Katie Honan, The City
This article was originally published on by THE CITY
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At more than $100 billion, New York City’s annual budget is the largest of any municipality in the country — and the expression of how a city still emerging from a pandemic and grappling with an influx of asylum-seekers will set spending priorities.
But the path to a budget deal — the moment when Mayor Eric Adams and City Council Speaker Adrienne Adams soak up applause in the City Hall rotunda — can be complex and contentious.
The City Council and the Mayor’s Office of Management and Budget (OMB) currently are negotiating the city’s spending plan, estimated to be around $107 billion for fiscal year 2024, which begins July 1.
“You have to start with shared priorities, start with programs and initiatives that both the administration and the Council care about, and you try to find as much synergy there as you can,” Justin Brannan, a Brooklyn Democrat who chairs the Council’s Committee on Finance, told THE CITY.
“And then you have to fight over the rest.”
That battle extends to the agencies, organizations and institutions fearing funding cuts, like the city’s three public library systems, which stand to receive $36.2 million less than in the current budget. The reduction would likely close branches on Sunday and cut Saturday library hours, according to a spokesperson for the New York Public Library.
The mayor and the Council also have publicly sparred over the city’s finances, in marked contrast to last year, when the two sides agreed to a deal June 10, weeks before the deadline.
But some Council members were surprised by the deal last year after realizing there were significant education cuts.
Here, THE CITY explains how the budget is hammered out, how the money is distributed and what can happen if it’s late.
How much is the city’s budget?
The mayor and the speaker agreed to a $101 billion budget in June 2022. Since then, it has grown. The mayor’s proposed executive budget, released in April, topped $107 billion.
The city’s operating budget pays for nearly everything — from staffing to salaries to office supplies — and is funded mainly through taxes and other revenue. There is also a revenue budget, which reflects how much the city is taking in through taxes, licenses, and permits, as well as money from the state and federal government.
Each member of City Council is given discretionary funds from the operating budget that they can dole out as they see fit. Often, they give much of that money to local nonprofit organizations.
Separate from the operating budget, the city also must hammer out a capital budget, which pays for long-term and large construction projects, like building new schools or doing a major renovation on a park.
What is the timeline for the budget?
The new budget is due June 30. But there are other important dates throughout the year.
“The city budget is essentially a year-round process,” said Mark Shaw, who served as first deputy mayor under former Mayor Michael Bloomberg, as well as a budget director and finance commissioner for other mayors and for the City Council.
The mayor releases City Hall’s preliminary budget by mid-January, which gives the Council the opportunity to scope out its own priorities and potential cuts. The Council then holds hearings and releases a response to the mayor’s proposal. Then, the mayor releases an executive budget in April.
After City Hall releases that executive plan, the Council and OMB begin their negotiations before finalizing the next year’s budget by the June 30 deadline.
What do budget negotiations look like?
Council’s budget negotiation team goes through the mayor’s executive budget and then a smaller group meets with City Hall before making a deal. Negotiations and meetings take months, insiders say.
“It’s painstakingly long,” Councilmember Diana Ayala, a Democrat who represents parts of Manhattan and The Bronx and is the deputy speaker of the council, told THE CITY.
Most of the estimated $107 billion budget is fixed costs, like wages and baseline funding for agencies, Ayala added.
“We’re not sitting on a lot of money, so we are making sure we maintain it,” she said. “We do have a big fiscal crunch and we have to be responsible.”
Brannan told THE CITY that the finance team tries to be as transparent as possible with all of the Council members. The process has been more open under Speaker Adams, he said, noting frequent meetings in person and virtually as the deadline approaches.
“Our priority is to deliver for the city of New York through those 51 districts,” he said of the Council members. “We want there to be something in the budget for everyone.”
Jonah Allon, a spokesperson for the mayor, said Adams’ focus has been making investments throughout the city while trying to rein in some costs.
“In this year’s negotiations, we are looking forward to building on that progress while ensuring we are being realistic about the fiscal and economic challenges we face,” Allon said in a statement. “The most effective way for the City Council to ensure we can continue funding shared priorities and services that keep New York City clean and safe is to work with us toward an early or on-time budget, and we look forward to that continued partnership in the coming days.”
What happens if the budget is late?
The mayor’s budget director, Jacques Jiha, said at a Citizens Budget commission event last month that he didn’t expect the budget to arrive before the June 27 primary, and Mayor Adams told the Daily News “we’ll see what happens” when asked about the prospect of a late budget.
But even if it does miss the target date, “it’s not that dramatic of an event,” Shaw said.
New Yorkers will still have their garbage picked up, and city workers won’t miss a paycheck.
“New York City has a process for if a budget is not adopted in a timely fashion, by July 1,” Shaw said. “Last year’s budget just goes into effect until a new budget gets done.”
This allows the government to keep working in the short-term, he said.
Many of these budget rules and fears stem from the fiscal crisis of 1975, when the Financial Emergency Act was implemented. Many of those rules were adopted by the city under a 2005 charter revision.
“There are certain aspects of the Financial Emergency Act that really did serve the city well,” said Lisa Neary, the first deputy director of the Independent Budget Office, a nonpartisan group that analyzes the budget.
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