Mayor Eric Adams unveiled a record-breaking $102.7 billion budget proposal Thursday that would increase planned city spending by nearly 1.6% — without accounting for the estimated $1 billion-plus cost of the ongoing migrant crisis.
Officials also warned of a looming “perfect storm of slowing revenue and rising costs” that will leave yawning budget gaps as high as $6.5 billion in coming years.
“Although the economy has been strong, it is slowing,” Adams said during an afternoon address from City Hall. “In order to keep moving forward while preserving the programs and services we value, we must be careful and make the best use of our resources.”
Adams said he anticipated that revenues would be reduced in coming months because “real estate sales have slowed, due to rising interest rates,” while “office vacancy rates remain at a record high” because of the COVID-19 pandemic.
“This weakens the commercial office market and has a negative impact on the property tax, the city’s largest single source of revenue,” he said.
Under Adams’ proposal, overall expenditures would increase by $1.6 billion over the $101.1 billion fiscal 2023 budget adopted last year.
But spending on agencies would go down, including:
- The NYPD’s budget would decrease from $5.59 billion to $5.44 billion.
- The FDNY’s budget would fall from $2.51 billion to $2.24 billion.
- The Department of Education’s budget would be slashed from $31.25 billion to $30.74 billion.
Fixed expenses would rise, however, with the cost of debt service surging from $4.5 billion to $5.73 billion and pension costs increasing from $9.41 billion to $9.56 billion.
The biggest overall increase is in the “Miscellaneous” category, with unspecified spending set to rise from $13.4 billion to $15 billion — which on its own would account for the overall growth of the budget.
Adams is also newly setting aside $43 million and $10 million to pay for unexpected lease and energy costs, respectively.
The mayor’s fiscal 2024 budget includes a projected $1.7 in windfall revenues “driven by continued momentum from the record Wall Street activity in 2021,” City Hall said in a statement.
But the Big Apple’s bean counters expect that “continued slowing growth in the economy” — which many experts say could lead to a nationwide recession this year — “will lead to slowing growth in tax revenue over the financial plan,” the statement said.
“At the same time, the city faces budget pressure related to the costs of meeting its legal obligation to shelter approximately 40,000 asylum seekers that is currently estimated to cost at least $1 billion in FY23 alone, the need to fund billions of dollars in upcoming labor contract settlements over the financial plan, growing annual health care expenses and waning federal stimulus funds that sunset in fiscal year 2025,” City Hall said.
As a result, officials project shortfalls of $3.2 billion in fiscal 2025, $5 billion in fiscal ’26 and $6.5 billion in fiscal ’27.
The city’s fiscal year begins July 1 and ends June 30 of the following year, which gives it its name.
Although fiscal 2023 spending was set at $101.1 billion, budget officials estimated in November that would actually total $104 billion, despite the across-the-board cuts Adams ordered in September.
Adams’ budget plan anticipates reduced revenue from city sources, including property and sales taxes, which is set to decrease from $75 billion to $74.49 billion.
Federal and state funding is also expected to decline from $12.42 billion to $9.48 billion, and $17.06 billion to $16.93 billion, respectively.
On Thursday, Adams’ administration touted more than $3 billion in savings over fiscal 2023 and ’24, primarily from the mayor’s directive to eliminate more than 4,300 vacant jobs.
“About 23,000 vacancies remain open citywide, leaving agencies ample room to hire for critical positions,” City Hall added.
Adams’ balanced-budget plan also keeps $8.3 billion in reserve, including $4.5 billion set aside for increases in retiree health care costs and $1.6 billion for general expenses.
But there’s no projected increase in the amount of money allocated to house and care for the surge of migrants who began flooding into the city in the spring as a result of President Biden’s border crisis.
Other new spending includes:
- $259 million to help meet “carbon-reduction targets” set in 2020, when the city mandated that new buildings be all-electric by 2027;
- $228 million for “high-priority street construction,” including projects tied to the Vision Zero safety plan;
- $153 million for a public-private plan to redevelop Willets Point in Queens;
- $77 million to double the installation of new traffic signals to 200 a year and make related improvements;
- $62.3 million to reconstruct the landmark Soldiers’ and Sailors’ Monument in Riverside Park on Manhattan’s Upper West Side.
The mayor, who in October declared a state of emergency over the migrant crisis, has pegged that cost at $1 billion a year and is seeking the money from the White House, which last week refused to commit to granting Adams’ repeated pleas.
To date, New York City has been awarded less than $10 million in federal funds, Budget Director Jacques Jiha told reporters during an afternoon briefing.
Adams said he was “grateful” for the approved funding but said it “will not come close to covering what we need.”
“New Yorkers will be left footing the bill — now and in the future,” he said. “We will continue to push for relief from the state and the federal government so that we can avoid straining our budget and our capacity to provide city services for everyday New Yorkers.”
As of Wednesday, about 26,700 of the 39,500 migrants who’ve arrived in the Big Apple were being housed in 75 hotels and four “Humanitarian Response and Relief Centers,” according to the latest figures from City Hall.
The so-called HERRCs include the Row NYC hotel near Times Square, where a whistleblowing worker on Tuesday revealed that nearly a ton of taxpayer-funded food was being wasted daily.
Hizzoner’s new spending includes $20 million to tackle the city’s housing crisis, including giveaways of up to $100,000 each for low-income, first-time home buyers and a crackdown on “bad” landlords who harass their tenants.
Another $2.8 million is earmarked for the mayor’s “Get Stuff Built” plan to create 500,000 units of affordable housing in 10 years, with the money intended to speed up development by cutting red tape in various city agencies.
