NYC Mayor Adams Scales Back Proposed Cuts to Libraries, Parks

New York City Mayor Eric Adams scaled back some of his proposed budget cuts on Wednesday, using money from better-than-anticipated tax revenue to help avoid a reduction in services at libraries, parks and homeless shelters.

(Bloomberg) — New York City Mayor Eric Adams scaled back some of his proposed budget cuts on Wednesday, using money from better-than-anticipated tax revenue to help avoid a reduction in services at libraries, parks and homeless shelters. 

The $106.7 billion executive budget is still $4 billion higher than the preliminary spending plan Adams unveiled in January. The city has been forced into spending more to shelter more than 50,000 asylum-seeking migrants, and it needs to account for costly new labor contracts with police officers and other municipal workers. The budget is $2 billion less than projected spending for the current fiscal year though.

The budget for the fiscal year that begins July 1 also maintains proposed cuts to city agencies that came in November and January, a factor that could prove an obstacle in front of the City Council, many of whose members have railed against the plan and whose approval is necessary to pass the budget. 

The City Council and Comptroller Brad Lander have also raised concerns about double-digit vacancy rates in city jobs, which they have said will lead to compromised city services. Negotiations between the council and the Adams administration over the next two months will likely prove more contentious than they were a year ago, when the mayor struck a deal with an inexperienced City Council nearly a month before it was due. 

“Making government efficient is not an exercise for its own sake,” Adams said at a Wednesday briefing. “Doing so allows us to spend more resources on improving the lives of working people.”

The executive budget also increased the projected size of out-year budget deficits his administration will have to fill in coming years, with a $4.2 billion gap in 2025, $6 billion in 2026 and $7 billion in 2027. Those combined deficits are $2.5 billion larger than the total three-year gap his office anticipated in January.

City Council Speaker Adrienne Adams, a fellow Democrat, criticized Adams’s spending plan.

“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,” she said in a statement. 

The budget proposal assumes the cost to the city of the asylum-seeker crisis will total $4.3 billion by July 2024, with a little over a third of that funding coming from the federal and state government.  

FEMA Aid

In early April, the city submitted an application to the Federal Emergency Management Agency seeking $650 million in assistance, but it has yet to learn whether it will receive the funding. The budget plan Adams released Wednesday assumes the city will receive just $600 million in aid from the federal government, but not until the next fiscal year. 

Meanwhile, the annual New York state budget, technically due April 1, has yet to be finalized, leaving several gaping holes in the city’s own financial plan. The city’s executive budget assumes the state will deliver $438 million in aid for asylum seekers in the current fiscal year, along with another $562 million after July 1, and $290 million in the following year. 

The fate of Governor Kathy Hochul’s proposal to extract an additional $500 million from the city to help pay for the faltering Metropolitan Transportation Authority is still uncertain. And another Hochul proposal to end enhanced federal Medicaid payments to the city would cost New York $124 million this year, and $343 million in the coming fiscal year. 

The newly revised spending plan detailed the full costs of the city’s outstanding labor contracts including two deals announced in recent months for two of its largest union: DC37 and the Patrolmen’s Benevolent Association, the union representing uniformed police officers. Those two agreements, which provide annual raises of roughly 3%, along with the rest of the city’s outstanding labor contracts, will cost the city $16 billion over the next four years, the Adams administration said. 

For now, the city economy remains strong. New York is just 11,000 jobs shy of the pre-pandemic high and tourism is “booming” Adams said.

However, a Wall Street slowdown and a 23% office vacancy rate are putting pressure on revenue. The city forecasts property tax revenue will increase 2.7% the next fiscal year, while other taxes, such as personal income and sales taxes, will fall 0.8%.

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