Affordability in New York reflects the balance between the high cost of living for residents and the fiscal policies that shape the state and city’s economic competitiveness. This page covers CBC’s work on housing production and land use, tax policy, public transit fares and tolling, government spending and budget gaps, and resident quality-of-life surveys.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The City should raise the Fair Fares NYC eligibility threshold to 250 percent of the FPL to better target transit affordability.
The City should improve low uptake and utilization of Fair Fares NYC through expanded education, outreach, and enrollment strategies.
The City should leverage proven strategies, such as signal priority and physically separated busways, to make the City's streets more conducive to faster bus traffic.
The City should work with the MTA to further improve bus speeds as a more cost-effective alternative to fare-free buses.
Raise the Fair Fares income eligibility threshold from 150 percent to 250 percent of the federal poverty level to make life more affordable and increase economic opportunities for low-income New Yorkers.
The City should improve education and outreach, and simplify enrollment to increase utilization of the Fair Fares program.
The City should implement infrastructure improvements and operational changes in collaboration with the MTA to improve bus speeds.
Key Data
In September 2026, the CBCNY highlighted that New York State and its localities collected the most taxes per capita in the nation in fiscal year 2024, eclipsing second-place California by 22% and collecting 71% more per person than the national average, which significantly drives up the cost of living.
In May 2026, the CBCNY reported that the Fair Fares transit discount program suffers from low utilization, with only 31% of eligible New Yorkers currently enrolled and enrollees averaging just three rides per week.
An April 2026 analysis reported that New York City's average asking rent reached $3,800 per month, which consumes half of the median household income as asking rents rise at 3.8% a year.
In February 2026, the CBCNY testified that New Yorkers paid $24 billion in auto insurance premiums in 2024, with the average premium in 2023 of $1,896 being 32% higher than the national average.
In January 2026, the CBCNY noted that local environmental reviews increase development costs for 500-unit projects by 11%, adding $82,000 per unit in New York City and up to $45,000 per unit on Long Island, worsening the housing affordability crisis.
New York State and its localities have the nation's highest per-capita tax collections, exceeding the national average by 71% and second-place California by 22% in fiscal year 2024. To improve competitiveness and address the high cost of living, New York must hold the line on taxes, increase government efficiency, and prioritize policies that enhance affordability.
Recommendations related to Affordability
New York should prioritize policies and programs that enhance affordability and quality of life.
New York should hold the line on or preferably reduce taxes to avoid further driving up the high cost of living.
The state should hold the line on taxes where possible and reduce them where feasible to avoid adding to the already high cost of living.
Key Data
71%
— Amount by which New York's per-capita tax collections exceeded the national average in fiscal year 2024.
46%
— Amount by which New York's tax collections per $1,000 of personal income exceeded the U.S. average in fiscal year 2024.
22%
— Amount by which New York's per-capita tax collections exceeded second-ranked California in fiscal year 2024.
94%
— Amount by which New York's personal income tax collections per $1,000 of income exceeded the national average in fiscal year 2024.
44%
— Amount by which New York's per-capita spending exceeded the national average in fiscal year 2024.
$99 Billion
— Estimated savings for New York in fiscal year 2024 if state and local governments spent at the same per-capita rate as New Jersey.
Expanding the Fair Fares NYC program to 250 percent of the federal poverty level would provide targeted transit affordability support to 722,000 additional New Yorkers at a fraction of the cost of making buses fare-free. This approach preserves fiscal resources while ensuring the transit system remains well-resourced and effectively managed, unlike universal fare-free policies that would cost over $900 million annually and fail to address the needs of subway commuters.
Recommendations related to Affordability
The City should raise the Fair Fares NYC eligibility threshold to 250 percent of the FPL to better target transit affordability.
The City should improve low uptake and utilization of Fair Fares NYC through expanded education, outreach, and enrollment strategies.
The City should leverage proven strategies, such as signal priority and physically separated busways, to make the City's streets more conducive to faster bus traffic.
The City should work with the MTA to further improve bus speeds as a more cost-effective alternative to fare-free buses.
Key Data
$900 million
— The annual cost to the City to replace the MTA’s current bus fare revenues if buses were made fare-free.
250 percent of the FPL
— The proposed eligibility threshold for the Fair Fares NYC program.
722,000
— The number of additional New Yorkers who would become eligible for the Fair Fares NYC program under the proposed expansion.
$146 million
— The projected annual cost to the City for expanding Fair Fares NYC eligibility to 250 percent of the FPL.
31 percent
— The current enrollment rate of the 1.23 million New Yorkers eligible for Fair Fares NYC.
$86 million
— The cost of the Fair Fares NYC program in fiscal year 2025.
Raising the Fair Fares income eligibility threshold from 150 percent to 250 percent of the federal poverty level would provide transit access to an additional 722,000 New Yorkers at a cost of $146 million. This expansion, alongside efforts to simplify enrollment and improve outreach, would help address the significant financial burden of transportation for low-income residents while increasing program utilization.
Recommendations related to Affordability
Raise the Fair Fares income eligibility threshold from 150 percent to 250 percent of the federal poverty level to make life more affordable and increase economic opportunities for low-income New Yorkers.
The City should improve education and outreach, and simplify enrollment to increase utilization of the Fair Fares program.
The City should implement infrastructure improvements and operational changes in collaboration with the MTA to improve bus speeds.
Key Data
$146 million
— The cost of the proposed Fair Fares expansion.
$232 million
— The total annual cost of the Fair Fares program after the proposed expansion.
722,000
— The number of additional New Yorkers who would be eligible for Fair Fares under the proposed expansion.
31 percent
— The portion of currently eligible individuals who are enrolled in the Fair Fares program.
50 percent
— The portion of eligible individuals who are employed.
New York City faces significant economic challenges as rising rents, which now consume half of the median household income, and high tax rates drive residents and businesses away. To remain competitive, the city must prioritize housing production, control wasteful spending, and avoid further tax increases while improving government efficiency.
Recommendations related to Affordability
The mayor and City Council should adopt a sound budget that improves services, expands effective programs, eliminates ineffective ones, enhances affordability and holds the line on taxes.
City leaders must prioritize boosting housing production to address the city's affordability crisis.
Policymakers should avoid raising already high taxes, which risks alienating residents and businesses that create jobs.
The city must focus on reining in wasteful spending and increasing efficiency to improve fiscal and competitive challenges.
The Chief Savings Officers must dig deeper to eliminate spending that isn’t serving people well, as the current savings target is insufficient.
Key Data
3.8%
— Annual increase in asking rents, which is twice the pre-pandemic rate.
$3,800
— Average monthly asking rent, which consumes half of the median household income.
38%
— Amount more in taxes per person collected by the state and its localities compared to New Jersey.
40%
— Amount more in taxes per person collected by the state and its localities compared to California.
114,000
— Number of more people who left New York City for other places in the U.S. than moved in last year.
6,350
— Net number of businesses lost by the city in the first three quarters of 2025.
Jackie most recently served as the Commissioner of the New York State Division of Homeland Security and Emergency Services from 2021 to 2026, where she oversaw emergency management, disaster recovery, counter terrorism policy, cyber security and emergency services for the state of New York. She served in New York City’s…
New York State's budget is currently late for the seventh consecutive year, marking a recurring failure to meet critical deadlines. State leaders are urged to prioritize a budget that addresses affordability, curbs spending growth, and implements measures like reducing auto insurance costs.
Recommendations related to Affordability
State leaders should focus on enacting a smart, future-proofing budget—one that focuses on affordability and program quality, curbs ballooning spending growth, and holds the line on New York’s nation-leading taxes.
The State should adopt the smart choices the Governor proposed to reduce auto insurance costs.
New York State's budget faces a significant structural imbalance, with spending growth outpacing inflation and threatening long-term fiscal stability. To improve affordability and competitiveness, the state must curb spending, reject harmful tax increases, and implement structural reforms in areas like housing, auto insurance, and childcare.
Recommendations related to Affordability
Reject harmful tax increases; increasing personal income or business taxes would risk further shrinking New York’s share of the nation’s high earners that pay significant taxes, and squeeze businesses that create jobs.
Reform SEQRA to boost housing supply and affordability, as lengthy environmental reviews increase costs and delay development.
Reform auto insurance to lower costs, as proposed liability reforms could reduce premiums by up to 10 percent, saving $200 per vehicle.
Target childcare investments by focusing funding on families with the greatest financial need to help sustain program funding.
Recalibrate emissions reduction targets and adopt standard accounting to ensure programs balance decarbonization with affordability and job growth.
Reject ineffective energy spending, such as adding $1 billion in Sustainable Future capital spending when other funds are available.
Key Data
31 percent
— The decline in New York's share of the nation's millionaires between 2010 and 2022.
$13 billion
— The amount of additional personal income tax revenue the State and City would have collected had New York's share of millionaires stayed at 2010 levels.
21.37 percent
— The combined business tax rate in New York City under proposed increases, nearly double New Jersey's top rate.
$82,000
— The increase in cost per housing unit in New York City caused by a two-year delay in environmental reviews.
32 percent
— The amount more New Yorkers spent on auto insurance per vehicle compared to the national average in 2023.
10 percent
— The potential reduction in auto insurance premiums if proposed liability reforms are enacted.
Mayor Mamdani's initial savings plan is a positive first step, but the administration must exceed its $1.7 billion target to ensure long-term fiscal stability. Achieving true affordability for New Yorkers requires a fundamental transformation in government operations and a commitment to efficiency that matches the administration's stated goals.
Recommendations related to Affordability
The administration must be as ambitious about government efficiency as it is about affordability.
The administration must pursue a real transformation on how we run government, and not spend money that doesn’t help New Yorkers.
The administration will have to go much further than the $1.7 billion savings target to achieve necessary fiscal goals.
Key Data
$1.7 billion
— The current savings target set by the administration.
New York residents and businesses face some of the highest auto insurance premiums in the country, with average policies now topping $4,000. Implementing proposed reforms to the state's no-fault and liability laws could save drivers at least $200 per vehicle annually and reduce total costs by $1.9 billion.
Recommendations related to Affordability
Redefine the “serious injury” threshold to limit the ability of drivers with minor or non-permanent injuries to sue for damages beyond the no-fault limit, while preserving the right to sue for those with the most substantial injuries to lower premiums.
Allow drivers to recover non-economic damages only if the injured driver is not at fault, which would align New York with the modified comparative liability standard used in most other states to improve affordability.
Cap non-economic damages in cases where drivers are uninsured or get into accidents while breaking the law to limit the outsized awards that contribute to rate increases.
Protect defendants against joint and several liability claims to ensure that defendants are only on the hook for the share of damages that are their fault to reduce upward pressure on insurance costs.
Key Data
$2 billion
— Estimated savings for New York residents and businesses if the state reforms its auto insurance market.
$200
— Minimum annual savings per vehicle for New Yorkers if insurance market reforms are implemented.
$24 billion
— Total amount New Yorkers paid in auto insurance premiums in 2024.
$1,896
— Average auto insurance premium in New York in 2023, which was 32 percent higher than the national average.
$4,000
— Average insurance policy cost in New York, which is 60 percent higher than the national average.
17 percent
— Loss incurred by insurers on auto insurance in the New York market in 2023 after expenses.
Reforming the State Environmental Quality Review (SEQR) process by exempting modest residential developments and imposing strict review deadlines would significantly lower construction costs and accelerate housing production. These changes are essential to reducing the financial burden on developers, which currently adds tens of thousands of dollars per unit in costs, thereby making New York a more affordable place to live and do business.
Recommendations related to Affordability
Exempting modest residential development from SEQR would make building housing cheaper and faster without additional costs to the government.
Exempting water facilities, parks, and resiliency retrofits would reduce the cost of projects that improve the environment.
Imposing deadlines on State and local agencies to sign off on environmental reviews would ensure reasonable and predictable timelines and avoid the death spiral of mounting cost increases.
Key Data
11%
— The increase in development costs for 500-unit projects in New York City due to local environmental review.
$82,000
— The per-unit cost increase for 500-unit projects in New York City due to local environmental review.
10%
— The cost increase for modest, low-rise residential projects caused by environmental review.
$35,000
— The per-unit cost increase for modest, low-rise residential projects in cities like Rochester or Buffalo.
$40,000
— The per-unit cost increase for modest, low-rise residential projects in the Mid-Hudson region.
$45,000
— The per-unit cost increase for modest, low-rise residential projects on Long Island.
New York State's fiscal plan faces a structural gap exceeding $15 billion, driven by spending growth that significantly outpaces inflation. To maintain affordability and competitiveness for families and businesses, the state should avoid tax increases while curbing wasteful spending in areas like economic development and aid to wealthy school districts.
Recommendations related to Affordability
The State should target programs to those in need and fund them by scaling back less impactful spending, including wasteful economic development programs and school aid to shrinking and wealthy districts.
The Governor and Legislature should make the smart choices—holding the line on taxes, prioritizing core programs, and not adding unaffordable spending—to improve New York State’s affordability.
The State should take additional steps to restrain growth in CDPAP and long-term care to help manage Medicaid spending.
The State should add to the recessionary reserves, and not use the reserves to offset recurring federal cuts.
Key Data
$15.0 billion
— Structural budget gap in the Fiscal Year 2027 Executive Budget.
$8.6 billion
— Growth in State Operating Funds spending, which is nearly twice the rate of inflation.
17.44 percent
— Tax rate on business activity in New York City due to the extended business tax surcharge.
$5.1 billion
— Total New York State spending on economic development in fiscal year 2025.
$2.6 billion
— Education aid directed to districts that self-fund a sound basic education in school year 2026.
$469 million
— Hold harmless funds provided to districts with declining enrollment.
New York's future competitiveness and affordability depend on reforming environmental reviews to accelerate housing production and lowering auto insurance costs. To ensure fiscal stability, the state must prioritize funding for programs that deliver measurable results and target assistance to those with the greatest need.
Recommendations related to Affordability
Reforming environmental review is an important step to make production of much-needed housing cheaper and faster at no cost to the State.
Lowering auto insurance costs would keep money in New Yorkers’ pockets.
The State should focus its money and management on programs that deliver results.
The Governor should target new programs to those in greatest need, fund them sustainably, and stabilize New York’s precarious future finances.
New York faces a $20 billion structural budget gap and the nation's highest tax burden, which threatens the state's economic competitiveness and affordability for residents. To address these challenges, the state should shift funding from ineffective programs to high-impact priorities while holding the line on taxes to avoid a future fiscal crisis.
Recommendations related to Affordability
The state should hold the line on taxes to avoid unnecessary risks and potential dislocation.
State leaders should deliver services that work by driving quality and efficiency with performance data and accountability.
Albany should shift dollars from lower-impact programs to affordability and other priority programs.
The state should stop protecting sacred cows like school aid to better align spending with actual needs.
The state should end aid increases to districts with declining enrollment to save $500 million annually.
The state should redirect $2.5 billion in state aid provided to wealthy districts that already self-fund a sound basic education.
The state should curb the $5 billion in economic development tax breaks and programs that fail to deliver results.
The state should protect and build Rainy Day reserves to ensure they are sufficient to weather a recession.
Key Data
$20 billion
— The size of the state's structural budget gap.
$80 billion
— The amount New York State and its localities would save by spending like New Jersey.
$5 billion
— The amount in economic development tax breaks and programs that fail to deliver results.
$2.5 billion
— The amount of state aid provided to wealthy districts that already self-fund a sound basic education.
$500 million
— The annual savings from ending aid increases to districts with declining enrollment.
17.44%
— The combined corporate tax rate in New York City.
17 is the number of days, at the time of this conversation’s recording, before Dean Fuleihan becomes First Deputy Mayor for a second time. As Mayor-Elect Mamdani turns from campaigning to the practicalities of governing, First Deputy Mayor Fuleihan will be an expert hand involved in every step. On this…
New York faces significant economic challenges, including a housing and affordability crisis, high taxes, and outmigration, which require difficult choices to manage state finances effectively. To improve the state's economic competitiveness and livability, leaders must prioritize cost-effective infrastructure, streamline housing production, and reduce the cost of doing business.
Recommendations related to Affordability
State leaders should supercharge housing production, especially downstate, by streamlining environmental review, promoting transit-oriented development, and reforming tax incentives to make housing development financially feasible.
To reduce the cost of doing business, the State should eliminate unnecessary regulations, reform the tort system to reduce insurance costs, and let the business tax surcharge expire.
State leaders should hold the line on taxes to demonstrate a commitment to a competitive future, as increasing already-high taxes threatens New York’s competitiveness and risks accelerating outmigration.
The State should leverage proven, cost-effective tax incentives to attract and retain businesses while shrinking or eliminating tax incentives and economic programs that are not proven to create jobs or increase output.
Key Data
$258 billion
— The amount the fiscal year 2026 All Funds budget exceeds.
$20 billion
— The amount by which State recurring spending exceeds its recurring receipts annually, creating a structural budget gap.
80 percent
— The amount by which New York State's per-capita Medicaid spending exceeds the national average.
4.7 percent
— The rate of New York State's population growth since 2000.
20.9 percent
— The rate of the nation's population growth since 2000.
12 percent
— The decline in public school enrollment since 2021.
791 is the number of staff the City Comptroller can employ for the vital task of auditing City agencies, managing the $306 billion pension fund, registering contracts, analyzing the budget, monitoring the economy—essentially serving as the people's check on the Mayor's office. This episode of What's the Data Point involves…
New York City's shrinking share of high-income earners, driven by high taxes and a declining value proposition, threatens the revenue needed to fund essential public services. To ensure long-term prosperity and affordability, the city must prioritize housing production, public safety, and efficient service delivery rather than relying solely on tax increases.
Recommendations related to Affordability
Expanding housing production to improve affordability is paramount to ensuring that living in New York remains feasible and attractive for a broad range of residents.
Clean and safe streets are equally vital, providing the order and quality of life that residents, businesses and visitors deserve.
High-quality and efficient public services — from transit to education — support a prosperous city, as New Yorkers should not pay top dollar for mediocrity.
Stable public finances preserve services for all New Yorkers, as expanding services without minding the store ultimately hurts those most in need.
Focusing on the fundamentals strengthens New York City’s value proposition.
Key Data
40%
— Filers with adjusted gross income over $1 million paid 40% of New York’s personal income taxes in 2022.
35%
— Between 2010 and 2022, the share of U.S. millionaires living in New York City fell 35%, from 6.5% to 4.2%.
$2.5 billion
— If the City had maintained its 2010 share of millionaires, it would have collected $2.5 billion more in personal income tax revenue in 2022 alone.
91,000
— In 2024, 91,000 more residents moved out of the city to other parts of the U.S. than moved in.
14.776%
— New York State’s and City’s combined top marginal rate, 14.776% for the highest earners, tops the nation.
New York's Draft State Energy Plan fails to provide a comprehensive analysis of the financial impacts of the energy transition, leaving the true costs to households and businesses unclear. The plan relies on unrealistic assumptions and fails to account for recent federal policy changes, necessitating a significant revision to ensure economic competitiveness and ratepayer affordability.
Recommendations related to Affordability
The State should quantify the costs and how they would be allocated to State government, other public entities, businesses, and households.
The State should quantify the impact on energy costs paid by businesses, by sector and geography.
The State should quantify the impact on energy costs for households at all income levels, and any impacts of the transition on the cost of goods and services.
The State should provide realistic estimates with transparent assumptions regarding the energy transition.
Key Data
30 percent
— The portion of project costs that can be covered by Production and Investment Tax Credits for clean energy.
$146 per MWh
— The contractual strike price for one of the State's current Offshore Wind Renewable Energy Credit (OREC) contracts.
$155 per MWh
— The contractual strike price for one of the State's current Offshore Wind Renewable Energy Credit (OREC) contracts.
$125 per MWh
— The assumed cost of offshore wind in 2025 used in the Draft State Energy Plan.
The Metropolitan Transportation Authority faces significant structural budget gaps, necessitating the approval of proposed fare and toll increases to maintain reliable service. To mitigate the impact on riders, efforts to promote the Fair Fares NYC program for those struggling with transit costs must be prioritized alongside continued expense management and revenue collection.
Recommendations related to Affordability
The MTA board should approve the proposed fare and toll increases to support ongoing operations and protect riders from unexpected price hikes.
The MTA should promote Fair Fares NYC to assist those who struggle to afford public transit.
The MTA must continue to rein in expenses to ensure long-term financial stability.
The MTA should collect the revenue it is due by continuing efforts to reduce fare and toll evasion.
The MTA and labor unions should pursue work rule changes that increase productivity and operational flexibility during upcoming contract negotiations.
Key Data
$345 million
— The MTA's projected operating budget gap in 2027.
$800 million
— The MTA's annual structural budget gap.
$350 million
— The annual revenue expected from the proposed fare and toll increases.
$1 billion
— The estimated amount lost to fare and toll evasion last year.
$900 million
— The estimated amount the MTA is on track to lose to fare and toll evasion this year.
$500 million
— The amount in recurring operating efficiencies the MTA has found over the past several years.
New York City's housing affordability crisis is driven by an extreme undersupply of units, exacerbated by construction costs that are among the highest in the world due to labor, materials, and regulatory hurdles. To address this, the city and state must streamline permitting, modernize building codes, and reform liability laws to reduce development costs and increase housing production.
Recommendations related to Affordability
The City and State should align construction codes and regulations with best practices from other global cities to reduce hard costs.
The State should repeal New York’s exceptional Scaffold Law and adopt the liability standards used in every other state in the country.
The City and State should focus on predictability and simplicity over site-by-site approval processes and complexity, with speedy permitting and as-of-right approvals.
The State should reform environmental review laws to exempt beneficial projects.
The City should rezone to increase opportunities for development to chip away at the scarcity that drives up prices.
Key Data
1.4%
— The citywide vacancy rate in New York City, which is the lowest it has been since 1968.
$3,730
— The record-high asking rent for vacant apartments in New York City as of July.
23%
— The additional cost to build affordable housing projects in New York City that are subject to prevailing wage requirements.
7%
— The minimum increase in total development costs attributed to New York's Scaffold Law.
$82,000
— The estimated increase in hard and soft costs per unit caused by a two-year discretionary review process.
50,000 units
— The minimum number of housing units that need to be produced annually to help bend the curve on housing costs.
Fare and toll evasion cost the Metropolitan Transportation Authority approximately $1 billion in 2024, exacerbating an $800 million structural operating budget gap that threatens the system's fiscal stability. To address these losses and ensure equitable access, the MTA should continue its multi-faceted enforcement approach while evaluating the effectiveness and potential expansion of the Fair Fares NYC program.
Recommendations related to Affordability
The MTA should refine and continue a multi-faceted approach to reducing fare and toll evasion, including improving enforcement, educating riders on the importance of fare payment, and better securing the transit system environment.
The MTA should accelerate the rollout of new faregates funded in the 2025 to 2029 Capital Plan.
The MTA should accelerate the rollout of proof-of-payment to allow EAGLE Team inspectors to enforce fare payment on local and express buses without having to directly witness fare evasion.
The MTA should publish comprehensive and regular data on fare and toll evasion to allow the public to assess the MTA’s success against its goals.
The MTA should work with the City to assess the cost-effectiveness of deploying police officers to enforce fare payment.
The MTA should work with the City to assess the effectiveness of the Fair Fares Program and consider expansion to address the low take-up of the program.
Key Data
$1 billion
— Estimated revenue lost to fare and toll evasion in 2024.
$800 million
— The MTA's structural operating budget gap that reducing evasion is essential to close.
$918 million
— The total loss to subway and bus fare evasion in 2024.
330
— Number of subway fares evaded every minute during 2024.
710
— Number of bus fares evaded every minute during 2024.
44 percent
— The bus fare evasion rate in the first quarter of 2025.
New York City's land use decision-making process creates significant barriers to housing production, including multi-year approval timelines and added costs of up to $82,000 per unit. Approving the proposed ballot questions would streamline these processes, modernize administrative systems, and help address the city's dire housing shortage.
Recommendations related to Affordability
New Yorkers should vote yes on Question 2, which would create fast track reviews for affordable housing through the Board of Standards and Appeals and for mixed-income residential projects.
New Yorkers should vote yes on Question 3, which would create an Expedited Land Use Review Procedure (ELURP) for three types of zoning proposals to streamline development.
New Yorkers should vote yes on Question 4, which would create an Affordable Housing Appeals Board to balance citywide needs with neighborhood concerns.
New Yorkers should vote yes on Question 5, which would modernize the administration of the City Map to increase government efficiency.
Key Data
2 to 3 years
— Time required for private rezoning application approval.
$82,000
— Added cost to each housing unit in 2025 dollars due to the current land use process.
8,000
— Number of individual paper maps currently used to administer the City Map.
30 percent
— Maximum increase in residential capacity allowed in medium- and high-density districts under the proposed ELURP.
Download the Presentation The New York State and New York City budgets are unaffordable and unprepared both for a recession and for federal budget cuts that will start hitting this fiscal year and grow in the future. Check out CBC’s New York State and New York City Fiscal…
New York City faces a significant population decline as residents leave for other parts of the country due to high taxes, housing costs, and concerns about safety and quality of life. To restore competitiveness and ensure long-term prosperity, the city must prioritize fiscal discipline, increase housing production, and maintain tax stability.
Recommendations related to Affordability
Leaders must choose to hold the line on taxes to improve the city's affordability.
The city should pull out all the stops to boost housing production to address the city's affordability crisis.
Policymakers should use only the tax incentives proven to grow our economy to ensure the city remains affordable and competitive.
Key Data
100,000
— Net residents lost by New York City to Florida between 2018 and 2022, driven by factors including affordability, safety, and high taxes.
$13.7 billion
— Personal income lost by New York City to Florida between 2018 and 2022 as residents departed due to concerns over affordability and high taxes.
Smart Choices, Better Future Call to Action New York is at a critical juncture. Smart choices now build a better future for all New Yorkers. New York State and City should get their finances in order, deliver services that work, ensure New York is affordable and safe, and build infrastructure…
The document captures diverse mayoral candidate strategies for addressing New York City's affordability crisis, ranging from property tax reform and streamlined housing development to the management of housing voucher programs. These proposals reflect a shared focus on balancing fiscal sustainability with the urgent need to support working families and mitigate the rising cost of living.
Recommendations related to Affordability
I will create revenue by recovering $2B+ in unpaid city fines & fees; taxing vacant luxury apts; ending corporate property tax exemptions; cutting excessive NYPD overtime & property tax reform for MSG.
I’ll establish a framework for growth and affordability, & streamline ULURP for projects that advance that framework, including requiring a Council vote to reject a project, rather than to pass it.
The City must embrace equitable property tax reform & ensure the top 1% of NYers pay their fair share.
I support lowering property taxes for homeowners & working families—not for big developers gaming the system.
I would seek to keep the overall tax yield constant but with shifting the relative burdens.
Key Data
$1.2 Billion
— Cost of the CityFHEPS housing voucher program in fiscal year 2025.
$111 Billion
— Total value of the City's five-year capital program.
$38K
— Amount the City currently spends per student in public schools.
$2B+
— Amount of unpaid city fines and fees that could be recovered to create revenue.
New York City residents are increasingly dissatisfied with the city's quality of life, with 76 percent citing affordability as a primary reason for considering moving away. To address these concerns and improve resident satisfaction, the city must prioritize targeted policies and smart fiscal management in areas like housing, safety, and infrastructure.
Recommendations related to Affordability
The City administration should focus on housing, infrastructure, and cleanliness to address resident dissatisfaction and affordability concerns.
The City should target improvement efforts, policies, programs, and resources toward areas of persistent dissatisfaction, including affordability.
Ensuring public safety, improving services, and enhancing quality of life requires smart fiscal, management, and investment choices to address affordability challenges.
Key Data
76%
— The share of New Yorkers who cite affordability as a reason for considering moving out of the city.
34%
— The percentage of New Yorkers who rate the city's quality of life as excellent or good in 2025.
27%
— The percentage of residents who rate government services as excellent or good.
11%
— The percentage of residents who rate government spending as excellent or good.
New York City faces significant pressure from high taxes and costs that threaten to drive residents and businesses away. To maintain its competitive edge, the city must prioritize tax reform, streamline housing production, and modernize public housing to ensure long-term affordability and livability.
Recommendations related to Affordability
The next mayor should hold the line on taxes to ensure residents and businesses who already pay the most are not pushed out.
The city should reform property taxes to boost fairness and increase the housing supply.
The city must supercharge housing production and affordability by streamlining approvals, modernizing codes, and targeting vouchers.
The city should modernize NYCHA by cutting costs, speeding up repairs, and quickly unlocking capital through RAD/PACT and the Preservation Trust.
The city should use tax incentives that work and scrap the ones that do not.
Key Data
$115 billion
— The annual amount the City spends, which necessitates efficient service delivery to maintain affordability.
The Fiscal Year 2026 Executive Budget increases spending to an unsustainable level, with proposed costs reaching $121 billion and future budget gaps projected between $8 billion and $10 billion. To ensure long-term fiscal stability, the City must prioritize high-impact programs and increase efficiency rather than continuing the practice of underbudgeting.
Recommendations related to Affordability
The City needs to hold spending to an affordable level by prioritizing high impact programs, shrinking others, and increasing efficiency.
The Mayor and City Council should break the habit of underbudgeting and adding unaffordable spending during negotiations.
The City should set aside money to address the next recession and likely reductions in federal funding.
The City should add $1 billion in next year’s General Reserve to soften the first blows of federal cuts.
The City should add $2 billion to the Rainy Day Fund to prepare for potential economic downturns.
Key Data
$121 billion
— Fiscal year 2026 proposed costs, when adjusted for expenses prepaid in the current year and expected costs not funded.
$8 billion to $10 billion
— Projected future budget gaps once underbudgeted expenses are added.
$3 billion
— The amount the fiscal year 2026 budget is short to fund existing service levels, such as FHEPS, overtime, and public assistance.
$1 billion
— The amount recommended to be added to next year’s General Reserve to soften the impact of federal cuts.
$2 billion
— The amount recommended to be added to the Rainy Day Fund.
48,000 is the number of new homes to be created when we add together the 40,000 that should be enabled by 5 neighborhood rezonings and the current proposed plan to redevelop the Brooklyn Marine Terminal. New York must dramatically increase housing production if it is going reduce its affordability problems…
$252 billion is the Governor Kathy Hochul’s New York State Executive Budget for Fiscal Year 2026. How much does it matter that New York State and its localities are already #1 in taxes and #2 in spending nationwide? On today’s episode we talk with New York State’s Budget Director, Blake…
New York State faces a $15.6 billion structural imbalance that threatens the long-term viability of proposed tax cuts and credits unless spending is restrained elsewhere. To maintain affordability and critical services, the state must restructure government operations, implement major savings plans for Medicaid and education aid, and address the $33 billion funding gap in the MTA’s capital plan.
Recommendations related to Affordability
The State cannot afford expanded child tax credits and middle-class tax cuts in the long run unless it restrains spending elsewhere.
The State should take the opportunity to use its surplus funds to restructure State government to be lower cost and higher quality, pay cash for capital projects, and further bolster reserves.
Major savings plans are needed to make Medicaid and education aid programs affordable so we can sustain critical services.
Key Data
$15.6 billion
— The amount of the State's current structural imbalance.
$33 billion
— The funding hole in the MTA’s capital plan that lacks a proposal to be filled.
80,000. That’s the number of additional new housing units the Adams’ Administration hopes will be developed over the next 15 years thanks to the City of Yes for Housing Opportunity. The City Council votes this week on Mayor Eric Adams’ plan to tackle the housing crisis. However, that is not…
New York City's median household income reached $76,577 in 2023, while the consumer price index in the New York area experienced a significant 6.1% increase in 2022. Additionally, 18.2% of the city's population lived below the federal poverty threshold in 2023, highlighting ongoing economic challenges.
Key Data
$76,577
— The median household income in New York City in 2023.
6.1%
— The consumer price index change in the New York area in 2022.
18.2%
— The percent of the New York City population living below the federal poverty threshold in 2023.
$117,040
— The annual wage rate in New York City in 2024.
New York City residents report a significant decline in quality of life and satisfaction with city services, with only 30 percent rating quality of life as excellent or good compared to 50 percent in 2017. This dissatisfaction is exacerbated by the city's high costs and affordability challenges, prompting calls for the government to prioritize high-impact spending and provide tax relief to middle-income households.
Recommendations related to Affordability
The City should prioritize spending on high-impact programs that deliver positive results and tackle the range of related policy challenges.
The City should consider how to reduce spending and offer tax relief to middle-income households, who are feeling the City’s unaffordability acutely.
The Administration should incorporate this type of standardized, statistically valid feedback into its management systems and policy development to better target its efforts to improve services.
Key Data
30%
— New Yorkers who rate the quality of life as excellent or good in 2023, down from 50% in 2017.
11%
— New Yorkers who believe the government is spending tax dollars wisely, down from 21% in 2017.
46%
— Decrease in satisfaction for households making between $100,000 and $200,000.
34%
— Decrease in satisfaction for households making over $200,000.
New York's proposed Cap-and-Invest program must be carefully designed to balance ambitious climate goals with economic competitiveness, ensuring that costs to businesses and households are minimized while maximizing the efficiency of emissions reductions. By utilizing market-based mechanisms like linkage with other programs, broad sectoral coverage, and transparent revenue management, the state can achieve its environmental targets without imposing prohibitive financial burdens.
Recommendations related to Affordability
Allow and pursue linkage with other cap-and-invest programs to enhance cost-effectiveness by providing a larger pool of emissions reduction opportunities.
Keep sectoral coverage as broad as possible to spread the cost of emissions reduction, minimizing the financial burden on any single sector.
Maintain flexibility in compliance through trading, banking, and verifiable offsets to ensure that the Cap-and-Invest program behaves as a true market, fostering efficient emissions reductions.
Allocate revenue on-budget, segregating it for uses that promote cost-effective emissions reduction and ensure accountability.
Regularly monitor, publicly report, and evaluate program data and modify the program based on evidence to improve accountability and inform necessary programmatic modifications.
Align the program with other CLCPA-related regulations to minimize overlapping regulatory costs and improve overall policy effectiveness.
Finalize clear and comprehensive rules with adequate time for businesses to prepare to reduce uncertainty and facilitate a smooth transition for the carbon market.
Key Data
$38 billion
— Total revenue generated by California's cap-and-invest system since it began operating in 2013.
$900 million
— The low end of California's annual auction proceeds since 2016.
$4 billion
— The high end of California's annual auction proceeds since 2016.
65 percent
— Portion of California's auction proceeds currently distributed to State agencies to support transportation and community programs.
3 percent
— Estimated increase in the price of allowances if facility-specific caps are implemented.
$6 billion
— The size of the Health Care Reform Act (HCRA) pot of special revenue generated chiefly by taxes on health insurance.
New York City's reliance on widespread public transit helps offset high housing costs, making the region relatively more affordable for lower-income households compared to 20 peer cities. While fare and toll increases are necessary for fiscal health, the transit authority must prioritize efficiency and service quality to ensure residents do not pay more than required.
Recommendations related to Affordability
The MTA should revisit the 4 percent yield to see if it is sufficient for ongoing fiscal stability.
For those in need, the MTA should maintain and market Fair Fares as a critical part of the financial ecosystem.
The MTA should be held accountable for the quality and reliability of its service, especially given the massive influx of new resources.
The MTA should be supported in reducing fare evasion to avoid unnecessary fare and toll increases.
The MTA and union leadership should implement changes to increase productivity and flexibility, including expanding One-Person Train Operation and modifying shift parameters.
Key Data
11th
— New York's rank among 20 peer cities in a household’s combined housing and transportation costs.
3rd
— New York's affordability ranking for an individual living at the poverty line.
6th
— New York's affordability ranking for a single-parent family.
8th
— New York's affordability ranking for a retired couple.
32 percent
— Portion of the 2023 MTA budget funded from fares.
New York State's ongoing budget delay threatens to exacerbate the housing crisis and hinder economic growth, as the state continues to underproduce necessary housing. Addressing these issues requires adopting a comprehensive housing plan that streamlines development and sets clear growth targets to improve long-term affordability for residents.
Recommendations related to Affordability
The State’s leaders should enact a Fiscal Year 2024 Budget that makes New York more competitive, affordable, and fiscally stable.
The State should enact a version of the Governor’s sensible, flexible, evidence-based approach to growth targets and streamlining development, along with the other elements of the Governor’s housing plan.
The Legislature should offer solutions that work to improve affordability.
The New York City Housing Authority faces significant financial strain due to a decline in rent collection rates, which have dropped from 90% to below 65%, resulting in over $450 million in arrears. To address these challenges, the State should provide one-time aid only if it is offset by other savings and conditioned on a plan to restore rent collection to pre-pandemic levels.
Recommendations related to Affordability
The State should condition any one-time aid on NYCHA devising and implementing a plan to return its rent collection rate to pre-pandemic levels.
Any aid provided to address arrears should be offset by savings found elsewhere to avoid exacerbating the State’s long-run fiscal instability.
NYCHA should fix its deteriorating buildings through the Rental Assistance Demonstration (RAD) and the Preservation Trust.
The State could help reduce costs by reforming the Scaffold Law.
The federal government should support the housing authority by increasing funding for Tenant Protection Vouchers.
Key Data
90 percent
— The previous norm for NYCHA's rent collection rate before the pandemic.
65 percent
— The level below which NYCHA's rent collection rate has fallen.
$450 million
— The amount of accumulated rent arrears currently owed to NYCHA.
$15 billion to $20 billion
— The size of the State's structural deficit.
59,811
— The number of households that requested rent decreases between March 2020 and February 2022.
35 percent
— The portion of occupied units that requested rent decreases between March 2020 and February 2022.
The Metropolitan Transportation Authority's financial stabilization plan relies too heavily on New York City taxpayers and businesses, necessitating a more balanced approach that includes recurring state contributions and labor-driven productivity improvements. While periodic fare increases are necessary to maintain system stability, the current proposal requires reallocation to ensure the financial burden is distributed more equitably across the region.
Recommendations related to Affordability
Productivity improvements, including changes in MTA operations that require agreement from labor, should constitute at least half of the gap-closing plan.
A recurring State contribution should be included in the stabilization plan, understanding that City taxpayers are major contributors to State receipts.
The balance of the financial plan should be appropriately allocated among those in the MTA region to avoid placing a disproportionate burden on New York City.
The MTA should proceed with resuming regular biennial fare increases to maintain price sufficiency and fiscal stability.
Key Data
$800 million
— Annual revenue generated by increasing the Payroll Mobility Tax top rate from 0.34 percent to 0.50 percent.
$500 million
— Annual cost required from New York City's operating budget for certain MTA expenses.
$2.9 billion
— Potential annual savings identified from operational reforms like one-person-train-operation and proof of payment fare collection.
5.5 percent
— The rate of the planned fare and toll increases.
$640 million
— The estimated portion of the $800 million Payroll Mobility Tax increase likely to come from City businesses.
$300 million
— The one-time appropriation provided from the State budget.
1 in 3 is the number of households in New York City that are severely rent burdened. That means nearly 600,000 households are spending more than half of their monthly income on rent, electricity, and heat. At a recent CBC Trustee event, Jessica Katz, NYC's Chief Housing Officer, discussed how…
The NYC Ferry system is highly subsidized compared to other transit options, necessitating a shift toward variable pricing to ensure that subsidies are targeted toward those with the greatest need for affordable transit. Adjusting fare structures, including higher prices for premium routes and weekend service, will help align the system's costs with its value while maintaining support for low-income commuters.
Recommendations related to Affordability
The EDC should strongly consider a single-ride ticket price closer to the MTA’s express bus fare.
The EDC should implement higher fares on weekends and for the longer, more expensive routes.
The EDC should reassess the most subsidized routes to determine if they provide the broad-based value and effectiveness the public deserves from its resources.
The EDC should evaluate the impact of the new fare system on NYC Ferry’s ridership and finances, and if appropriate, increase fares or change routes and timetables.
The EDC should ensure that the remaining subsidy above what is provided to other transit users is well targeted to those in the greatest need of transit options and affordability.
New York City faces an immense housing shortage, with estimates indicating a need for 560,000 new units by 2030 to accommodate population growth and address the affordability crisis. To meet this demand, the city must implement broad-based rezonings, reform property tax and construction codes, and set clear, measurable goals for total housing production across all income levels.
Recommendations related to Affordability
The City should set goals for total housing production (inclusive of both income-restricted and market-rate units), the net growth in housing units citywide, and the net change by community district.
Doubling production will require broad-based rezonings to increase as-of-right development capacity in every neighborhood.
The City should track and publish outcome metrics, such as the share of rent burdened households or the homeownership rate for various groups, to monitor the effectiveness of both demand- and supply-side policies.
The City should reform the property tax system, building and construction codes, insurance laws, and the Multiple Dwelling Law, in order to make housing less expensive to build and operate.
The city's housing plan should quantify current and future housing needs — for all types of housing, for all income levels and across all neighborhoods.
Key Data
560,000
— New York City needs 560,000 more housing units by 2030 to meet existing needs and future population growth.
50,000
— Meeting housing needs would require permitting more than 50,000 units annually, which is twice as many as issued in recent years.
20%
— Under current zoning, only 20% of the city’s residential lots have enough capacity to make it worthwhile to develop.
22,000
— The city has 22,000 vacant positions that could be utilized to improve basic operations and housing services.
40%
— New York City issues 40% fewer permits for housing units per resident than San Francisco.
New York City faces an immense housing shortage, requiring the construction of 560,000 new units by 2030 to address the affordability crisis and accommodate population growth. To meet this demand, the city must implement a comprehensive housing plan that includes broad upzoning, streamlined approval processes, and property tax reform to incentivize development across all neighborhoods.
Recommendations related to Affordability
The city’s housing plan should quantify current and future housing needs for all types of housing, for all income levels and across all neighborhoods.
The city should set ambitious but achievable production goals, identify needed operational and policy actions and responsible parties, set implementation milestones, and commit to tracking publicly both the process and results.
The city must speed up approval times for zoning certifications, building permits and certificates of occupancy, fill affordable apartments more quickly, and ensure rental housing vouchers get utilized.
The city needs to zone for growth by changing zoning broadly, across the city, to increase as-of-right development capacity.
The city should implement property tax reform and the right tax and other incentives to encourage mixed-income development.
The city should allow the Department of City Planning to fast-track projects that it certifies as advancing the city’s strategic planning goals.
Key Data
560,000
— New York City needs <b>560,000 more housing units by 2030</b> to meet existing needs and future population growth.
50,000
— Meeting housing needs would require <b>permitting more than 50,000 units annually</b>, which is twice as many as issued in recent years.
40%
— New York City issues <b>40% fewer permits for housing units per resident</b> than San Francisco.
22,000
— The city has <b>22,000 vacant positions</b>, which hinders the ability to improve basic operations like speeding up approval times.
20%
— Under current zoning, only <b>20% of the city’s residential lots</b> have enough capacity to make it worthwhile to develop.
New York City's 421-a property tax exemption is essential for rental housing development, as high construction and operating costs make projects financially unfeasible without government assistance. Replacing this program with the proposed Affordable Neighborhoods for New Yorkers (ANNY) program requires modifications to better reflect neighborhood market conditions and ensure the continued production of both market-rate and affordable housing.
Recommendations related to Affordability
State lawmakers should better tailor affordability options to reflect different market conditions by creating new options for mid-rise projects outside the Prime Development Area or offering Option B to all projects outside the Prime Development Area.
The City should track and evaluate program usage to inform successor programs by creating a database of project recipients and reporting on overall residential development trends.
State lawmakers should work with the City to align the incentive with other housing programs by modifying ANNY and the Mandatory Inclusionary Housing program to be compatible and clarifying rules for projects receiving bond financing or other subsidies.
State lawmakers should authorize an as-of-right tax exemption designed to foster rental housing development, minimize disruption of land and development markets, and help the City meet its affordable housing production goals.
Developers should submit a simple, non-binding declaration of intent to use 421-a earlier in the process, such as when they start the housing lottery process with HPD.
Key Data
50%
— The cost to operate a multifamily building in New York City is higher than the national average.
30%
— New York City's property taxes as a percentage of rental income, compared to 13 percent elsewhere in the country.
75%
— The increase in rents required to generate a reasonable rate of return without the tax exemption, holding other costs constant.
3.7%
— The average annual increase in New York City construction costs since 2010.
8%
— The increase in construction costs between February 2021 and February 2022.
$9,800
— The median Manhattan rent needed to generate a 5 percent yield on cost without the 421-a tax exemption.
Increasing housing production through zoning changes, such as allowing denser transit-oriented development and accessory dwelling units, is essential to improving affordability in New York. Additionally, stabilizing the city's public housing stock requires approving the Preservation Trust bill, enacting procurement reforms, and expanding financial support for public-private partnerships.
Recommendations related to Affordability
The State should require local governments to zone for denser transit-oriented development to increase regional housing supply.
The State should legalize accessory dwelling units to help meet the diverse housing needs of New Yorkers.
The State should lift the cap on residential floor area ratios to give New York City more tools to stimulate housing production.
The State should encourage commercial-to-residential conversions to provide flexibility in stimulating housing production.
The State should approve the proposed Preservation Trust bill to help stabilize the future of NYCHA.
The State should enact procurement reform to reduce NYCHA’s costs.
The State should increase financial support for Rental Assistance Demonstration (RAD) public-private partnerships to bring in capital and new management.
Key Data
110,000
— Number of public housing units slated for renovation through the proposed Preservation Trust partnership.
New York State could significantly reduce its uninsured population by implementing strategies such as state-funded premium assistance, a state-sponsored public option, and enhanced outreach and enrollment efforts. These measures would improve health outcomes and economic security for residents while addressing the financial barriers that currently prevent over 1 million New Yorkers from obtaining health insurance.
Recommendations related to Affordability
New York could provide additional subsidies to reduce the cost of individual market plans for more people.
New York could procure and offer a plan through the State Marketplace with lower premiums and less cost-sharing than plans currently available.
New York could use a similar strategy to create a State-only funded Essential Plan for low-income immigrants.
New York could provide additional funding for the State Navigator program to target areas where fewer people are insured than average.
New York could adopt similar policies to Massachusetts, such as providing a special enrollment period for people who are buying Marketplace plans for the first time.
Key Data
$803 million
— Estimated annual State cost for the deepest premium subsidy design, which would result in 92,000 newly insured individuals.
1 million
— Number of New Yorkers who remained uninsured in 2019.
5.2 percent
— New York's uninsured rate in 2019.
$345 million
— Estimated annual net State cost for a State-funded Essential Plan for low-income immigrants, which would provide insurance for 46,000 new enrollees.
65,000
— Estimated number of uninsured people who would obtain coverage if New York increased insurance rates in areas with high numbers of uninsured to the state average.
New York City's property tax system requires comprehensive reform to address inequities in tax burdens among residential, rental, and commercial properties. Implementing a transparent tax rate setting process, clarifying assessment methods, and detailing relief mechanisms like homestead exemptions and circuit breakers are essential to improving fairness and affordability.
Recommendations related to Affordability
Develop a simple and transparent tax rate setting process that eliminates the function of class shares and distributes the levy based on clearly articulated policy rationales for the differential levels of taxation.
Expand the scope to address disparities within the rental and commercial classes by conducting sales ratio studies and modifying models to ensure consistency.
Provide details on how the homestead exemption and circuit breaker should be structured to ensure they effectively address property tax affordability.
Clarify how assessed values for the new residential class will be set to resolve conflicts between phasing-in market value changes and assessing properties at 100 percent of market value.
While broadband availability has expanded across New York, a significant digital divide persists based on household income. Less than 5 percent of households earning over $75,000 lack an internet subscription, compared to more than one-third of households earning less than $20,000.
Key Data
$75,000
— Income threshold for New York State households where less than 5 percent do not have an internet subscription.
$20,000
— Income threshold for New York State households where more than one-third do not maintain an internet subscription.
$500 million
— Amount provided in grants by the New NY Broadband Program beginning in 2016 to support private investments.
New York City's housing production has failed to keep pace with demand, leading to rising costs, overcrowding, and a decline in affordable units. To address this, the city and state must implement comprehensive strategies, including zoning reforms, building code modernization, and property tax restructuring to incentivize new construction.
Recommendations related to Affordability
New York City should have a citywide housing plan that quantifies the city’s current and future housing needs at all market segments, identifies the gap between these needs and existing zoning capacity, and sets ambitious but achievable citywide production goals.
New York City should update the zoning code to increase opportunities for as-of-right development throughout the city, such as increasing density near transit and along commercial corridors.
The City should continue to revise outdated or unique building code requirements that increase costs and adopt strategies to encourage construction industry innovation.
New York State lawmakers could require municipalities to zone for both more housing and a wider variety of housing, including accessory dwelling units and multifamily residences, particularly in areas near commuter rail stations.
State lawmakers should pass reforms to make the City’s property tax system more equitable and efficient, including provisions to reduce the high tax rate on multifamily rental buildings relative to single family homes.
Key Data
206,000
— Number of permits issued for new housing units in New York City during the 2010s.
0.19
— Number of housing units added for every net new job created in New York City between 2010 and 2018.
20%
— Percentage of residentially zoned lots in New York City that are potential as-of-right development sites.
$1.6 Billion
— Cost of 71,095 tax exemptions in fiscal year 2019 in foregone City tax revenue.
7%
— Share of all permitted units represented by two- to four-unit properties since 2010.
2.55
— The classification ratio, or the difference between the effective tax rates on apartments and single-family homes in New York City.
70 million is the number of free meals distributed by the NYC since mid-March, when the COVID-19 pandemic took hold. Today we talk to members of the public and private sector teams that made this success happen: Sanitation Commissioner and "Food Czar" Kathryn Garcia, and Cas Holloway of Unqork, the…
CBC hosted a special panel discussion of prominent fiscal experts who helped New York overcome some of the most dire crises of the past. They provided insights and lessons from past experiences to help us understand and navigate the looming crisis. Stephen Berger Chairman, Odyssey Investment Partners; Former Executive Director,…
New York State's Health Care Reform Act (HCRA) taxes significantly increase health insurance premiums for commercial plans, costing the average family approximately $1,000 annually. Because these costs are often passed on to employees through reduced wages, policymakers should avoid increasing these taxes while balancing the state's Medicaid budget.
Recommendations related to Affordability
HCRA tax increases should be avoided as a strategy for balancing the Medicaid budget because that action increases the cost of health insurance premiums and likely depresses wage growth for a majority of New Yorkers.
Lawmakers should review HCRA’s role in health care funding and its impact upon privately insured New Yorkers as they evaluate the State’s five-year financial plan.
HCRA taxes should not be increased as part of this year's budget negotiations.
Key Data
$6 billion
— Annual revenue generated by HCRA taxes.
4.3 percent
— Combined impact of the Surcharge and Covered Lives Assessment on health insurance premiums.
$1,000
— Statewide average annual cost of HCRA taxes for a family health insurance plan.
$350
— Statewide average annual cost of HCRA taxes for individual health insurance coverage.
80 percent
— Portion of HCRA revenue used to pay for the State's share of Medicaid in recent years.
$700 million
— Annual amount the State government pays via HCRA taxes through the Surcharge on Medicaid and insurance premiums for its workforce.
New York City's affordability is bolstered by lower transportation costs that offset high housing expenses, though this competitiveness is threatened by potential transit cost increases and rising rents. To maintain this balance, the city must address housing supply constraints and ensure the transit system remains affordable and efficient for lower-income residents.
Recommendations related to Affordability
New York City should solve the MTA’s fiscal and operational deficits to avoid significantly increasing the cost of transportation to households.
The city should successfully implement programs like Fair Fares to help buoy transportation affordability for lower-income households.
New York City should consider strategies and policies to address housing supply and alleviate housing cost pressures to maintain competitiveness.
Key Data
$1,778
— Monthly housing costs for the median household in New York City.
$832
— Monthly transportation costs for the median household in New York City.
45.3%
— Percentage of income the median household in New York City spends on housing and transportation combined.
6.2%
— Growth in inflation-adjusted rents in New York City between 2014 and 2017.
$69,211
— Median annual household income in New York City.
87.9%
— Percentage of pre-tax and pre-transfer income an individual living at the federal poverty line in New York City spends on housing and transportation.
The Access-A-Ride program faces significant financial pressure as total operating costs are projected to grow to $691 million by 2023, while fare revenue covers only 4% of these expenses. To address these rising costs, proposals include increasing the City's financial contribution, requiring passengers to pay a larger share for enhanced services, or limiting the number of on-demand trips per user.
Recommendations related to Affordability
The City should work with the MTA to assure that Access-A-Ride will achieve firm financial footing while providing a cost-effective and efficient service that offers greater mobility to disabled riders.
Part of that solution may be to ask passengers to pay a greater share of the cost for the enhanced service of the for-hire vehicle origin to destination trips, as the MTA has proposed.
Another method the MTA has proposed is to constrain costs by limiting the number of on demand for-hire vehicle trips a passenger may take.
Key Data
$474.7 million
— 2017 total cost of the Access-A-Ride program.
$17.5 million
— 2017 fare revenue for the Access-A-Ride program.
$150 million
— 2018 City share of the Access-A-Ride operating deficit.
$691 million
— MTA forecast for total operating costs for the program in 2023.
$361 million
— Cumulative cost increase to the City from 2020 to 2023 under the MTA's proposed formula change.
4%
— Percentage of the program's total operating cost represented by fare revenue.
New York faces a significant fiscal imbalance driven by accelerating spending, particularly in Medicaid and school aid, which threatens the state's economic competitiveness. To address this without further increasing the already nation-leading tax burden, the state must implement structural spending reforms and prioritize fiscal stability.
Recommendations related to Affordability
Reconstitute the Medicaid Redesign Team to identify savings in Medicaid spending.
Focus education aid on needy districts to fund fully a sound basic education.
Reduce unproductive economic development program spending to improve fiscal health.
Consider reforms to retiree health benefits to reduce post-employment benefit costs.
Exercise powers granted under the Medicaid global cap to prevent Medicaid spending from exceeding budgeted amounts.
Key Data
$6.1 billion
— The projected budget gap for the next fiscal year.
48%
— The amount by which New York's State and local tax burden exceeds the national average.
$4.4 billion
— The amount New York spends annually on economic development programs with little evidence of results.
$28.8 billion
— The actual four-year budget gap, which is understated in official reporting.
12.7%
— The top personal income tax rate for New York City residents.
8.49%
— The average combined State and local sales tax rate in New York.
New York City's property tax system requires reform to improve equity and fairness, as it currently generates nearly $30 billion annually and funds a significant portion of city spending. Implementing changes like market-value assessments and income-based tax rebates could help stabilize tax burdens and improve housing affordability for residents.
Recommendations related to Affordability
To ease burdensome tax bills, rebates of owner-occupied residential property taxes should be provided based on household income to directly assist residents struggling with high housing costs.
Full market value should be the starting point for assessing the tax base, using differential effective tax rates to favor residential properties and reduce the tax burden on homeowners.
Stability of the property tax should be achieved by phasing-in market value changes over three years for all parcels to prevent abrupt and unaffordable tax spikes.
Valuation for tax purposes should reflect actual real estate market value to ensure property taxes are based on accurate and transparent assessments.
Move cooperatives and residential condominiums to Class 1 with one-, two-, and three-family homes to improve equity and fairness in the tax system.
Key Data
$30 billion
— Amount of revenue the property tax will generate in fiscal year 2020.
32 percent
— Portion of all City revenues generated by the property tax in fiscal year 2020.
6.2 percent
— Average annual growth of property tax revenue since fiscal year 1999.
The NYC Ferry system relies on a high taxpayer subsidy, with a per-ride cost of $9.34 and a fare recovery ratio of only 24 percent, which is significantly lower than other major public ferry systems. Because the current flat fare structure does not align with operating costs, the system's operating strategy and pricing model require reconsideration.
Recommendations related to Affordability
The high cost of the NYC Ferry, both in per-trip subsidy and relative to other public ferry systems, should prompt a reconsideration of the operating strategy and pricing model.
Key Data
$9.34
— NYC Ferry's per-ride subsidy in fiscal year 2019.
24%
— NYC Ferry's operating cost recovery ratio in 2019.
$2.75
— NYC Ferry's flat fare.
$9.88
— New Orleans Ferry per-trip subsidy.
14%
— New Orleans Ferry recovery ratio.
$33
— Amount the Nantucket/Martha’s Vineyard ferry earns per trip.
Implementing non-exclusive commercial waste zones in New York City would maintain competition and keep service costs low while still achieving significant reductions in vehicle miles traveled. This approach avoids the risks associated with exclusive zones, such as reduced incentives for efficiency and the potential for costly city-run collection services.
Recommendations related to Affordability
We urge enactment of non-exclusive waste zones, which will achieve most of the benefits resulting from a zone system while maintaining competition and customer service, and minimizing fiscal risk to the City.
We urge the City Council to amend Intro 1574 to permit DSNY to award contracts to three to five carters per zone.
Key Data
50%
— Non-exclusive zones are projected to reduce vehicle miles traveled (VMT) by 50%.
58%
— Exclusive zones are projected to reduce vehicle miles traveled (VMT) by 58%.
3 to 5
— A non-exclusive zone model with 3 to 5 carters could achieve most of the potential reduction in vehicle miles traveled (VMT).
New York's residential and commercial electricity rates are approximately 40 percent higher than the national average, though residents pay lower monthly bills due to lower average consumption. The state's new climate law aims to reduce emissions and increase renewable energy, but it may increase electricity costs, making the impact on affordability for disadvantaged communities a critical concern.
Key Data
40 percent
— New York's residential and commercial electricity rates per KWh are higher than national averages.
15 percent
— New York's industrial electricity costs are lower than national averages.
$103
— The average monthly electricity bill for New York residential customers.
$112
— The national average monthly electricity bill for residential customers.
34 percent
— The amount less electricity New York households consume on average compared to the national average.
35 percent
— The minimum share of spending on clean energy or efficiency programs required to be in disadvantaged communities.
New York State faces significant health care affordability challenges, with per capita costs 22% higher than the national average and a system that struggles with high prices and inequitable access. To address these issues, the state should pursue targeted reforms such as an individual mandate, a new public insurance option, and value-based payment models rather than pursuing unfeasible complete system overhauls.
Recommendations related to Affordability
Establish a state mandate that individuals must have insurance to ensure broader coverage and lower premiums.
Create a new public insurance plan to provide a low-cost option for individuals and groups.
Provide full or partial state subsidies to currently ineligible individuals to reduce financial barriers to care.
Implement selected maximum covered ('reference') pricing to restrain costs for high-cost services.
Extend and expand NYS Value Based Payment (VBP) roadmap targets to moderate cost growth and improve quality.
Allocate a hospital or multi-provider organization a fixed annual amount to restrain costs through global provider budgets.
Support evidence-based interventions to coordinate care and integrate behavioral and physical health care to offset costs through savings in preventable care.
Key Data
22%
— NYS per capita health care cost higher than the national average.
90%
— US per capita health care cost higher than the median of other high-income countries.
9.9%
— Estimated decline in exchange premiums if a state individual mandate is implemented.
$411 million
— Estimated decline in public costs to care for the uninsured under an individual mandate.
156%
— Tax increase required to fund a single-payer system, shifting $139 billion from premiums to tax revenue.
76%
— Portion of the State budget that would be required for health coverage under a single-payer system.
The New York Mayor Bill de Blasio has come out with a plan that guarantees comprehensive healthcare for everyone, regardless of their ability to pay or immigration status. Blasio's surprise health scheme assures both primary and speciality care. Some Americans want to see the health initiative replicated nationwide. Watch the…
18.6% is the poverty rate in New York City. Greg David and Cara Eisenpress, both from Crain's New York Business and the Craig Newmark Graduate School of Journalism at CUNY, discuss their recent reporting exploring New York City's safety net, how it's funded, and how it compares to other places…
New York City's property tax system requires a comprehensive redesign to address structural inequities, including the elimination of the current class share system and the implementation of a circuit breaker to provide tax relief for lower-income homeowners. Transitioning to a market-value-based assessment system over five years would improve transparency and fairness while ensuring the tax burden is more equitably distributed across property types.
Recommendations related to Affordability
Move cooperatives and residential condominiums to Class 1 to align their tax treatment with one-, two-, and three-family homes.
Eliminate the existing class share system to remove distortions that result in higher effective tax rates for commercial and rental properties.
Provide rebates of owner-occupied residential property taxes based on household income when tax bills exceed a set share of income to ease burdensome tax bills.
Adopt a market value-based assessment system where full market value is the starting point for assessing the tax base.
Phase in market value changes over three years for all parcels to achieve stability in the property tax system.
Transition to the new system over a five-year period to temper the impact of redistributing the property tax levy across the City.
Key Data
4 to 5 times
— The current effective tax rates of commercial and rental properties are 4 to 5 times those of owner-occupied homes.
2.25 times
— In 46 of 53 cities, effective tax rates on commercial properties are no greater than 2.25 times that of owner-occupied homes.
5 percent
— A circuit breaker could apply to property taxes on residential properties that exceed 5 percent of household income for households with income below $100,000.
10 percent
— The Constitutional debt limit sets the maximum outstanding debt for New York City at 10 percent of the five-year average of market value.
2.5 percent
— The maximum property tax revenue that can be raised and used for operating expenses is set at 2.5 percent of the five-year average of market value.
20 percent
— The current 20 percent cap on assessed value growth over five years on Class 1 homes results in foregone revenue.
New York City spends over $1.1 billion annually on emergency medical services, yet the system is plagued by inefficiencies, including the frequent and costly dispatch of fire engines to non-emergency medical calls. By reducing unnecessary ambulance requests, optimizing staffing models for Advanced Life Support, and scaling back the role of fire engines, the city could improve response times to critical incidents while generating significant taxpayer savings.
Recommendations related to Affordability
Build on the experience of other cities to develop programs to reduce residents’ unnecessary or inappropriate requests for an ambulance, as a 10 percent reduction in requests would save an estimated $58.5 million annually.
Increase the number of and more efficiently staff the ambulances which are best able to respond to the life threatening incidents so they can arrive at relevant incidents more promptly.
Dramatically reduce the role of fire engines in responding to medical incidents, dispatching them only when it is likely the engine will arrive before an ambulance and the fire engine’s staff’s presence will result in quicker, appropriate medical treatment.
Reverse the policy requiring two paramedics on ALS ambulances to allow the City to assign one paramedic and one EMT, as is the practice in the rest of the state.
Conduct a thorough assessment of the location, coverage, and workload of fire companies to identify where companies could safely close without jeopardizing response times to any type of emergency.
Key Data
$1.1 billion
— The amount the City of New York spends annually to provide emergency medical services.
$58.5 million
— The estimated annual savings from a 10 percent reduction in unnecessary or inappropriate ambulance requests.
$1,970
— The estimated average cost of a fire engine response to a medical incident in 2017.
$486
— The average cost of an ambulance run in 2017.
$7.2 million
— The annual savings for every fire engine company closed.
$210.44
— The amount Medicaid typically reimburses per ambulance transport in New York State.
New York City's proposed commercial waste zone system aims to improve collection efficiency and reduce truck traffic by 18 million miles while maintaining competition among private haulers. This plan seeks to address current pricing disparities where small businesses pay 38 percent more on average than large businesses for waste collection services.
Recommendations related to Affordability
New York City should pursue new collection arrangements for commercial waste including zones with three to five private haulers per zone.
The City should implement the Commercial Waste Zone program to rationalize collection routes and increase efficiency.
The City should require carters to offer recycling and organic collection at a lower rate than refuse collection.
Key Data
$20.76 per cubic yard
— The current ceiling price set by the Business Integrity Commission for commercial waste collection.
$13.62 per 100 pounds
— The current ceiling price set by the Business Integrity Commission for commercial waste collection.
$13.20 per 100 pounds
— The average amount small customers pay for commercial waste collection.
$9.60 per 100 pounds
— The average amount large customers pay for commercial waste collection.
18 million miles
— The projected reduction of truck traffic resulting from the proposed commercial waste zone program.
38 percent
— The amount more that the average small business pays for waste collection compared to the average large business.
Utilizing underused land within public housing developments for infill construction offers a potential revenue stream for necessary repairs, though the financial return is heavily dependent on the ratio of market-rate to affordable units. Increasing requirements for affordable housing within these developments significantly reduces the upfront payments developers are willing to provide, thereby limiting the funds available for critical infrastructure improvements.
Key Data
$33 million
— Projected yield for NYCHA from 80/20 infill developments in a strong market.
$16 million
— Projected yield for NYCHA from 80/20 infill developments in a moderate market.
$9 million
— Projected yield for NYCHA from 50/50 infill developments in a strong market.
$4.5 million
— Projected yield for NYCHA from 50/50 infill developments in a moderate market.
$0
— Projected yield for NYCHA from 100% affordable infill developments.
New York's Health Home initiative, designed to improve care coordination for Medicaid enrollees with complex needs, has seen annual spending grow to $558 million by 2017, with a significant portion of funds directed toward outreach efforts that have struggled to meet enrollment targets. To improve the program's cost-effectiveness and impact, the state should refine its targeting of priority subpopulations, adjust payment rates to reflect duration of enrollment, and enhance the interoperability of electronic health records.
Recommendations related to Affordability
The state should implement better targeting of priority subpopulations to ensure the program focuses on those who will receive the greatest benefits and cost savings.
The state should pursue greater reliance on specialized HH entities to improve enrollment efforts by leveraging staff from existing specialized providers.
The state should implement alternative payment rates including options with reduced payment for adults reaching a duration of enrollment after which greater self-management should be practical.
The state should launch new initiatives to encourage and speed interoperability of HH electronic record systems and MCO and provider electronic health records to facilitate better information sharing.
The state should foster stronger ties between MCOs and HHs including full integration for serving some groups to improve mutual accountability and cooperation.
Key Data
$558 million
— Annual spending on Health Homes in 2017.
$157 million
— Amount spent on outreach in 2017, representing 28 percent of total spending.
$944
— Average monthly savings per beneficiary credited to the Maimonides Medical Center demonstration project.
$250 million
— Federal grant program funding provided from 2011 to 2014 to support the transformation of hospital clinics into Patient Centered Medical Homes.
Across New York City, 29.3% of survey respondents identified housing as a top issue requiring more attention from the government, with that figure rising to 34.3% for the Bronx overall. In specific districts like Bronx Community District 1, nearly half of all respondents cited housing as a primary concern, while residents in Bronx Community District 11 also highlighted the cost of living and affordability as a top priority.
Key Data
29.3%
— Percentage of New York City survey respondents who identified housing as a top issue requiring more attention.
34.3%
— Percentage of Bronx survey respondents who identified housing as a top issue requiring more attention.
49.8%
— Percentage of Bronx Community District 1 survey respondents who identified housing as a top issue requiring more attention.
23.7%
— Percentage of Bronx Community District 11 survey respondents who identified cost of living and affordability as a top issue requiring more attention.
New York maintains the highest per-pupil education spending in the nation, yet significant disparities exist where poorer districts face higher tax burdens while wealthy districts generate more revenue with less effort. To address these inequities, the state should adjust its funding formulas to better account for district wealth and reallocate resources toward lower-wealth areas.
Recommendations related to Affordability
The State should properly account for district wealth and reallocate state resources from high-wealth to low-wealth districts.
Key Data
$21,206
— per pupil spending in New York as of the 2014-2015 school year
$11,392
— national average per pupil spending as of the 2014-2015 school year
$30,486
— local resources collected per pupil in the 10th wealth decile
$4,457
— state aid per pupil received by school districts in the 10th wealth decile
$16,167
— state aid per pupil received by school districts in the 1st wealth decile
The City's Ten-Year Capital Strategy lacks transparency and realistic planning, potentially masking the true long-term costs of infrastructure projects and leading to debt service obligations that could exceed the City's affordability benchmark. By failing to align capital commitments with actual execution capacity and needs, the current strategy risks underinvesting in critical infrastructure while creating unrealistic spending expectations.
Recommendations related to Affordability
The Administration should release a September Commitment Plan that reflects a more realistic allocation of capital commitments over the first four years and incorporate this rebalancing into future strategies.
The Ten-Year Capital Strategy should clearly relate back to existing statements of needs so that the City and the public can determine whether planned capital investment is adequate.
The City should include programmatic indicators to set goals for the Ten-Year Capital Strategy to improve accountability when monitoring the City’s work.
The City should improve the Asset Information Management System (AIMS) to include assets owned by City-related public authorities.
Key Data
$12.9 billion
— Projected debt service obligations if the compounded annual growth rate from fiscal years 2018 to 2023 were applied to the final four years of the strategy, representing 15.1% of projected tax revenue.
$95.8 billion
— Total planned commitments in the Executive Ten-Year Capital Strategy for Fiscal Years 2018-2027.
152 percent
— Growth in AIMS needs funding since fiscal year 2005.
78 percent
— Increase in the size of the Executive Strategy compared to the fiscal year 2014 Strategy.
145 percent
— Increase in fiscal year 2018 commitments compared to fiscal year 2016 actual commitments.
Residents identified cost of living, affordability, and income issues as a top concern, with 12.8% of survey participants naming it as one of the most important issues requiring more attention from the city government. Additionally, the survey's demographic data shows that 10.5% of respondents reported an annual household income of less than $10,000, while 22.8% reported an income between $10,000 and $34,999.
Key Data
12.8%
— Proportion of survey respondents who identified cost of living, affordability, and income issues as one of the most important issues requiring more attention from city government.
10.5%
— Proportion of weighted survey respondents reporting an annual household income of less than $10,000.
New York City's property tax system relies on complex assessment caps and phase-ins that create significant inequities, with the current system foregoing $4.5 billion in potential revenue in fiscal year 2015 alone. Reforming this system to address these disparities could involve revaluing condos and co-ops based on market sales, eliminating assessment caps for various property classes, and implementing means-tested relief for vulnerable homeowners.
Recommendations related to Affordability
If city officials are concerned with protecting homeowners who do not have sufficient cash incomes to cover comfortably their property taxes, caps on increases in assessments should be means-tested.
The city should value condos and co-ops based on market values using sales prices.
The city should assess co-ops and condos with 1-3 family homes at an assessment ratio of 6 percent.
The city should eliminate the caps for Class 1 properties.
The city should eliminate the cap on small rental properties and the phase-ins for large rental and commercial properties.
Key Data
$4.5 billion
— Estimated revenue foregone due to the cap and phase-in rules in fiscal year 2015.
$1.6 billion
— Lost revenue from assessment caps applied to smaller rental properties.
$2 billion
— Target amount of additional property tax revenue to be raised.
$846 million
— Revenue raised in fiscal year 2015 from the revaluation of condos and co-ops and the application of a 6 percent assessment ratio.
$936 million
— Revenue raised in fiscal year 2015 from the elimination of assessment growth caps on 1-3 family homes.
$21.1 billion
— Estimated baseline property tax levy in fiscal year 2015.
New York City's capital construction process for libraries and cultural institutions is plagued by excessive delays and high costs, with median new construction projects costing $930 per square foot. Reforming this system to be more cost-efficient is essential to ensure that limited public funds are used effectively and that these vital community institutions can complete necessary infrastructure projects.
Recommendations related to Affordability
Create a task force to review and reform the capital construction process.
Start systematically tracking capital project costs and timelines.
Streamline project approval practices and reduce redundancies between OMB and DDC.
Simplify the design review process at DDC.
Strengthen DDC’s data analytics team to inform smarter decision-making.
Institute a process for nonprofits to prequalify for discretionary capital funds.
Establish dependable funding for capital construction projects, including routine state-of-good-repair investments.
Standardize and disseminate capital eligibility rules and requirements.
Allow appropriate capital projects to be contracted through a design-build process.
Expand the use of pass-through project management.
Key Data
$930
— Median cost per square foot for new library and cultural buildings in the sample.
1,550
— Median number of days for a project to complete.
$1,272
— Average cost per square foot for ground-up construction projects managed by the city.
$641
— Average cost per square foot for ground-up construction projects managed by the New York Public Library.
22%
— Reduction in project approval durations from OMB cited in DDC's 2017 State of the Agency report.
140
— Number of unplanned closures experienced by the Brooklyn Public Library in 2013 due to infrastructure failures.
The Fair Fares proposal, which would subsidize transit costs for low-income residents, is a reasonable measure to promote economic advancement and should be funded by New York City. Implementing this $212 million initiative would represent a small fraction of the city's $84.7 billion operating budget and aligns with existing precedents for city-subsidized fare reductions.
Recommendations related to Affordability
The Fair Fares proposal to subsidize fares for low-wage workers is worth enacting, and the costs of providing this subsidy should be borne by New York City.
If the mayor supports the policy, it should be a priority that is accommodated within the city’s financial plan.
Key Data
$121
— Cost of a monthly MetroCard.
$1,452
— Annual cost of a monthly MetroCard for a single worker.
$212 million
— Estimated annual cost of the Fair Fares proposal in foregone fare revenue.
$100 million
— Annual cost to the city for providing discounted MetroCards to students and senior citizens.
$130 million
— Annual cost to the city for subsidizing paratransit services.
$1 billion
— Total annual operating funds provided by the city to the MTA.
New York State's school aid distribution formula is flawed, relying on outdated data and arbitrary adjustments that misallocate resources to wealthy districts while failing to adequately support needy ones. Reforming this formula to better target aid based on actual student needs and local fiscal capacity would require only a modest $569 million increase in state funding, rather than the $3.8 billion requested by advocates.
Recommendations related to Affordability
A single method should be used that applies a uniform local tax factor and adjusts only for one other factor – the local Medicaid financing burden.
Hold harmless provisions, phase-in percentages, caps, and other adjustments in the current formula should be eliminated.
Increasing the weighting for poverty from 0.65 to 0.75 in the calculation of the PNI incorporated in the formula would more appropriately distribute Foundation Aid.
Key Data
$569 million
— The required increase in annual state funding to support a sound basic education in all of New York’s school districts under the proposed reform.
$3.8 billion
— The amount of additional annual state funding that advocates are calling for to be distributed through the Foundation Aid program.
$2.7 billion
— The amount of funding that would be redirected to needy districts under the proposed reform.
$1.9 billion
— The net loss in funding that the wealthiest five deciles would experience under the proposed reform.
$22,556
— New York’s statewide average per pupil spending, which is the highest in the nation.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
New York City's spending on homeless services has surged by $1 billion since fiscal year 2014, reaching $2.3 billion in fiscal year 2017, despite projections that costs would decrease. The city must establish clear milestones for service expansion and spending reduction to ensure that the growth in homeless services remains sustainable.
Recommendations related to Affordability
The Administration's new strategy on homelessness should address how much more growth in the homeless population served is actually anticipated.
The Administration's new strategy on homelessness should provide milestones against which to measure progress towards more sustainable spending.
Any new strategy for service redesign or expansion in this area should be accompanied by milestones for reducing spending to sustainable levels.
Key Data
$2.3 billion
— Total spending on homeless services by all New York City agencies in fiscal year 2017.
77%
— Increase in total homeless services spending since fiscal year 2014.
$1.6 billion
— Projected spending on shelters in fiscal year 2017.
$286 million
— Projected spending on preventive services in fiscal year 2017.
$216 million
— Total cost of housing voucher programs in fiscal year 2017.
$80.5 million
— Spending on services for the street homeless in fiscal year 2017.
The proposed 5-cent plastic bag fee in New York City includes exemptions for SNAP and WIC recipients and provides free reusable bags to mitigate financial impacts on low-income residents. This policy aims to reduce waste generation and disposal costs without creating an undue economic burden on vulnerable populations.
Recommendations related to Affordability
The Governor should veto the bill (A.04883/S.04158) that would place a moratorium on the 5-cent plastic bag fee in New York City.
Key Data
5 cent
— The fee on certain plastic bags in New York City that the state bill would place a moratorium on.
10 billion
— The number of plastic bags New York City disposes of each year.
$12.5 million
— The annual cost to New York City for disposing of plastic bags.
50 percent
— The decline in plastic bag usage seen in Washington, D.C. after implementing similar fees.
The Metropolitan Transportation Authority faces a projected deficit exceeding $2.7 billion in 2017, necessitating regular fare and toll increases to cover operating expenses. While these increases are essential for fiscal health, they place a substantial burden on low-wage workers, suggesting a need for city-funded, income-conditioned fare discounts.
Recommendations related to Affordability
The Board should continue the policy of regular and predictable fare increases and move toward a long-term goal of covering approximately half of mass transit expenses with fare revenue.
Transit fares should increase greater than 4 percent in 2017 and 2019.
The MTA should seek additional motor vehicle use charges to cross-subsidize transit.
A discount targeted to the neediest New Yorkers would be a sensible way to help make transportation costs more affordable.
The MTA should ensure the contractor and the agency have the capacity to implement an income-conditioned fare structure so that if such a policy is adopted by the Mayor and City Council, it can be implemented quickly.
Key Data
$2.7 billion
— The MTA's projected deficit using GAAP in 2017.
42 percent
— The increase in fringe benefits for employees and retirees since the MTA implemented a fare increase in 2009.
$90 million
— The estimated potential yield from capping the number of allowed rides for weekly and monthly passes in 2015.
$1.86
— The average revenue per ride on the MTA system.
3.9 percent
— The average annual increase in operating expenses since the MTA implemented a fare increase in 2009.
Rising transit costs are increasingly burdensome for low-income New Yorkers, with monthly MetroCard prices climbing significantly over the last two decades. Implementing income-related fare discounts for residents at or below the federal poverty threshold would improve economic mobility and align with broader city efforts to combat inequality.
Recommendations related to Affordability
The city should implement half-price fares for working-age adults who have incomes at or below the federal poverty threshold to match the discount available to senior citizens.
The Human Resources Administration should determine eligibility for reduced fares because it already verifies incomes for social-service programs.
The mayor and City Council should cover the cost of the fare discounts as part of their strategy to make New York more affordable and combat inequality.
The policy for income-related fare discounts should be included in the fare-hike process this year.
Key Data
$200 million
— Annual cost of providing half-price fare discounts to low-income residents.
25%
— Percentage of low-income residents who often were unable to afford transit fares in 2015.
$1,452
— Annual cost of a monthly MetroCard following the scheduled fare increase.
$116.50
— Current cost of a monthly MetroCard.
$1 billion
— Annual city contribution to the MTA’s operating budget.
$300 million
— Annual city contribution for reduced fares for seniors, students, and paratransit users.
New York City faces significant challenges in maintaining its competitive edge due to high rental costs and lengthy commutes that impact its ability to attract and retain talent. While the city remains a highly attractive destination, addressing these quality of life weaknesses is essential for a sustainable economic development strategy.
Key Data
11
— New York City's rank for Rent Affordability among 14 domestic metro areas.
4
— New York City's rank for Location Affordability among 14 domestic metro areas.
NY1 About 150,000 disabled New Yorkers use the MTA's pricey Access-A-Ride service to get around the city each day. Two new studies are proposing ways to dramatically improve service and save taxpayers more than $100 million a year.
New York City's Access-A-Ride paratransit program is the most expensive in the nation, with costs projected to reach $646 million by 2020, placing a significant financial burden on the Metropolitan Transportation Authority and its riders. To improve affordability and efficiency, the program should implement strategies such as shifting ambulatory trips to lower-cost broker car services, increasing the use of fixed-route transit, and securing Medicaid reimbursement for non-emergency medical transportation.
Recommendations related to Affordability
The MTA could shift these trips to its broker car service (BCS) program, which uses a for-hire vehicle broker to complete trips using black cars and liveries, potentially saving up to $126 million annually by lowering the cost per trip for ambulatory customers.
The MTA could provide service more efficiently and improve the customer experience by offering a subsidy program that allows paratransit users the opportunity to use the City’s taxicab fleet and Transportation Network Companies (TNC) like Uber and Lyft, lowering the average cost per ride.
The MTA could discourage excessive use of paratransit by charging a higher fare, which could save as much as $184 million annually by reducing trips and increasing fare revenue.
The MTA could offer feeder service, trips that connect users with accessible fixed-route stops rather than door-to-door service, in a greater number of appropriate situations to reduce the number of trips taken and lower the unit cost.
The MTA should seek Medicaid reimbursement for non-emergency medical transportation, as reforming federal and state policies to allow Medicaid reimbursement for relevant paratransit trips could defray some of the cost of paratransit service for eligible trips.
Key Data
$461 million
— 2015 cost of the Access-A-Ride program.
$71
— 2014 cost per trip for Access-A-Ride, the highest among 29 cities.
$126 million
— Potential annual savings from shifting all ambulatory customers to broker car service.
$184 million
— Potential annual savings from doubling paratransit fares.
$646 million
— Projected total program expenses in 2020.
$385 million
— Projected MTA revenue used to subsidize Access-A-Ride in 2020.
New York City's hospital referral regions perform relatively well in the 'Access and Affordability' domain of the Commonwealth Fund's health system scorecard, with Manhattan ranking 67th and the Bronx ranking 112th nationally. Additionally, the city achieves high rankings for the low share of uninsured children, with Manhattan ranking 3rd and the Bronx ranking 4th.
Key Data
67
— Manhattan Hospital Referral Region ranking in the 'Access and Affordability' domain.
112
— Bronx Hospital Referral Region ranking in the 'Access and Affordability' domain.
3
— Manhattan's national ranking for the share of uninsured children.
4
— Bronx's national ranking for the share of uninsured children.
New York State's plan to use $2.3 billion in bank settlement funds to subsidize the Thruway Authority undermines the principle that road infrastructure should be self-funded through user tolls rather than general tax revenue. Relying on these subsidies encourages excessive motor vehicle use and shifts financial burdens away from the drivers who directly benefit from the system.
Recommendations related to Affordability
The Governor and the Legislature should make a U-turn in policy and return to a sounder approach to funding the Authority by avoiding general tax subsidies for road and bridge infrastructure.
The Legislature should concur with the Executive Budget proposal to remove the Canal Corporation from the Thruway, which would save an estimated $50 million annually in operating losses.
The Legislature should reject the proposal to require the Thruway Authority to pay the annual cost of policing, which is approximately $35 million.
Key Data
$2.3 billion
— Amount of State funds from bank settlements proposed to subsidize the New York State Thruway Authority.
$50 million
— Estimated annual operating losses from the Canal Corporation that could be saved by removing it from the Thruway.
$209 million
— Planned capital spending for the Canal Corporation that could be alleviated by removing it from the Thruway.
$35 million
— Annual cost of policing the Thruway that the Executive Budget would require the Authority to pay.
$1.4 billion
— Amount spent by the Thruway for canal operations and capital from 1993 to 2015.
$18 million
— Combined annual cost of operating and maintaining toll-free portions of I-287 and I-84.
While 38 percent of New York City tenant households are rent burdened when accounting for government assistance, a majority of tenants in market-rate units actually pay less than 30 percent of their income on rent. Rent regulation is not an effective mechanism for achieving affordability for low-income households, as many regulated units are occupied by higher-income tenants who are not rent burdened.
Key Data
38%
— of New York City’s tenant households are rent burdened when accounting for government financial assistance.
54%
— of market-rate households, or 441,202 households, pay less than 30 percent of income for rent.
44%
— of tenants in rent-regulated units are rent burdened.
211,000
— regulated units are occupied by middle-income and upper-middle income households, few of whom are rent burdened.
1,087
— is the number of rent-regulated units that grew in 2013, according to the Rent Guidelines Board.
19%
— is the median rent-to-income ratio for middle-income tenants in New York City, which is well below the 30 percent threshold for rent burden.
The Metropolitan Transportation Authority's 2015-2019 capital plan faces a $15.2 billion funding gap and lacks clear priorities, potentially forcing taxpayers and riders to pay more for a misguided investment strategy. The plan fails to adequately address infrastructure repairs and signal modernization while committing substantial, poorly analyzed funds to new expansion projects that have historically suffered from significant cost overruns.
Recommendations related to Affordability
The MTA should establish explicit criteria for selecting priority projects and consider evidence regarding how well potential investments meet these criteria.
The MTA should postpone commitment to new expansion projects until an improved planning process is established and used to assess multiple potential projects.
The MTA should embrace a more ambitious schedule for Communications-Based Train Control (CBTC) and provide the necessary funding in the 2015-2019 plan.
The MTA should rethink the management of large-scale projects, especially those for expansion and signal improvements, to promote more effective implementation.
The MTA should set priorities for how available money is used, ensuring plans reflect established criteria for selecting among alternative investments.
Key Data
$15.2 billion
— The amount of the funding gap remaining in the MTA's 2015-2019 capital plan.
$5.4 billion
— The total shortfall in funding for State of Good Repair (SOGR) needs compared to the 2013 needs assessment.
$10.8 billion
— The current estimated cost of the East Side Access project, which was originally approved in 2000 at a cost of $6.3 billion.
$743 million
— The amount committed to the Penn Station Access project, which lacks a reported total cost or quantified benefits.
$32 billion
— The total investment amount called for in the MTA's 2015-2019 capital plan.
In 2010, combined housing and transportation costs for moderate-income households varied significantly across major U.S. cities, with Riverside residents spending 53% of their income on these expenses. New York City households in the same demographic spent 37% of their income on these combined costs, while Washington, D.C. households spent 34%.
Key Data
$24,101
— In 2010, a moderate-income household in Riverside spent $24,101 on combined housing and transportation costs, representing 53% of their income.
$18,919
— In 2010, a moderate-income household in New York City spent $18,919 on combined housing and transportation costs, representing 37% of their income.
$23,299
— In 2010, a moderate-income household in Washington, D.C. spent $23,299 on combined housing and transportation costs, representing 34% of their income.
$26,921
— In 2010, a moderate-income household in San Jose spent $26,921 on combined housing and transportation costs, representing 39% of their income.
New York City's high housing costs are partially offset by significantly lower transportation expenses, making the city the third most affordable among major U.S. cities when considering combined housing and transit burdens. This broader measure of affordability, which remains well within federal guidelines, highlights the importance of maintaining the city's extensive public transit infrastructure and increasing density in transit corridors.
Recommendations related to Affordability
Municipal leaders should be concerned with the fiscal health and administration of New York City’s major transit agencies—the Metropolitan Transportation Authority, the state and city transportation departments, and the Port Authority of New York and New Jersey.
Increasing density in transit corridors—an important component of the Mayor’s affordable housing plan—is a sensible approach to development.
Key Data
$63,915
— Annual income for a typical household in New York City.
$14,700
— Annual housing costs for a typical household in New York City.
$5,752
— Annual transportation costs for a typical household in New York City.
32 percent
— Location cost burden for a typical household in New York City.
56.5 percent
— Households in New York City that do not own a car.
55.9 percent
— Commuters in New York City who use public transit to get to work.
The NY State of Health marketplace has successfully enrolled nearly one million residents, with over 70% of those individuals previously lacking insurance coverage. By providing access to financial assistance and plans with premiums 53% lower than comparable 2013 coverage, the platform has significantly improved healthcare accessibility and affordability for New Yorkers.
Key Data
960,762
— residents had enrolled in the NY State of Health marketplace as of April 16, 2014.
1,319,239
— individuals had completed the application process for health insurance.
70%
— of enrolled individuals reported that they did not have insurance at the time they signed up.
1.2 million
— calls from New Yorkers answered by Customer Service Center representatives.
8,800
— specially trained and certified assistors available to help people apply in person.
53%
— lower than premiums for comparable coverage in 2013, representing the cost of premiums through the marketplace.
New York City's health insurance costs for employees and retirees are projected to grow by 40 percent, reaching nearly $7 billion by 2016 and consuming 80 percent of the city's projected budget deficit. To address this fiscal burden, the city should implement premium-sharing arrangements, which could generate $1.7 billion in annual savings.
Recommendations related to Affordability
The taxpayers' obligations for health insurance for city employees and retirees will have to be controlled through premium-sharing.
Annual savings of $1.7 billion can be achieved by requiring contributions of up to 25 percent from employees and 50 percent from retirees.
The city should eliminate the Medicare Part B reimbursement to help control rising health insurance costs.
Key Data
40 percent
— Projected growth in health insurance costs between fiscal years 2013 and 2017.
$7 billion
— Projected cost of health insurance in 2016.
80 percent
— Portion of the city's projected budget deficit that health insurance costs will equal in 2016.
90 percent
— Portion of the city's workforce enrolled in health plans that require no employee contribution.
$1.7 billion
— Estimated annual savings achievable through premium-sharing and eliminating Medicare Part B reimbursement.
New York City must implement policies to improve quality-of-life measures, specifically addressing the high cost of rent and long commute times to remain competitive. Enhancing the city's attractiveness requires targeted efforts such as stimulating housing development and fostering affordable workspaces for startups.
Recommendations related to Affordability
The city should foster affordable workspaces for startups to support economic growth.
Policymakers should stimulate housing development to address quality-of-life concerns.
The city should improve mass transit to enhance overall attractiveness.
Efforts should be made to support education in fields where the metro area lacks depth.
The city should improve broadband and Wi-Fi connectivity to remain competitive.
Policymakers should advocate for visa protocols that allow foreign students to work and become residents.
New York City faces significant challenges in maintaining its competitive edge due to high housing costs and lengthy commute times, which impact its ability to attract and retain a highly-skilled workforce. To remain a desirable destination for talent and businesses, the city must actively address these quality-of-life weaknesses while continuing to foster human capital and emerging industries.
Recommendations related to Affordability
The city must pursue policies to address weaknesses in quality of life, such as high housing costs, to maintain a competitive position.
To remain a desirable place to live and work, the city must address high housing costs that currently pose a challenge to its competitiveness.
The city must expand human capital development to ensure future economic prosperity.
The city must foster emerging industries to retain its strength in core sectors.
Key Data
9
— New York City's rank for rent affordability among 14 major metropolitan areas, where 1 is the most affordable.
14
— New York City's rank for commute times among 14 major metropolitan areas, where 1 is the shortest commute.
1
— New York City's rank for crime rates among 14 major metropolitan areas, where 1 is the lowest crime rate.
2
— New York City's rank for bars and restaurants per capita among 14 major metropolitan areas.
New York City spends over $2 billion annually on waste disposal, with costs rising due to reliance on long-distance landfilling. Shifting to local waste-to-energy facilities and implementing financial incentives like pay-as-you-throw could save taxpayers $119 million annually and significantly reduce environmental impacts.
Recommendations related to Affordability
The City should foster the construction of waste-to-energy plants sited and designed for city needs and should partner with owners of existing facilities within the region to expand their capacity and willingness to process New York City’s waste.
The City should implement a trial pay-as-you-throw system in the short-term, taking lessons learned to a citywide program in the long-term.
The City should stick to its plan and reinvigorate the recycling program by touting the expansion and the simplification of recycling rules.
Municipal leaders should give high priority to managing solid waste in a way that is fiscally and environmentally sound.
The use of public financing should be reserved for technologies with a proven performance record in the U.S.
Key Data
$2 billion
— Annual tax dollars spent by New York City to throw out its garbage.
$95 per ton
— Cost for the three million tons of garbage the City exports to landfills.
$119 million
— Annual savings for the City if new and expanded facilities accommodate two million tons of waste.
$2 billion
— Present value savings over the next 30 years from expanding waste-to-energy capacity.
$66 and $77 per ton
— Current cost of sending a ton of garbage to a regional waste-to-energy plant.
The Metropolitan Transportation Authority's significant debt burden threatens future affordability for riders and taxpayers, necessitating careful management of debt refunding strategies. To avoid unfairly passing costs to future generations, the authority must adhere to strict guidelines that prioritize genuine savings over short-term budget relief through debt stretching or back-loading.
Recommendations related to Affordability
The MTA is subject to the State Comptroller’s guidelines, and the Board should not seek any exemptions.
The refunding should follow guidelines that promote the greatest total savings and prevent the unfair passing of costs onto future taxpayers and straphangers.
There are significant opportunities for savings from high-to-low interest rate exchanges, but these savings should not be offset with shuffling and stretching of debt service payments.
Key Data
$32 billion
— Long-term debt outstanding for the Metropolitan Transportation Authority.
$2.1 billion
— Debt service cost in 2012, consuming nearly one-third of the revenue the MTA receives from fares and tolls.
$2.6 billion
— Projected debt service cost by 2015.
$39 billion
— Projected outstanding debt for the MTA by 2015.
$7 billion
— Value of outstanding debt being considered for a large-scale refunding by MTA leaders.
$100 million
— Total cost of the hypothetical subway station repair and renovation project used to illustrate refunding scenarios.
New York's public pension system places a disproportionate financial burden on taxpayers compared to national averages, with employees contributing significantly less than their counterparts in other states. Implementing a sliding scale for employee contributions and a risk-sharing mechanism would align the state with national standards, ensuring long-term fiscal sustainability and reducing the tax burden.
Recommendations related to Affordability
The state should raise pension contributions by new employees to between 4 percent and 6 percent of wages to move New York closer to the middle of the US pack.
New York should implement a 'risk-reward' approach to share the downside risk and the upside potential with employees.
Requiring future employees to contribute up to 6 percent of salary is necessary to make pension costs more sustainable and provide needed relief for taxpayers.
Key Data
22%
— Percentage of state and local pension plans nationally that required employee contributions of less than 3.9 percent of wages in 2009.
55%
— Percentage of US public plans that required employee contributions of 6 percent or more in 2009.
66%
— Average percentage of total pension costs paid by employers in US state-run public-pension funds in 2010.
89%
— Percentage of pension costs paid by New York state and participating local governments in 2010, compared to 11 percent paid by employees.
87%
— Percentage of the amount paid to New York’s local plans that came from taxpayers in 2009.
7:1
— Ratio of taxpayer to employee contributions for New York's local pension plans in 2009, compared to a national average of 4:1.
New York City's current system of multiple, independent union welfare funds is inefficient and costly, leading to unnecessary administrative waste and a lack of economies of scale. Consolidating these supplementary health benefits under the City's health insurance plan and centralizing non-health benefits could yield significant taxpayer savings of approximately $146 million annually.
Recommendations related to Affordability
The varying and inefficient package of drug, dental and optical benefits provided by the multiple welfare funds should be replaced by a standard set of benefits included under the City’s health insurance program.
For non-health related benefits, a new centralized plan should be developed, which could be administered by the City through the existing benefit offices in the Office of Labor Relations or by a coalition of unions.
New standards should be set for accountability of existing and any new union welfare benefit funds, including limits on allowable administrative expenditures and new enforcement powers for the Comptroller.
Key Data
$1 billion
— Annual City payments to union welfare funds.
$12.7 million
— Estimated annual administrative savings from consolidating welfare funds.
$146 million
— Total estimated annual gain from consolidating health and administrative benefits.
$3.7 billion
— Cost to the City for health insurance benefits in fiscal year 2010.
$254,052,851
— City payments to District Council 37 in 2007.
$250,646,789
— City payments to the United Federation of Teachers in 2007.
New York's public universities should be granted greater autonomy to set tuition rates, which would allow for more modest and predictable increases compared to the current system of legislative control. To ensure continued access for low-income students, the state must reverse recent cuts to the Tuition Assistance Program and expand financial aid to mitigate the impact of higher tuition costs.
Recommendations related to Affordability
The state should grant SUNY and CUNY greater autonomy to set tuition policies, which would lead to more modest and predictable tuition hikes than those set by the legislature.
State leaders should reverse recent trends and expand the Tuition Assistance Program (TAP) to mitigate the impact of higher and differential tuition on student affordability.
SUNY and CUNY should be allowed to set differential tuition among campuses and programs to recognize variation in costs and maximize revenue.
The state should restore eligibility and funding levels for the Tuition Assistance Program, which have been reduced in recent budgets, to ensure continued access for needy students.
Key Data
$7,605
— The national average for tuition and fees at four-year public colleges in 2010-11.
$5,790
— The average tuition and fees for resident undergraduate students at New York's four-year public colleges in 2010-11.
$12,870
— SUNY's out-of-state undergraduate tuition in 2009-10.
$8,500
— The amount by which SUNY's out-of-state tuition was lower than the average at 29 comparable state universities.
$1,252
— The amount by which New York's in-state tuition and fees at community colleges exceeded the national average in 2010-11.
$4,000
— The reduced funding level for the Tuition Assistance Program for students in two-year colleges.
New York City's green policies must prioritize long-term infrastructure affordability and economic competitiveness by focusing on energy efficiency in buildings, enhanced public transportation, and modernized utility grids. To ensure these initiatives are fiscally responsible, the city should adopt rigorous cost-effectiveness standards and evaluate innovative programs through pilot tests before citywide implementation.
Recommendations related to Affordability
The city should limit municipal government activities to those appropriate to the local level of government to ensure fiscal responsibility.
Leaders should elevate the use of cost-effectiveness as the basis for decision-making when assessing proposals for green initiatives.
The city should conduct pilot tests of programs in specific neighborhoods to provide a sound basis for deciding whether citywide policies would meet cost-effectiveness standards.
New York should rethink existing subsidies and regulations with an aim of revising or eliminating those financial incentives which are too generous.
The city should give preference to practices that support and encourage consumer choice and responsible consumer behavior.
Key Data
$38,000
— Cost of a commercial firm investing in a 5-kilowatt solar panel.
$7,600
— Total property tax abatement for a 5-kilowatt solar panel over four years.
$4.50
— Cost per square foot for green roof tax abatement.
$6.80
— Cost of the smallest Zuri-Sack in Zurich for waste disposal.
Rent regulation in New York City provides significant but poorly targeted benefits, as many high-income households receive substantial rent discounts while low-income households continue to face high rent burdens. The current system imposes costs on the city through lost property tax revenue, higher rents in the unregulated market, and a less well-maintained housing stock, necessitating a shift toward better-targeted affordable housing programs.
Recommendations related to Affordability
Benefits now available to low- and moderate-income households should not be reduced, but the poorly targeted benefits can be removed at an accelerated pace by phasing out regulation for higher-income households.
The long-term contraction in the scope of rent regulation should be accompanied by expansion of other more effective programs to promote affordable housing.
New legislation should phase out benefits for all high-income households.
The role of state and local government should be to evaluate the efficiency and effectiveness of existing affordable housing programs and other policies, such as zoning, that affect housing investment.
The City should reduce barriers created by its own policies and continue streamlining existing programs.
Key Data
$5,500
— Average annual rent reduction per housing unit provided by rent regulation.
$1.9 Billion
— Total extra rent paid by 669,000 households in unregulated units in 2008 due to the market effects of rent regulation.
$283 Million
— Annual decrease in the City of New York’s property tax revenue caused by rent regulation.
$2.6 Billion
— Total aggregate rent discount associated with regulation under the assumption that unregulated rents would fall by 15% if regulation were eliminated.
31%
— Average discount provided by rent regulation for most affected units.
54%
— Share of rent-paying households in private, regulated units that had affordable housing in 2008.
New York's public employee retirement benefits have become a significant and rapidly growing fiscal burden, with pension contributions for the City projected to reach $4.7 billion by 2008. To ensure long-term fiscal sustainability, the system should shift toward defined contribution plans for new hires and implement reforms to health insurance and disability benefit structures.
Recommendations related to Affordability
The City and State should require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
The City and State should stop reimbursing retirees for Medicare Part B premiums.
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans for all new workers.
The New York systems should increase required employee contributions and discontinue the ITHP program.
The New York system should raise the minimum age requirement for retirement to adopt age thresholds similar to the federal Social Security system.
Pension benefits should be based on a more standard definition of final average salary that excludes overtime and other supplements.
The current system should define work-related disabilities more rigorously to set more standard requirements.
The City should eliminate the variable supplements, or 'Christmas bonuses,' available to some retired New York City uniformed workers.
Key Data
$615 million
— Required contributions to NYC pension funds in fiscal year 2000.
$2.3 billion
— Required contributions to NYC pension funds in fiscal year 2004.
$4.7 billion
— Projected required contributions to NYC pension funds in fiscal year 2008.
$4.2 billion
— Combined cost of health insurance for the City and State in 2004.
$6.3 billion
— Projected combined cost of health insurance for the City and State in 2008.
$12,000
— The amount of the variable supplement, or 'Christmas bonus,' for NYC uniformed workers by 2007.
New York's public university systems are currently constrained by legislative control over tuition, which leads to unpredictable hikes during budget gaps rather than consistent funding. Granting these institutions the authority to set their own tuition rates and implement differential pricing, while protecting financial aid, would allow for more stable and equitable educational investment.
Recommendations related to Affordability
The state should allow SUNY and CUNY to set their own tuition rates, eliminating the requirement that the Legislature appropriate the funds.
The state should allow SUNY and CUNY to set differential tuition among campuses and programs to recognize variation in costs and maximize revenue.
The Public Higher Education Empowerment and Innovation Act should be separate from budget negotiations and passed immediately.
Financial aid should be used to mitigate the impact of higher tuition on needy students.
It would be counterproductive to reduce TAP grants at the same time that increases in tuition are permitted.
Key Data
14 percent
— The increase in tuition for undergraduates at SUNY to help close the budget gap in 2009.
15 percent
— The increase in tuition for undergraduates at CUNY to help close the budget gap in 2009.
28 percent
— The tuition increase implemented during the recessions in 1995 and 2003.
$500
— The proposed annual cap on the maximum tuition increase for the following year.
$5,761
— The average tuition and fees for resident undergraduate students at New York's four-year public colleges and universities in 2009-10.
$7,020
— The national average for tuition and fees for resident undergraduate students in 2009-10.
New York's public higher education system faces challenges with erratic tuition increases linked to the state budget process, prompting proposals to grant universities more control over tuition setting and revenue. To maintain student access, these reforms must be paired with robust financial aid, as current proposals to cut the Tuition Assistance Program would undermine affordability for low-income students.
Recommendations related to Affordability
The Legislature should reject the proposed cuts in financial aid to ensure that higher tuition rates are not accompanied by reduced support for students, which would negatively impact affordability.
Policymakers should expand the Tuition Assistance Program and lift the ceiling on grants to mitigate the potential impact of higher and differential tuition on student choice and access to academic programs.
Future tuition increases should be subject to an annual cap based on the Higher Education Price Index to ensure that hikes are more modest and predictable than those set by the Legislature in the past.
The state should allow SUNY and CUNY to control their tuition revenue directly rather than requiring it to be appropriated by the Legislature, which would help rationalize the funding system.
Universities should implement differential tuition policies to recognize variation in costs among different programs and campuses, allowing them to maximize tuition revenue based on market forces.
Key Data
$5,761
— Average tuition and fees for resident undergraduate students charged by New York's four-year public colleges and universities in 2009-10.
$7,020
— The national average tuition and fees for resident undergraduate students at four-year public colleges and universities in 2009-10.
$827 million
— The amount awarded in grants to eligible undergraduates through the Tuition Assistance Program during the 2007-08 academic year.
$975
— The average state need-based undergraduate aid awarded per full-time equivalent student, which was the highest in the nation.
$3,888
— Average in-state tuition and fees at New York's community colleges in 2009-10.
$1,344
— The amount by which average in-state tuition and fees at New York's community colleges exceeded the national average in 2009-10.
New York's economic development power programs, which provide discounted electricity to select businesses, are ineffective, lack transparency, and fail to align with state energy conservation goals. These programs cost the state between $479 million and $640 million annually, and should be phased out in favor of a more strategic, market-based approach that prioritizes energy efficiency and high-value economic growth.
Recommendations related to Affordability
New York should phase out current economic development power programs, as no new legislation should be passed to reauthorize them and current contracts should be allowed to expire.
State leaders should include assistance for firms with high energy costs as part of a comprehensive economic development strategy administered by Empire State Development.
NYPA should sell power no longer used for economic development at market rates, which estimates suggest would generate between $479 million and $640 million in additional revenue.
Firms that receive benefits specifically to alleviate the high cost of their power should be required to submit to energy audits and to comply with best practices for energy efficiency available in NYSERDA.
Key Data
$479 million to $640 million
— Estimated annual cost or revenue loss for NYPA due to economic development power subsidies.
$228 million
— Annual subsidy provided to residential users through the Rural and Domestic power program.
$157 million
— Program expenses for New York Energy $mart in 2007.
$424 million
— Voluntary contributions made by NYPA to the State's general fund between 2002 and March 2008.
$5,836 to $7,883
— Per-job subsidy range for beneficiaries of hydroelectric power programs.
$390 to $630
— Per-job subsidy range for beneficiaries of purchased power programs.
High local taxes in New York State create fiscal hardship and hinder the ability of localities to compete for businesses and residents. Eliminating costly mandates that restrict school districts from managing health insurance benefits for retirees is necessary to help lower these tax burdens.
Recommendations related to Affordability
The Governor should veto A4628, which would renew the provision prohibiting school districts from reducing health insurance benefits for retirees without union approval.
New York should roll back costly mandates that prevent school districts from controlling skyrocketing costs whenever the opportunity arises.
Between fiscal years 2000 and 2008, the average compensation cost for a full-time New York City employee grew by 63 percent, reaching $106,743. This increase was primarily driven by a 700 percent surge in pension contributions, which rose from $2,530 to $20,333 per employee.
Key Data
$106,743
— Average compensation cost per full-time employee in fiscal year 2008.
63%
— Growth in the City's average employee compensation cost since fiscal year 2000.
$37,619
— Fringe benefit costs per full-time employee in fiscal year 2008.
$20,333
— Average contribution for pension benefits per full-time employee in fiscal year 2008.
700%
— Growth in the City's average contribution for pension benefits between fiscal years 2000 and 2008.
New York's current circuit breaker program is failing to provide adequate property tax relief because its income and value ceilings, set in 1985, have not kept pace with the state's median household income of $51,384 and median home value of $303,400. Replacing the flawed STAR homestead exemption program with an improved circuit breaker model could reach 5.1 million owners and renters by refunding property taxes that exceed a specific percentage of household income.
Recommendations related to Affordability
New York should reform its existing circuit breaker program, which is currently eroding and providing relief to fewer residents each year due to outdated income and value ceilings.
The state should replace the poorly crafted STAR homestead exemption program with an improved circuit breaker model that functions more effectively.
An improved circuit breaker model should refund property taxes above 5 percent of income for homeowners earning less than $20,000.
The program should refund property taxes above 7 percent of income for homeowners earning $20,000 or more.
The state should refund property taxes in excess of 6 percent of income for renters to provide targeted relief.
Key Data
$18,000
— The income ceiling for New York's current circuit breaker program, which has not been modified since 1985.
$51,384
— The median household income in New York in 2006, which is far above the current circuit breaker income ceiling.
$303,400
— The median home value in New York in 2006, which is well above the program's current home value ceiling of $85,000.
$875
— The median rent in New York in 2006, which is well above the program's current rent ceiling of $450.
$2.6 billion
— The estimated cost of a circuit breaker program that refunds property taxes above 5 percent of income for homeowners earning less than $20,000 and above 7 percent for all others.
$2.7 billion
— The estimated cost of a circuit breaker program for renters that refunds property taxes in excess of 6 percent of income.
New York's high local tax burden, driven by heavy reliance on property taxes and high labor costs, creates significant fiscal stress for local governments and school districts. To address these inequities, the state should consider structural reforms such as a full Medicaid takeover, consolidating fragmented school districts, and replacing the inefficient STAR program with a more targeted circuit breaker system.
Recommendations related to Affordability
The State should pursue structural changes to the Medicaid program to reduce ineffective services.
The State should implement reforms in the pension benefits for public employees.
The State should enact changes to the legal framework for collective bargaining to better control labor costs.
The State should pursue small school district consolidations to reduce costs related to fragmented government.
The State should base a household’s property tax rebate on property taxes as a share of income to improve upon the STAR program.
The State should implement a complete state takeover of local Medicaid expenses to shift financing to a more progressive revenue source.
The State should distribute state education aid using an equalization or uniform tax effort approach to promote equity in local tax burdens.
State law should require arbitrators to award wage increases that will not necessitate tax increases or require that any wage increase be funded in part by productivity gains.
Key Data
$111 billion
— New Yorkers pay about $111 billion annually in state and local taxes.
$150
— In fiscal year 2005, New York collected $150 for every $1,000 of personal income in state and local taxes.
$2.2 billion
— In fiscal year 2005, Medicaid mandates required $2.2 billion from counties excluding New York City.
$4.7 billion
— From fiscal year 1998-99 to 2007-08, school property tax relief spending increased to $4.7 billion.
$435 million
— Consolidating school districts with fewer than 1,500 students could result in a total savings of $435 million.
New York City's park system has expanded significantly, but maintaining these facilities requires a more strategic approach to funding and management to ensure equitable conditions across all neighborhoods. By implementing better performance measures and creating stronger incentives for generating earned revenue, the city can improve park quality while reducing reliance on borrowed funds for routine maintenance.
Recommendations related to Affordability
Create a stronger incentive for increasing concessions and other earned revenues by dividing growth in these revenues between the City’s general fund and a new fund dedicated to parks improvements.
The Department of Parks and Recreation should bring all parks to an acceptable condition by establishing a timetable for facility improvements and targeting new resources to the parks with the greatest need.
The city should improve productivity in parks maintenance and operations by establishing measures of park use and unit costs, and experimenting with contracting-out and other innovations to lower unit costs.
The city should encourage preventive maintenance and longer periods of usefulness by funding routine repairs and replacements in the operating budget rather than the capital budget.
The city should institutionalize responsibility for strategic planning for parks by engaging an entity within municipal government with a clear mandate from City Hall.
The city should make the relationships between the Department of Parks and Recreation and its nonprofit partner organizations more transparent and consistent with core guidelines.
Key Data
$780 Million
— Total City funds for Department of Parks and Recreation facilities in fiscal year 2006.
$394 Million
— Amount needed to bring major Department of Parks and Recreation assets to a state of good repair in fiscal year 2007.
$48.1 Million
— Concession revenue generated by the Department of Parks and Recreation in fiscal year 2006.
$63 Million
— Estimated annual amount devoted by nonprofit conservancies to services in the parks.
$111 Million
— Estimated cost of converting 290 public school yards into public playgrounds over a ten-year period.
$386 Million
— Estimated cost of investments to improve eight underdeveloped parks.
Small business leaders in the New York metropolitan region identify the overall cost of doing business as a primary factor for success, yet express significant dissatisfaction with current regional costs. While many firms prefer to remain in their current locations, a substantial portion would consider relocating for cost savings of 20 percent or more, highlighting the need for government policies regarding taxes, fees, and regulations to address these financial burdens.
Recommendations related to Affordability
Government officials should give renewed attention to controlling costs that can be influenced through state or local policy initiatives, as business leaders are dissatisfied with the overall cost of doing business in the region.
Policymakers must evaluate how taxes, fees, zoning rules, and utility regulations adversely affect business costs to improve the regional economic environment.
Regional authorities should foster a favorable business culture and implement public policies that encourage enterprising individuals to start businesses to sustain employment growth.
Key Data
40.0%
— Percentage of New York City business leaders who would relocate for a cost savings of 20% or more.
15.3%
— Percentage of New York City business leaders who would move for a cost savings of less than 10%.
67%
— Percentage of New York City business heads who would expand at their current location.
59%
— Percentage of northern New Jersey business heads who would expand at their current location.
82%
— Percentage of firms in northern New Jersey that have obtained a bank line of credit.
72%
— Percentage of firms in New York City that have obtained a bank line of credit.
New York City and State retirement benefits for public employees have become a significant and rapidly growing fiscal burden, with required pension contributions for the City alone projected to reach $4.7 billion by fiscal year 2008. To improve long-term fiscal health and reduce the tax burden, the current defined benefit pension systems and retiree health insurance subsidies should be redesigned to more closely align with practices of other large public and private employers.
Recommendations related to Affordability
The City and State should require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
The City and State should stop reimbursing retirees for Medicare Part B premiums, as this practice is out-of-line with benefits provided by other large employers.
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans for all new workers.
The New York systems should increase required employee contributions and not limit them to ten years.
The New York system should raise the minimum age requirement for retirement to adopt age thresholds similar to the federal Social Security system.
Pension benefits should be based on a more standard definition of final average salary that takes into account only base salary, excluding overtime.
The current system should define work-related disabilities more rigorously to set more standard criteria.
The City should eliminate the variable supplements available to some retired New York City uniformed workers.
Key Data
$4.7 billion
— Projected annual City pension fund contributions by fiscal year 2008.
$1.5 billion
— Combined cost to the City and State for retiree health insurance in 2004.
$12,000
— The amount of the variable supplement payment for retired New York City uniformed workers scheduled for 2007.
$35.16
— Average total compensation cost per hour for public employers in 2004.
$23.90
— Average total compensation cost per hour for private employers in 2004.
$1,450
— Estimated annual out-of-pocket cost for a typical single City retiree under age 65 if a 50 percent premium contribution policy were implemented.
New York State's health insurance subsidy programs, including Medicaid, Child Health Plus, and Family Health Plus, suffer from fragmented administration that creates barriers to enrollment and increases costs for low-income residents. Implementing an integrated eligibility system, supported by a master database and streamlined application processes, would improve access to these essential benefits while reducing administrative inefficiencies.
Recommendations related to Affordability
The Governor should lead an effort to integrate eligibility determination for major health insurance programs into a new system independent of the current public assistance bureaucracy.
The state should define common information requirements for all health insurance subsidy programs to facilitate easier movement between programs.
The state should standardize procedures relating to documentation requirements and recertification to reduce administrative burdens.
The state should maintain a statewide master eligibility file for all programs to allow for seamless transitions when an individual's income or status changes.
The state should establish multiple, common access points for eligibility and recertification with staff following uniform procedures across the state.
The state should integrate Food Stamp eligibility determination with health insurance program eligibility determination to improve efficiency.
The state should test using school lunch program administrators as facilitated enrollers for health insurance programs to reach more eligible children.
The state should coordinate Earned Income Tax Credit benefit determination with health insurance subsidy eligibility determination to identify and enroll likely eligible individuals.
Key Data
$21 billion
— Annual cost of the Medicaid program in New York State.
$68 million
— Cost of 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
$117
— Administrative cost per recipient for 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
$464 million
— Annual Child Health Plus appropriation in federal fiscal year 1999.
$392 billion
— Annual expenditures of 80 different means-tested programs in 1998.
$3.2 billion
— Annual cash assistance provided by the Supplemental Security Income program to over 600,000 aged and disabled individuals.
New York State faces significant challenges to its economic competitiveness, ranking in the bottom tier for fiscal policy due to high tax and debt burdens and in the middle tier for economic well-being, where it is hampered by high costs of living. To improve its standing, the state must address its high tax burden, which would need to be cut by about one-third, and its debt burden, which would need to be reduced by about one-half to reach the top tier.
Recommendations related to Affordability
New York would have to cut its state and local tax burden by about one-third in order to be in the top tier.
New York would have to cut its debt burden by about one-half in order to be in the top tier.
The state must reverse recent trends in social welfare to avoid continuing to fall in the bottom tier.
The state must alter recent trends in economic well-being to avoid remaining in the middle ranks.
Key Data
12.8%
— State and local taxes as a percent of personal income and capital gains in New York.
19.4%
— State and local debt as a percent of personal income and capital gains in New York.
$34,195
— Combined personal income and capital gains per capita in New York.
10.7
— Electricity rates in cents per kwh in New York.
15.4%
— Population with income below the poverty threshold in New York.
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