Projected city spending will surge to $104 billion this fiscal year — up about $3 billion — despite across-the-board budget cuts ordered by Mayor Eric Adams in September, City Hall said Tuesday.
The added spending includes as much as $1 billion on the migrant crisis, with city budget officials counting on long-sought federal money to cover the cost.
In a prepared statement, City Hall blamed the series of looming fiscal cliffs on the migrant crisis and inflation, as well as “increased pension costs caused by stock-market losses” and anticipated hikes in employee salaries and the price of health care.
The plan was revealed a day after Adams said neither President Biden nor Gov. Kathy Hochul was willing to discuss the issue of migrant aid for New York City during “campaign season” because they seemed “more focused on running around from one location to the next.”
It also led to a dire warning from state Comptroller Tom DiNapoli, who said the move posed a “material risk” to the Big Apple’s fiscal 2023 budget that “could create spending pressure” in future years.
“In addition, despite a substantial worsening of the economic outlook since its last update in April 2022, including on Wall Street, the city is not yet projecting a further softening in revenues, which is likely to lead to a reduction in projected revenues in its preliminary [fiscal] 2024 budget early next year,” he said.
DiNapoli also scolded former Mayor Bill de Blasio for the city’s “missed opportunity to set aside additional monies in its Revenue Stabilization Fund in [fiscal] 2022 when revenues significantly exceeded projections.”
The city’s financial plan update revealed that municipal agencies only reduced their spending by less than $1 billion, falling more than $1 billion short of Adams’ 3% goal.
The NYPD, which is grappling with chaos in the subways and spikes in every category of major crime except murders, shaved $69 million from its $5.6 billion budget, mainly by leaving some positions vacant before filling them.
The Department of Education cut $153.8 million from its $31 billion budget, with $89.8 million in savings achieved through the same strategy.
The single largest cut, $201 million, was reported by the Department of Social Services, which relied on a budgetary gimmick of transferring $161 million in unused money from fiscal 2022 back to the city.
Meanwhile, budget documents pegged the pending fiscal 2024 deficit at $2.9 billion, down from $4.2 billion two months ago.
But the next two projected budget shortfalls are up significantly, with fiscal 2025’s deficit expected to be $4.6 billion, up from $3.7 billion.
The situation for fiscal 2026 is even more grim, with an anticipated deficit of $5.9 billion, nearly 50% more than the previously projected $4 billion.
The president of the Citizens Budget Commission, Andrew Rein, said, “The city’s long-term fiscal outlet is precarious” and echoed DiNapoli’s concern about the “risk to the city’s finances” if federal or state aid doesn’t cover the migrant crisis.
Rein said “some savings” resulted from the budget cuts Adams ordered, which he called a “good start” but “not nearly enough to stabilize the city’s finances.”
“The city still needs to take a much more serious look at being more productive and efficient and in the long run, it needs to work with the unions, restructure operations, use technology, etc.,” he said.
In a prepared statement, Adams said, “Fiscal discipline has been, and continues to be, a hallmark of my administration.
“The city faces significant economic headwinds that pose real threats to our fiscal stability, including growing pension contributions, expiring labor contracts, and rising health care expenses — and we are taking decisive actions in the administration’s first November Financial Plan to meet those challenges,” he added.
