is “committed to reviewing and approving new hire requests quickly and efficiently.”
Asked what the city could do to improve hiring and retention, Speaker Adams said that the city could do a better job of pitching itself. “We don’t do our best when it comes to tooting our own horn about the work,” she said.
The letter also said that the administration is exploring a “variety of retention and recruitment policies that will help agencies maintain a stable workforce and raise morale.” A spokesperson said City Hall doesn’t have anything to share on those policies right now.
But it doesn’t look like agencies will be able to lure job candidates with higher salaries, at least not without approval. The city does not appear to be introducing any more flexibility to allow agencies to hire at more competitive salaries – something that, along with a lack of flexible hybrid work arrangements – some current and former employees cite as a reason that city workers are heading for the exits. The letter said that hiring above the minimum civil service pay rate, along with promotions and salary increases outside current salary guidelines, will still require OMB approval.
Rachel Fee, executive director of the New York Housing Conference, said that the vacancy reductions reported on Monday threaten to exacerbate staffing shortages at the Department of Housing and Preservation and in turn, the city’s affordable housing production. “Permanent cuts to staffing mean permanent cuts to affordable housing at the city’s housing agency,” Fee said. The Mayor’s Management Report for fiscal year 2022 noted that staffing challenges contributed to a 45% decrease in affordable housing production and preservation from fiscal year 2021. “It just seems like a very blunt approach to deal with fiscal concerns without really meaningful solutions to the staffing shortage at the housing agency,” Fee said of the vacancy reductions.
Fee said that among other steps, giving managers discretion to hire at salaries beyond the bottom end of a pay scale would help. “I just don't see that they've made the necessary changes to fully address the issues that they're facing in attracting and retaining staff,” Fee said.
The latest round of spending cuts comes on the heels of a report from state Comptroller Tom DiNapoli’s office, which suggested that attrition may be a bigger issue than hiring, noting that New York City hired more than 40,000 new employees in fiscal year 2022, but attrition has still outpaced hiring.
While vacancy reductions are a common cost-saving measure, that report warned against taking too heavy a hand and eliminating roles that are badly needed. “Understanding the impact of the uneven decline in staffing on the city’s service performance since June 2020 should inform the city’s decisions over which vacancies may be able to be taken for savings and which should be filled to improve or expand municipal services,” the report said.
Additional reporting by Jeff Coltin.