New York City
What to know about NYC’s $92.2 billion budget
New York's budget is larger than all but two states, but still feeling the pinch of Wall Street volatility.
New York City Mayor Bill de Blasio’s five years in office have been marked by a thriving economy locally and nationally. New York City is expected to bring in $92.2 billion in revenue next year – up about $14 billion from de Blasio’s first budget, enacted in 2014. But the mayor once again played the role of cautious fiscal steward in his preliminary budget presentation Thursday afternoon, saying that the city’s finances face an “unusual level of uncertainty” due to a number of outside threats. Here are five things to know about the budget.
The budget continues to grow
New York City expects to raise $92.2 billion in fiscal year 2020. Since the city legally must have a balanced budget, that gives de Blasio’s government $92.2 billion to spend. That top line number is up $3 billion from the $89.2 billion budget passed last June (and makes it larger than any state’s budget except for California and New York).
But things aren’t peachy
De Blasio laid out the threats to New York City’s revenue, including the fear of an upcoming economic recession and current stock market volatility, which recently caused New York City to overestimate personal income tax revenues by nearly $300 million. Overall, the city expects to take in nearly $1 billion less in income taxes this year than last. Still, the city is taking in more money than ever thanks to rising property tax revenues – expected to be up nearly $2 billion next year.
De Blasio also pointed the finger at Albany, saying this year’s state budget shifts responsibility for $600 million dollars in spending onto the city’s shoulders, much of it in new education funding. Meanwhile, the city absorbs new costs, including a $1 billion increase in labor costs, and it is paying off more than $350 million in debt service this year.
There will be cuts
De Blasio need to find another $750 million in savings to balance the books before his executive budget is due in April. He’s planning to do so by extending the city’s partial hiring freeze (though the city worker headcount is already at an all-time high) and by giving every agency a tailored dollar amount they need to cut from their budget. De Blasio wouldn’t give specifics, but said “the bar will be set high” and threatened that his Budget Director, Melanie Hartzog, would make her own decisions for agencies that don’t cut to the mayor’s liking. Even the politically powerful police department, which frequently is spared budget cuts, would be included.
No major new initiatives
The mayor barely touched on two of New York City’s hottest issues. Asked if the Amazon deal would be having any effect on the budget the de Blasio said “Not that I can tell … effectively, no.” And asked if the budget devoted any more funds towards the Metropolitan Transportation Authority, something Gov. Andrew Cuomo has long asked of the city, de Blasio was even more succinct: “No. No.”
De Blasio also said that, thanks to the fiscal uncertainty, this year’s budget was shorter on new initiatives than any of his five previous budgets. He’ll devote some $25 million in the upcoming year to launching his NYC Care program in the Bronx to get uninsured New Yorkers preventative health care. It’ll go citywide and cost up to $100 million in subsequent years. And in a small budget line intended to help address a big problem, the city will spend $2.7 million on the mayor’s goal of speeding up city buses by 25 percent by December 2020.
His budget partners seem content
This preliminary budget is just the starting point for negotiations with the New York City Council. The mayor and the Council have nearly five months to negotiate before the budget is due on June 30. Council Speaker Corey Johnson, along with finance committee chairs Danny Dromm and Vanessa Gibson, released a joint statement that was generally supportive, agreeing the economy presents some challenges. But the Council vowed to save its own priorities from budget cuts, including the Fair Fares program for half-price Metrocards for low-income New Yorkers, and funding permanent housing for low-income New Yorkers.
The Citizens Budget Commission, an independent fiscal watchdog which advocates for limited government spending, wasn’t as happy with de Blasio’s plan. Though the city is sitting on more than $5.5 million in various reserve funds, CBC President Andrew Rein called for more aggressive saving and limiting spending growth to inflation.
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