Eric Adams, Adrienne Adams shake hands on $107 billion NYC budget

Despite a year of contentious budget negotiations, the city leaders reached a budget deal before the deadline.

Mayor Eric Adams and City Council Speaker Adrienne Adams announced a budget deal before the July 1 deadline.

Mayor Eric Adams and City Council Speaker Adrienne Adams announced a budget deal before the July 1 deadline. John McCarten/NYC Council Media Unit

It may not be coming weeks early like it did last year, but a deal on the city budget for the upcoming fiscal year was reached Thursday just in time before a July 1 deadline, bringing a season of more contentious negotiations between Mayor Eric Adams’ administration and the City Council to a close.

Mayor Adams and City Council Speaker Adrienne Adams held a press conference at City Hall on Thursday, announcing the $107 billion operating budget for fiscal year 2024. In a year marked by agency budget cuts and new spending on labor contracts and the arrival of tens of thousands of asylum-seekers, debate centered on the Eric Adams administration’s push to further cuts for nearly all city agencies, citing new costs and looming fiscal risks. City Council leaders argued that cuts are curtailing the city’s ability to deliver key services. Even with cuts, the budget exceeded last year’s adopted budget by $6 billion, making it once again the largest budget in city history.

At the eleventh hour, the city’s public libraries were spared budget cuts, following an aggressive lobbying and public relations campaign by the city’s three systems and their supporters, who argued that any additional cuts – beyond what previous savings initiatives from the Adams administration had already slashed – would force reduced programming and weekend closings.

It was all part of the so-called “budget dance” – traditionally the mayor proposes more cuts than he has to. Then money is found, as city revenue exceeds the typically conservative estimates. “Unlike the Yankees, it was not a perfect game,” Mayor Adams said at the press conference in the City Hall rotunda, referencing pitcher Domingo Germán’s historic game Wednesday night. “But we got the win for working class New Yorkers.”

Senior meal programs spared, Rikers classes axed

Most city agencies weren’t as lucky as the libraries. Mayor Adams said the city found more than $4.7 billion in savings across the last year, implementing a series of so-called Programs to Eliminate the Gap, and an initiative to remove many unfilled jobs from the books. 

Still, the council celebrated areas where funding was restored from the mayor’s proposed cuts, including for meal programs serving seniors and some – but not all – funding for City University of New York programs. The budget also includes new funding to legal service providers to support the city’s Right to Counsel law for low-income tenants facing eviction, and renews funding for PromiseNYC, a child care subsidy program that serves undocumented families.

Hours after the scheduled press conference, detailed budget documents had not yet been provided to press.

In another win for the City Council, the capital budget includes $4 billion for fiscal year 2024’s capital budget for housing. Housing advocates and City Council leaders have called for recurring $4 billion annual investment for capital housing needs, though this sum won’t be recurring. Last year’s final budget did include an increase in funding in the capital housing budget, but it averaged out to just over $2 billion annually.

But Speaker Adams also cast the negotiations – and the final outcome – as somewhere short of perfect. Some cuts that the council fought against remained in the final budget deal. “These negotiations were not easy. And in fact they were uniquely challenging because of how much they focused on restoring cuts,” Speaker Adams said. “Every budget win was hard fought.”

The atmosphere at the press conference was tense. The two Adamses eschewed a gracious handshake in front of the cameras, instead opting for a brief, strained handshake of greeting as the speaker entered. Relations between the two sides of City Hall have been frigid, as the mayor just vetoed bills passed by the speaker for the first time. The council is expected to vote to override his veto on the package of housing vouchers in the coming weeks.  

“We got some fantastic wins for the people of this city. But some were left out,” Speaker Adams said. “The budget is passing right now, but this is a bittersweet moment for this council.”

Among the sustained cuts was a reduction for the Department of Homeless Services, which contractors with the agency – including nonprofit shelter providers – said will be passed along to them, and could lead to layoffs. The Department of Correction is also losing $17 million that it’s used to contract with nonprofits that provide classes, career services and reentry programs in city jails. Mayor Adams said that those services can be provided internally by the department, but nonprofit providers have disagreed.

Cliffs ahead

The mayor’s administration urged fiscal discipline in both its preliminary budget and executive budget proposals. The administration’s budget officials have said that its savings initiatives are necessary in light of major new costs – providing shelter for the tens of thousands of migrants who have arrived in the city since last year and new labor contracts – combined with future fiscal uncertainty, including the expiration of federal COVID-19-related funds and risk of a recession.

The Citizens Budget Commission, a fiscal watchdog, has also warned of looming risks and recommended the city make more aggressive spending cuts and focus on narrowing budget gaps in the out years. “It is essentially a one-year budget that again unfortunately delays the wise but hard choices needed to stabilize the City’s fiscal future,” President Andrew Rein said in a statement. “With the coffers temporarily bulging, the budget increases fiscal cliffs, widens future budget gaps, and misses the opportunity to deposit money into the Rainy Day Fund.”

Jacques Jiha, director of the Mayor’s Office of Management and Budget, said that budget gaps in the outyears have grown since the executive budget, to $5.1 billion in fiscal year 2025, $6.8 billion in fiscal year 2026 and $7.9 billion in fiscal year 2027. Total budget reserves are at $8 billion.

With over 50,000 asylum-seekers remaining in the city’s care – and a record 100,000 people in shelters – there’s also disagreement over how much the city will likely spend responding to the influx. The city’s budget office predicts that the ongoing crisis will cost the city $4.35 billion over fiscal years 2023 and 2024.

Mayor Adams rejected the notion that this year’s negotiations were uniquely strained. “I don’t recall a budget cycle that’s not challenging,” Mayor Adams said. “If it’s not challenging then we’re not doing our jobs, and the council isn’t doing their jobs.”

The City Council is expected to vote to adopt the budget on Friday. Some members of the council are expected to vote against the budget to protest spending cuts, but only 26 votes are needed for it to pass.