City Budget Grows Even as Mayor Adams Warns of Financial Woes

City Budget Grows Even as Mayor Adams Warns of Financial Woes

Mayor Eric Adams unveiled a nearly $107 billion executive budget on Wednesday, the largest in the city’s history — drawing fire both from City Council leaders who want to spend more and fiscal watchdogs who point to multi-billion-dollar gaps in future years.

Katie Honan and Greg David, The City

Logo for THE CITYThis article was originally published on 7:08 pm by THE CITY

Mayor Eric Adams speaks in the City Hall rotunda about his executive budget.
Mayor Eric Adams released his executive budget during a City Hall press conference, April 26, 2023. | Ben Fractenberg/THE CITY

Increased revenue enabled Adams to expand his spending plan $4 billion over the preliminary budget he proposed in February, and the mayor is exempting some agencies, including the city’s three library systems, from a recently issued order to slash spending by up to 4%. 

For every loss, a gain. For every gain, a loss…

But the mayor is also seeking what he calls “efficiencies” from all city agencies, and projecting that spending cuts will yield $1.6 billion in savings over this and next year’s budget, and $3 billion over the next four years.

“Our goal is always to streamline operations so that agencies can continue to deliver the same or higher level of services,” Adams said during his afternoon budget presentation at City Hall.

“Instead of forcing cuts that could hurt New Yorkers, we found other ways to balance the budget so that we can preserve our quality of life,” he added.

The current budget and the next year’s budget, which starts on July 1, are balanced, the mayor said. But his projections predict that start at $4.2 billion for the fiscal year that begins in July 2024 and rise to $7 billion by July 2026. 

Crisis After Crisis

Adams said the budget situation would be much better if not for the costs of aiding thousands of asylum seekers — noting the unanticipated cost to take care of them has forced the city to use money it would have spent on other programs.

“I’d love to be spending that money on things to make the city great,” he said.

More than 57,000 migrants have come to New York City over the last year, and more than 35,000 of them are still living in city-funded housing or shelters, the mayor said. 

Emergency migrant aid is projected to cost $2.4 billion in the next budget — an amount larger than spending on the city’s Fire Department. Banking on more money from state and federal coffers, Adams’ latest budget does not include any money to aid asylum seekers after 2024.

Administration officials later said they anticipate a “decompression” strategy from the federal government to stem the flow of asylum seekers, and/or more money from the state to cover some of the costs. 

Adams said he expects the number of city-housed asylum seekers to double to more than 70,000 by the end of June 2024 — and that the cost to provide food, shelter, and other care will be $4.3 billion through the end of fiscal year 2024, which ends June 30, 2024. 

At a conference last week in D.C., Adams said New York City “is being destroyed by the migrant crisis” and urged more federal resources.

The mayor’s budget assumes the city will get $800 million from the federal government and $1 billion from the state to help with costs in the current fiscal year and the budget he just proposed.

But his plan does not include any possible additional expenses when the governor and legislature finally adopt a state budget that may require the city to contribute a rumored $150 million a year to help solve the MTA budget crisis or force it to pick up additional Medicaid costs.

The expected cost of contracts the city has already settled with two unions, and projected costs for deals with other unions covering hundreds of thousands of city employees, are also impacting the city’s budget. Raises and associated costs like pensions are estimated to add approximately $16 billion to his new budgets through fiscal year 2027.

City Council Strikes Back

Council leaders lashed back at what they contend is severity from Adams, following their own budget projections earlier this year that were more optimistic about city coffers than the mayor’s, claiming hundreds of millions of dollars more revenue.

“The Executive Budget still leaves our libraries facing significant service cuts, agencies that deliver essential services harmed, and programs that deliver solutions to the city’s most pressing challenges without the investments needed,” Council Finance Committee Chair Justin Brannan (D-Brooklyn) and Speaker Adrienne Adams (D-Queens) said in a joint statement.

“Ultimately, New York City needs a responsible budget that effectively and efficiently prepares us for success by meeting the needs of New Yorkers and protecting against future risks,” reads their statement.

The budget gaps are likely larger than the mayor admits, agrees City Comptroller Brad Lander, but he adds that the administration’s proposal for dealing with it is shortsighted. Instead of near-term pegs, Lander said, the city needs a long-term plan over future years that reduces headcount through attrition and makes the city more efficient.

In what is likely to be a very controversial move, the comptroller also raised the prospect that the city needs additional revenues and said he would be making specific recommendations — in the form of proposed new taxes — in the coming weeks.

“Fewer than 1,000 households saw their incomes grow by $62 billion in the pandemic — 70% of the total income gains in the city — so it is not unreasonable to look to those households,” Lander said. “You will need to address structural issues on the expense and revenue side.”

His state counterpart, Comptroller Thomas DiNapoli, and the nonprofit Citizens Budget Commission both said the mayor’s budget underestimates the big deficits he will need to close in future years.

The CBC also noted that Adams’ fiscal plan not only includes no money for asylum-seeker costs after next year’s budget, it also does not provide funds next year for a series of new city programs that total about $1 billion. Those include a new voucher program to prevent evictions and help homeless people finding apartments,  paying prevailing wages for shelter security, performing additional litter basket collections, and supplying MetroCards for the Summer Youth Employment Program.

The CBC estimated the real budget gaps total $25.9 billion for the fiscal years 2025, 2026 and 2027 — compared to Adams’ over $17 billion. Both the CBC and the state comptroller argued the city should have increased its reserves in the upcoming budget, which total $8 billion, a record amount in dollar terms but not as a percentage of the overall package.

“Spending more now is seductive but shortsighted,” CBC President Andrew Rein told THE CITY.

“We’re going to be sitting here in January and we’re going to be facing a real big-deal problem, the likes of which we haven’t seen in a long time.”

THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.

  • Republished with Permission: The Roosevelt Island Daily News

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