The New York City budget is the financial plan that dictates how the city collects revenue and allocates funds to provide public services, manage infrastructure, and support its residents. This page covers CBC’s work on budget gaps, spending growth, revenue forecasting, reserves, and government efficiency.
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 Commission on Government Efficiency should modify its proposed Charter language to allow withdrawals from the Revenue Stabilization Fund only during a recession or severe emergency.
The Commission on Government Efficiency should apply the target size only to the Revenue Stabilization Fund rather than including other funds like the Retiree Health Benefits Trust or General and Capital Stabilization Reserves.
The Commission on Government Efficiency should require deposits to the Revenue Stabilization Fund based on revenue strength alone, including a deposit trigger such as inflation or 3% tax revenue growth.
The Commission on Government Efficiency should increase the target size of the Revenue Stabilization Fund to 16 percent of tax revenues.
The Commission on Government Efficiency should require the City Comptroller to publish an opinion as to the reasonableness and appropriateness of the Revenue Stabilization Fund implementation policy.
The Commission on Government Efficiency should set the Revenue Stabilization Fund's implementation rules and definitions in local law, rather than policy.
Key Data
In June 2026, the CBC highlighted that NYC's projected budget gaps are expected to grow from $7.1 billion in fiscal year 2028 to $9.8 billion in fiscal year 2030 before accounting for future employee raises or new programs.
In June 2026, the CBC recognized that the City's executive budget improved transparency by reversing underbudgeting, adding $5.1 billion in fiscal year 2026, $7.3 billion in fiscal year 2027, and $8 billion annually thereafter, which included correcting $1.6 billion for housing vouchers and $989 million for homeless shelters.
In June 2026, the CBC reported that 61% of the budget-balancing actions over fiscal years 2026 and 2027 do not stabilize the budget long term, relying on $5 billion in one-shots and $2.8 billion in delays and stretch-outs.
In June 2026, the CBC cautioned that the City's fiscal cushion is dangerously thin, as the General Reserve is at the statutory minimum of $100 million and the Rainy Day Fund balance is just $2 billion, compared to a potential recessionary shortfall of $15 billion over two years.
In March 2026, the CBC pointed out that between fiscal years 2021 and 2025, City-funded spending grew 6.8% annually, outpacing the 5.2% annual growth in tax revenues that supports it.
Proposed Charter amendments to New York City's Revenue Stabilization Fund should be strengthened by increasing the target size to 16% of tax revenues and restricting withdrawals to recessions or severe emergencies. Additionally, deposits should be mandated based on revenue strength, and implementation rules should be set in local law rather than flexible policy to ensure the fund is adequately resourced.
Recommendations related to City Budget
The Commission on Government Efficiency should modify its proposed Charter language to allow withdrawals from the Revenue Stabilization Fund only during a recession or severe emergency.
The Commission on Government Efficiency should apply the target size only to the Revenue Stabilization Fund rather than including other funds like the Retiree Health Benefits Trust or General and Capital Stabilization Reserves.
The Commission on Government Efficiency should require deposits to the Revenue Stabilization Fund based on revenue strength alone, including a deposit trigger such as inflation or 3% tax revenue growth.
The Commission on Government Efficiency should increase the target size of the Revenue Stabilization Fund to 16 percent of tax revenues.
The Commission on Government Efficiency should require the City Comptroller to publish an opinion as to the reasonableness and appropriateness of the Revenue Stabilization Fund implementation policy.
The Commission on Government Efficiency should set the Revenue Stabilization Fund's implementation rules and definitions in local law, rather than policy.
Key Data
16%
— The recommended target size of the Revenue Stabilization Fund relative to the preceding year's tax revenue to cover two years of recessionary losses.
12%
— The proposed target size of the Revenue Stabilization Fund in the Charter amendment, which is considered too small.
3%
— The tax revenue growth rate suggested as a deposit trigger to ensure the Revenue Stabilization Fund is reasonably resourced.
1%
— The minimum threshold of City funds for revenue losses or increased expenditures to define a severe emergency allowing withdrawals.
50%
— The portion of the Revenue Stabilization Fund that the proposed amendment would allow to be used for any reason.
$100-billion-plus
— The City's liability for retiree health insurance, which should not be mixed with rainy day reserves.
The budgets are in. Now find out what matters. With the Fiscal Year 2027 New York State and New York City budgets finalized, CBC invites you to a timely briefing with our research staff on what the budgets mean for New York's fiscal outlook. We'll highlight the most significant policy…
New York City's fiscal year 2027 budget agreement fails to address the city's underlying structural budget problems, relying on one-time savings and cost shifts that leave the city vulnerable to future fiscal gaps. While the budget includes positive steps like increasing the General Reserve by $350 million and expanding the Fair Fares program, it remains unprepared for a potential recession and lacks a transparent accounting of the full costs associated with labor contracts and the mayor's agenda.
Recommendations related to City Budget
The Chief Savings Officers’ work should continue, and savings should ramp up over time.
The City must take steps to manage CityFHEPS’ growth or it will continue to be a budget buster.
The City must address the fact that the Rainy Day Fund is far too small to prepare for a potential economic slowdown or recession.
The City needs to provide a financial plan that includes the full cost of the Mayor’s agenda or likely labor contracts to accurately account for future budget gaps.
Key Data
15 percent
— The projected annual increase for the CityFHEPS housing voucher program.
$350 million
— The amount by which the General Reserve is being increased for next year.
200 percent
— The expansion of the Fair Fares program up to this level of the Federal Poverty Level.
The Fiscal Year 2027 Executive Budget is balanced but relies heavily on one-time resources and cost-shifting, leaving significant long-term fiscal gaps that grow to $9.8 billion by 2030. To achieve sustainable stability, the city must prioritize recurring savings, increase reserves, and reduce spending growth rather than relying on temporary fixes.
Recommendations related to City Budget
Double Executive Order 12 saving initiatives to $2 billion in fiscal year 2027 and increase by $1 billion annually thereafter to reduce spending without cuts to critical services.
Implement additional actions to reduce costs stemming from CityFHEPS, due process (Carter) cases, and other fast-growing areas to address unsustainable growth.
Fund additional new spending and City Council initiatives with recurring savings rather than one-time resources.
Increase the fiscal year 2027 General Reserve to $500 million to protect against economic volatility and unexpected spending shocks.
Key Data
$12.7 billion
— Total value of gap-closing actions proposed to balance the budget and support new priorities.
$9.8 billion
— Projected budget gap for fiscal year 2030, highlighting the city's long-term fiscal challenges.
$5.0 billion
— Amount of one-shot actions included in the budget that patch holes but do not solve long-term problems.
$10.7 billion
— Reduction in pension contributions through fiscal year 2032 resulting from a stretch-out gimmick.
$15.6 billion
— Increase in pension contributions from fiscal years 2033 through 2037 caused by the pension stretch-out.
$3.5 billion
— Total amount of newly added spending in the budget, including administration priorities and existing programs.
The New York State fiscal year 2027 budget increases spending by at least 8 percent, leaving a structural gap exceeding $17 billion while failing to bolster reserves. Although the state provided $2.4 billion in support for New York City, it simultaneously implemented fiscal gimmicks and taxes that shift long-term costs to future taxpayers and avoid necessary accountability for city finances.
Recommendations related to City Budget
The State should continue to resist calls to increase personal income and corporate taxes in the coming year.
The State should hold New York City accountable for shoring up its own finances to prevent future requests for massive aid or tax increases.
The State should publish basic financial plan tables with the budget agreement to ensure transparency regarding how public funds are being spent.
Key Data
$17 billion
— Structural gap in the state budget.
$30 billion
— Amount by which decade-long spending growth exceeds inflation.
$1 billion
— Cost of energy rebates provided across millions of households.
$700 million
— Annual cost of increasing school aid to districts with shrinking enrollment.
$547 million
— Cost of increasing Tier 6 pension benefits.
$2.4 billion
— Total support provided to New York City.
Mayor Mamdani's "Block by Block" housing plan aims to increase housing production through rezoning, streamlined review processes, and building code reforms to lower construction costs. Given the city's uncertain fiscal outlook, the administration must leverage state and federal resources while partnering with the private sector to meet housing needs.
Recommendations related to City Budget
The City should take full advantage of State and federal resources and partner with the private sector to deliver the housing that New Yorkers need.
The Administration should make changes to the Mayor’s Management Report to publicly track progress of the housing plan.
The City should reform building codes, including unique requirements for elevators and plumbing that contribute to New York having the world’s highest construction costs.
The City should maximize PACT, the Preservation Trust, and new infill development as the most viable strategies to swiftly repair and rebuild NYCHA housing.
The City should allow more as-of-right development, especially near transit, to boost housing production.
$124.7 billion is the amount Mayor Mamdani proposes to spend in fiscal year 2027. The budget process is never simple, but this year the intensity ratcheted up. Revealing a large budget gap, the City administration negotiated with the State for aid to bridge it while simultaneously pursuing its ambitious programmatic…
Sherif Soliman has more than 30 years of experience in government and currently serves as Budget Director of the New York City Mayor’s Office of Management and Budget. In this role, he oversees the city’s fiscal policy, including the development of the expense and capital budgets, the city’s bond and…
New York City's fiscal year 2027 executive budget relies on short-term strategies and a pension gimmick to close gaps, while City-funded spending is projected to grow by 28 percent, or $24.4 billion, between fiscal years 2025 and 2030. Outyear budget gaps are expected to swell to nearly $10 billion by fiscal year 2030, highlighting the need for a more holistic transformation of government spending.
Recommendations related to City Budget
The City should prioritize a full-scale effort to shrink spending that does not deliver value for New Yorkers rather than relying on short-term strategies.
The City should pursue a holistic transformation of government services to achieve excellence rather than relying on the types of maneuvers seen in the past.
The City should avoid relying on pension gimmicks that balance the current budget on the backs of future residents.
The City should avoid raising already nation-leading taxes, which risks competitiveness rather than reinforcing attractiveness.
Key Data
28 percent
— The rate of growth for City-funded spending between fiscal years 2025 and 2030.
$24.4 billion
— The total increase in City-funded spending between fiscal years 2025 and 2030.
$10 billion
— The projected size of outyear budget gaps by fiscal year 2030.
$1.2 billion
— The amount of the accrual sweep used as a one-shot budget fix for the fiscal year 2027 budget gap.
Expanding the Fair Fares NYC program to 250 percent of the federal poverty level would cost $146 million annually, providing a more targeted and cost-effective transit subsidy than making buses fare-free, which would cost over $900 million in the first year. Instead of eliminating fares, the city should focus on improving bus speeds through infrastructure investments and increasing enrollment in the existing half-fare program.
Recommendations related to City Budget
The City should raise the Fair Fares NYC eligibility threshold to 250 percent of the FPL to better serve low-income residents.
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 through operational changes.
Key Data
$900 million
— The estimated cost to the City in the first year of implementing a fare-free bus program.
$146 million
— The projected annual cost to the City to expand Fair Fares NYC eligibility to 250 percent of the federal poverty level.
$86 million
— The cost of the existing Fair Fares NYC program in fiscal year 2025.
722,000
— The number of additional New Yorkers who would become eligible for Fair Fares NYC if the eligibility threshold were raised to 250 percent of the federal poverty level.
7.0 miles per hour
— The average speed of New York City buses.
400,000
— The number of New Yorkers currently enrolled in the Fair Fares NYC program.
Expanding the Fair Fares NYC program by raising the income eligibility threshold to 250 percent of the federal poverty level would cost $146 million annually, bringing the total program cost to $232 million. This expansion would make nearly 2 million New Yorkers eligible for transit subsidies, while simultaneously improving program outreach and enrollment to address current low utilization rates.
Recommendations related to City Budget
The City should raise the Fair Fares income eligibility threshold from 150 percent to 250 percent of the federal poverty level to increase economic opportunities for low-income residents.
The City should improve education and outreach to increase program utilization.
The City should simplify enrollment to increase program utilization.
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 expanding the Fair Fares income eligibility threshold.
$232 million
— The total annual cost of the Fair Fares program following the proposed expansion.
722,000
— The number of additional New Yorkers who would be eligible for Fair Fares under the proposed expansion.
2 million
— The total eligible population for the Fair Fares program after 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, including outmigration, rising rents, and a projected $3.5 billion budget deficit despite strong revenues. To ensure future competitiveness, city leaders must prioritize fiscal discipline by eliminating ineffective programs, improving government efficiency, and avoiding tax increases that threaten affordability.
Recommendations related to City Budget
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.
Relief from Albany’s class size mandate could unlock $1.2 billion while preserving smaller classes where they matter most.
Aligning school budgets with declining enrollment could save $400 million.
Fixing procurement could yield $700 million.
Maintaining current city-funded housing vouchers would save $330 million.
The Chief Savings Officers must dig deeper to eliminate spending that isn’t serving people well.
Key Data
$3.5 billion
— Projected amount the city will spend more than it received this year.
$1.1 billion
— The mayor's recurring savings target for the city budget.
$1.2 billion
— Potential savings from relief regarding Albany’s class size mandate.
$700 million
— Potential savings from fixing city procurement processes.
$400 million
— Potential savings from aligning school budgets with declining enrollment.
$330 million
— Potential savings from maintaining current city-funded housing vouchers.
The proposed New York State budget includes $1.0 Billion in new local aid for New York City, but also threatens the city's economic competitiveness with tax hikes that could push its combined business tax rate to a nation-leading 21.37%. To ensure long-term stability, the state must hold the city accountable to a sustainable fiscal transition plan while rejecting costly tax increases and mandates like the class size reduction rule.
Recommendations related to City Budget
The State should hold the City accountable for developing a fiscally sustainable transition plan that includes greater savings, more transparency, and stronger reserves policy, in exchange for more aid.
The State should repeal the Class Size Reduction mandate and extend Mayoral control of schools by four years.
The State should reject proposed personal income, corporate income, unincorporated business, pass-through entity, and real property transfer tax increases.
The State should reject economic development spending unless it has proven effective, including the NYC Musical and Theatrical Production Tax Credit.
Key Data
$1.0 Billion
— Amount of new local aid to New York City driving spending growth in the State Operating Funds.
21.37%
— Combined business tax rate for New York City if both the State and City corporate tax increases are enacted.
10.80%
— Proposed New York City corporate tax rate for finance firms under the Assembly and Senate one-house budgets.
4.4%
— Proposed New York City unincorporated business tax rate on income over $5 million.
75%
— Proposed reduction of New York City's pass-through entity tax credit, down from 100%.
$150 Million
— Proposed increase for the New York City Musical and Theatrical Production Tax Credit.
The current administration's initial savings plan is a positive first step, but it must be expanded beyond the $1.7 billion target to ensure long-term fiscal health. Achieving true affordability requires a fundamental transformation in government operations and a commitment to eliminating spending that does not directly benefit residents.
Recommendations related to City Budget
The administration will have to go much further than the $1.7 billion target.
The administration must be as ambitious about government efficiency as it is about affordability.
The administration must pursue real transformation on how the government is run.
The administration must stop spending money that does not help New Yorkers.
Key Data
$1.7 billion
— The savings target set by the administration that must be exceeded.
New York City's public school enrollment declined by 163,046 students, or 17%, between school years 2014-15 and 2023-24, yet school budgets have not decreased accordingly due to "hold harmless" funding policies. To address a major budget gap, the City should align school funding with actual enrollment to save $400 million annually and seek relief from the state's class size reduction mandate to save an additional $1.2 billion.
Recommendations related to City Budget
The City should fund schools based on actual enrollment and student need today, which would save $400 million.
The City should merge schools whose enrollment has shrunk so much they require disproportionate administrative overhead, beginning with a close review of the 500 schools under 300 students, as of school year 2022-23.
The City should get relief from the State class size reduction mandate, which would save $1.2 billion.
The City should pause construction of new schools until administrative actions have been taken to increase utilization of existing schools.
The State should extend mayoral control for four years, as proposed by Governor Kathy Hochul.
The City needs to right this ship and reestablish weighted student funding as the primary allocation method for school budgets.
Key Data
$1.2 Billion
— Estimated annual savings for the City if the State rescinded the class size reduction mandate.
$400 Million
— Estimated annual savings if the City resumes funding schools based on actual enrollment and student need.
163,046
— Decrease in public school enrollment between school years 2014-15 and 2023-24.
17%
— Percentage decrease in public school enrollment between school years 2014-15 and 2023-24.
380
— Number of schools below 60% capacity in school year 2022-23, up from 187 in school year 2014-15.
$18,294
— Average per-student costs in small schools with fewer than 400 students.
Proposed enhancements to Tier 6 pension benefits threaten to cost the state, local governments, and school districts billions of dollars annually, potentially driving property tax increases or service reductions. These changes would bypass the state's property tax levy cap, further destabilizing the budgets of New York City and other local entities.
Recommendations related to City Budget
New York State should not enhance Tier 6 pension benefits.
Key Data
$438 million
— Annual cost of Tier 6 enhancements enacted in 2022 and 2024 to State and local governments.
$700 million
— 2022 estimate for just one of the additional proposed changes to reduce progressive employee contributions.
2 percentage points
— Threshold for pension contribution rate growth that triggers an exemption to the State’s property tax levy cap.
$127 billion is the size of NYC's Preliminary Budget for Fiscal Year 2027. After reporting a yawning $12 billion budget gap estimate, Mayor Mamdani revised that number down to $5.4 billion, thanks in part to Governor Hochul's willingness to chip in. But don't let the shrinking gap fool you: the…
The CityFHEPS rental voucher program has seen its costs triple in three years to a projected $1.7 billion, creating an unsustainable fiscal trajectory that threatens the city's budget. To address this, the city should cap the number of vouchers at current levels, which would save $330 million in fiscal year 2027 and $3.0 billion over the five-year financial plan.
Recommendations related to City Budget
The City should cap the number of CityFHEPS vouchers at the current level to restrain unaffordable spending growth.
The City should not pursue an unaffordable expansion of the CityFHEPS program that would explode costs even higher.
The City should leverage State and federal housing subsidy programs and partner with the private sector to increase housing production.
The City should scrutinize large programs and drill into agency budgets to eliminate wasteful spending and improve efficiency.
When issuing vouchers to new households from turnover, priority should be given to those with the greatest need.
Key Data
$330 million
— The amount the City would save in the fiscal year 2027 budget by capping the number of CityFHEPS vouchers.
$3.0 billion
— The amount the City would save over the five-year financial plan by capping the number of CityFHEPS vouchers.
$1.7 billion
— The projected cost of the CityFHEPS program for the current fiscal year.
64,439
— The number of households served by the CityFHEPS program as of October 2025.
21.5 percent
— The increase in the number of households in shelters, excluding migrants and asylum seekers, over the last three fiscal years.
$9.5 billion
— The amount added to the preliminary budget for CityFHEPS over five years.
New York City faces a $9.4 billion budget gap for fiscal years 2026 and 2027, driven by spending that has outpaced revenue growth and inflation. To address this, the city should prioritize operational efficiency and spending restraint rather than relying on tax increases and one-time budget maneuvers that weaken long-term fiscal stability.
Recommendations related to City Budget
Reject tax increases that would harm the City’s economic competitiveness and place additional burdens on residents and businesses.
Reduce ineffective spending and improve operational efficiency, including spending on education, procurement, and administrative operations.
Right-size spending in areas where demand has changed, such as adjusting school funding to reflect declining enrollment and managing the growth of the FHEPS housing voucher program.
Build and maintain adequate reserves by not drawing down the rainy day fund or RHBT and including $1 billion of in-year reserves, which will help protect the City against economic downturns and unexpected fiscal shocks.
Key Data
$9.4 billion
— The combined fiscal year 2026 and 2027 budget gap after adjusting for updated revenue and spending forecasts.
$16 billion
— The amount by which fiscal year 2026 spending exceeds what it would have been if it had grown at the rate of inflation since fiscal year 2017.
$2.6 billion
— The amount of recurring savings identified that could be achieved before drilling down into agency operations.
$3.7 billion
— The revenue expected from the proposed property tax increase.
20,000
— The number of vacant positions in the City, including 16,000 full-time positions.
$1 billion
— The potential annual savings from relief from the State class size reduction mandate.
The proposed fiscal year 2027 budget relies on depleting reserves and optimistic revenue projections, creating potential long-term fiscal instability. To ensure long-term solvency, the city should prioritize finding efficiencies and reducing unnecessary spending rather than raising taxes or relying on one-shot funding sources.
Recommendations related to City Budget
The Administration should eliminate spending that does not improve New Yorkers' lives and make government more efficient and effective.
The Administration should not raise taxes, which will make the City less attractive for New Yorkers who fund our schools, police, and sanitation.
The City should redouble its efforts to find more substantial savings by the Executive Budget and commit to an affordable, efficient government.
The Mayor should partner with municipal unions to redesign work processes and broaden responsibilities, then share the gains.
The City should secure relief from the State class size mandate to achieve up to $1 billion in savings.
Key Data
$127 billion
— The total amount of the city's preliminary budget that the administration must ensure is used well.
$1.2 billion
— The amount pulled from the Rainy Day Fund and the Retiree Health Benefits Trust to balance the city budget.
$6.7 billion
— The projected budget gap in fiscal year 2028.
$100 million
— The reduced level of in-year reserves, leaving the city with virtually no budget cushion.
$6.6 billion
— The amount by which tax revenues are estimated to be higher than expected over two years.
60 percent
— The portion of city tax revenues generated by economically sensitive taxes.
1,039,069 is the number of kids under the age of five in New York who could ultimately qualify for free or subsidized childcare under the Hochul/Mamdani plan. How should the State and City design a flexible program that meets the needs of diverse families? How should it be phased? What…
51 is the number of members in the New York City Council. Six weeks before the Council was scheduled to vote on its next leader, Council Member Julie Menin announced herself the presumptive Speaker after garnering the support of a supermajority of her council colleagues. On this episode of What's…
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…
Mayor-elect Mamdani's upcoming budget proposal faces a significant $5 billion to $8 billion gap, while the current plan continues to underfund at least $4 billion in annual planned spending, including $1 billion for CityFHEPS and $600 million for homeless shelters. To address these fiscal challenges, the administration must prioritize reining in spending growth, improving operational efficiency, and ending the practice of underbudgeting for known costs.
Recommendations related to City Budget
The Mamdani Administration should rein in spending growth by shrinking low impact services.
The administration should improve efficiency by managing better and collaborating with labor as the best way to balance the budget and deliver on priorities.
The administration should end the City’s practice of underbudgeting for known spending, which distorts the fiscal picture and undermines smart choices.
The administration should set aside funds to soften the initial blow of federal cuts and protect vulnerable New Yorkers from the next recession.
Key Data
$5 billion to $8 billion
— The estimated budget gap that Mayor-elect Mamdani's first budget proposal will have to close.
$4 billion
— The amount of annual planned spending in future years that the budget continues to underfund.
$1 billion
— The amount of annual planned spending underfunded for the CityFHEPS program.
$600 million
— The amount of annual planned spending underfunded for homeless shelters.
New York City faces a significant fiscal challenge with a projected $6 billion to $8 billion budget gap and a need to prepare for potential federal funding cuts and economic downturns. To address these issues, the city must implement disciplined financial management, including accurate revenue forecasting, performance-based budgeting, and strategic adjustments to hiring and tax policies.
Recommendations related to City Budget
The administration should implement a savings plan that streamlines operations, reduces duplication, phases out lower-impact programs, leverages technology to automate manual processes, and increases productivity in collaboration with labor unions.
The administration should launch a citywide Performance Management System, similar to CompStat, to deliver the efficient high-quality services New Yorkers deserve.
The City should shift vacant positions across agencies and units based on needs and eliminate excess vacancies.
The City should increase the General Reserve by $1 billion a year, from $1.25 billion to $2.25 billion, to strengthen the City’s ability to absorb the initial impact of unexpected cuts or delays in federal aid.
The City should pass a Local Law to strengthen the Revenue Stabilization Fund by requiring deposits during economic expansions, restricting withdrawals to a recession or severe emergency, and setting the fund’s target size.
The administration should identify the impact and cost-effectiveness of each service, preserve what works well, and cut or shrink what does not, even if popular.
The administration should present a full and realistic accounting of revenues and expenses.
The administration should work with labor to share the fiscal benefits of increased efficiency to fund raises that otherwise may not be affordable, while bringing City spending in line with revenues.
Key Data
$6 billion to $8 billion
— Projected budget gap the incoming administration must close.
$4.5 billion
— Amount by which the City's projections understate fiscal year 2027 spending.
$2.3 billion
— Cumulative amount by which annual expenses exceeded annual revenues over the past three fiscal years.
$14.0 billion
— Estimated amount needed to cover two years of tax revenue declines during a recession.
$2.0 billion
— Current balance of the Revenue Stabilization Fund, also known as the Rainy Day Fund.
11 percent
— Percentage of New Yorkers who believe the City spends their tax dollars wisely.
New York City's shrinking share of millionaires, which fell from 6.5% to 4.2% between 2010 and 2022, threatens the tax revenue needed to fund essential public services. To reverse this trend and ensure long-term prosperity, the city must prioritize housing production, improve service quality, and maintain stable public finances rather than relying on further tax increases.
Recommendations related to City Budget
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.
Stable public finances preserve services for all New Yorkers.
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.
$18 billion
— Personal income taxes will provide $18 billion in revenue in fiscal year 2026.
35%
— Between 2010 and 2022, the share of U.S. millionaires living in New York City fell 35%.
$2.5 billion
— If the City had maintained its 2010 share, it would have collected $2.5 billion more in personal income tax revenue in 2022 alone.
14.776%
— New York State’s and City’s combined top marginal rate, 14.776% for the highest earners, tops the nation.
91,000
— In 2024, 91,000 more residents moved out of the city to other parts of the U.S. than moved in.
New York City allocates $1.4 billion, or 1.2 percent of its total fiscal year 2026 budget, to parks, a figure that has remained relatively steady for decades when accounting for fringe benefits, pension contributions, and debt service. While spending on daily operations has increased three-fold since fiscal year 2004, the share of total parks spending dedicated to these operations has declined from 78 percent to 64 percent as debt service costs grew six-fold.
Key Data
$1.4 billion
— Total allocation for parks in the Fiscal Year 2026 Adopted Budget.
1.2 percent
— Share of the total Fiscal Year 2026 Adopted Budget allocated for parks.
$516 million
— Debt service costs for parks in fiscal year 2026, which grew from $81 million in fiscal year 2004.
$916 million
— Spending on daily park operations in fiscal year 2024, an increase from $288 million in fiscal year 2004.
64 percent
— Share of total parks spending dedicated to daily operations in fiscal year 2026, down from 78 percent in fiscal year 2004.
0.6 percent
— Share of the total Fiscal Year 2026 Adopted Budget allocated to the Department of Parks and Recreation agency budget.
Earlier this month, 221 engaged New Yorkers from the business community, government, and labor turned out at 8:30 in the morning for CBC's "Mayoral Smart Choices” conference, to hear 15 experts who have seen and done it all before give their prescriptions and advice for how to get it done…
The proposed legislation A2747A/S2536A would mandate prevailing wages for off-site custom fabrication, significantly increasing the costs of state and locally funded capital projects. By forcing these higher labor standards on off-site production, the bill threatens to eliminate the efficiency and cost savings currently achieved through modular construction methods.
Recommendations related to City Budget
The Governor should veto A2747A/S2536A to avoid increasing the costs of state and locally funded capital projects.
The State should allow the City and State to continue to use off-site custom fabrication without prevailing wages when it would reduce the time or cost of a capital project.
Key Data
20 percent to 50 percent
— Modular building can accelerate project delivery by this range.
20 percent
— Modular building can reduce costs by up to this amount.
$1 million
— Cost per structure for prefabricated public restrooms.
$3.5 million
— Cost for the typical park bathroom built fully on-site.
New York City faces a precarious budget situation where current revenues are insufficient to sustain spending, necessitating a focus on fiscal discipline and efficient service delivery. To ensure a high quality of life and prevent further outmigration, the city must prioritize effective, evidence-based services while trimming unsustainable programs.
Recommendations related to City Budget
The City must keep its fiscal house in order by ensuring government does not attempt to do everything and lives within its means.
City government needs to deliver a high quality of life, including quality schools, clean and safe streets, and reliable transportation, to ensure people and businesses remain in the city.
The City and municipal unions should work together to modernize government to share the financial benefits of more efficient services and improved career opportunities.
The City should collaborate with nonprofit providers to focus resources on the most effective evidence-based services while shrinking those that do not improve lives.
The City needs civic leadership focused on the good of all New Yorkers that is willing to restrain special interests in favor of the greater good.
Key Data
$453 million
— The amount of debt New York City had to repay fifty years ago, which it could not afford, leading to the fiscal crisis.
$120 billion
— The amount New York City currently spends annually, which should be used efficiently to deliver a high quality of life.
Seventeen bills currently under consideration would increase public costs by expanding pension, disability, and death benefits for public employees without providing offsetting savings or public services. These measures bypass the standard budget process and would impose significant, recurring financial burdens on state and local governments.
Recommendations related to City Budget
The Governor should veto the 17 bills that increase costs to New York State and local governments outside of the budget process without enhancing public services.
The state should avoid granting targeted benefit enhancements that both increase costs and may encourage further expansions.
Key Data
$30.0 million
— Immediate estimated costs for twelve of the bills with complete fiscal notes.
$18.1 million
— Annual recurring costs for twelve of the bills with complete fiscal notes.
$5.9 million
— Annual cost for S6486/A6942, which reduces the length of service requirement for Tier 3 members of the Unformed Sanitation Force and Uniformed Correction Service.
$5.5 million
— First-year cost for S6671/A7360, which increases the pension benefit for certain Nassau County corrections officers.
$4.9 million
— First-year cost for S5083/A5898, which provides an in-service death benefit for retirement-eligible members of NYSLRS employed as State-paid judges.
$4.2 million
— Annual cost for S6640/A6784, which extends the 'death gamble' benefit to Tier 4 and Tier 6 Special Plan transit members of NYCERS.
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's fiscal year 2026 budget faces a $3 billion shortfall for planned programs and future budget gaps reaching up to $10 billion, driven by underbudgeted expenses and spending that exceeds current revenues. Despite these fiscal pressures, the budget fails to allocate funds to the Rainy Day Fund or prepare for potential federal cuts, relying instead on past revenue surpluses to cover current obligations.
Recommendations related to City Budget
The City should deposit at least $2 billion into the Rainy Day Fund to help preserve services and stability during the next recession.
Key Data
$122.7 billion
— The total fiscal year 2026 spending obligation once adjusted for prepayment of fiscal year 2026 obligations and underbudgeted programs and expenses.
7.6 percent
— The City-funded spending increase from fiscal year 2025 to fiscal year 2026, once adjusted for prepayments and underbudgeted expenses.
Over $3 billion
— The amount the fiscal year 2026 budget is short to pay for likely expenses and planned programs.
$8 billion to $10 billion
— The size of future budget gaps, once adjusted for underbudgeted programs.
$610 million
— The amount that fiscal year 2025 spending obligations exceeded fiscal year 2025 revenues.
The New York City fiscal year 2026 budget agreement increases spending at more than twice the rate of inflation while leaving future budget gaps of over $9 billion. To better prepare for potential economic downturns and federal funding cuts, the City should prioritize efficiency, shrink low-impact programs, and set aside $3 billion in reserves.
Recommendations related to City Budget
The City should put aside $3 billion to soften the first blows of federal cuts and protect against a future recession.
The City must increase efficiency and shrink low impact programs to stabilize the budget and secure the future.
The City must prioritize critical services, manage them to deliver results, and protect its fiscal foundation to become more affordable, safe, and stable.
Key Data
$3 billion
— Amount the City should put aside to soften the first blows of federal cuts and protect against a future recession.
$9 billion
— Projected future budget gaps after accounting for underbudgeted expenses.
$11 billion
— Estimated revenue loss over two years that a typical recession would cause.
New York City faces significant fiscal challenges as spending outpaces revenue, with only 11% of residents believing the city wisely manages its $115 billion annual budget. To restore competitiveness and fiscal stability, the city must prioritize sustainable spending, eliminate ineffective programs, and focus on infrastructure maintenance rather than relying on unsustainable borrowing.
Recommendations related to City Budget
Leaders should choose to trim spending to sustainable levels, build up rainy day funds during good times, and negotiate labor deals that balance fair wages with fiscal reality.
Leaders need to choose management systems that deliver results and hold officials accountable.
The city should focus on evidence-based programs in education and mental health and make the hard choice to eliminate ineffective initiatives, regardless of their political popularity.
The city must choose to hold the line on taxes, pull out all the stops to boost housing production, make public spaces vibrant, and use only the tax incentives proven to grow our economy.
The city needs to first choose to get our roads, bridges, and buildings into good shape or it will have no foundation on which to build its future economy.
Key Data
$115 Billion
— The size of New York City's annual budget.
11%
— The percentage of New Yorkers who say the city is wisely spending its budget.
100,000
— The number of net residents New York City lost to Florida between 2018 and 2022.
$13.7 Billion
— The amount of personal income lost to Florida between 2018 and 2022 due to resident migration.
Mayoral candidates for New York City were evaluated on their stances regarding fiscal management, government efficiency, and capital investment strategies. The assessment highlights key budgetary figures, including the $111 billion five-year capital program and the $1.2 billion cost of the CityFHEPS housing voucher program, while probing candidates on their approaches to property tax reform and agency accountability.
Key Data
$111 billion
— The total value of the City's five-year capital program.
$1.2 billion
— The cost of the CityFHEPS housing voucher program in fiscal year 2025.
50%
— The current share of capital spending allocated to the State of Good Repair category in the Ten-Year Capital Strategy for Fiscal Years 2026-2035.
New York City residents report low satisfaction with government services and spending, with only 11 percent rating government spending as excellent or good. Most residents view the majority of city services as inadequate, highlighting a need for improved fiscal and management choices to address these concerns.
Key Data
11 percent
— of residents rate government spending excellent or good, down from 21 percent in 2017.
27 percent
— of residents rate government services excellent or good, substantially down from 44 percent in 2017.
23 out of 33
— services are rated fair or poor by the majority of New Yorkers.
New York City should establish clear, legally mandated rules for its Rainy Day Fund, including specific target sizes and triggers for deposits and withdrawals to ensure long-term fiscal stability. Additionally, the city should implement stricter transparency requirements for financial plans, requiring detailed explanations whenever revenue or expenditure estimates deviate significantly from historical trends or independent projections.
Recommendations related to City Budget
Require the Mayor and City Council to enact a local law that details the City’s RSF deposit, withdrawal, and target size policy, with withdrawals from the RSF prohibited until such a law is in effect.
Identify the minimum target size for the Rainy Day Fund that is 16 percent or more of tax revenue.
Require deposits into the Rainy Day Fund when tax revenue growth is at least 3 percent, year-over-year.
Limit the first withdrawal from the Rainy Day Fund following the occurrence of a recession or severe emergency to two-thirds of the balance of the fund.
Require the Charter to include new transparency requirements for financial plans when revenues or expenditures vary significantly year-over-year or differ substantially from estimates made by the City and State Comptrollers.
Require an explanation of any tax revenue change greater than 10 percent from the prior fiscal year.
Require an explanation of any expenditure change in any major program or unit of appropriation greater than 10 percent and at least $10 million from the prior fiscal year.
Require an explanation of any major program or unit of appropriation expenditure for the ensuing fiscal year where the estimate by the Office of the City Comptroller or the Office of the New York State Comptroller varies 20 percent or more.
Maintain the current process for setting Units of Appropriation (UAs) rather than changing the Charter.
Ensure that citywide needs play a substantial role in zone and land use decision making.
Key Data
16%
— Minimum target size for the Rainy Day Fund as a percentage of tax revenue.
3%
— Threshold for year-over-year tax revenue growth that triggers mandatory deposits into the Rainy Day Fund.
2%
— Threshold for a severe emergency (revenue decrease or expenditure increase) that allows for withdrawals from the Rainy Day Fund.
10%
— Threshold for tax revenue changes requiring an explanation in the financial plan.
$10 Million
— Minimum dollar amount for expenditure changes requiring an explanation in the financial plan.
20%
— Threshold for variance between City/State Comptroller estimates and City estimates requiring an explanation.
Mayor Adams' Fiscal Year 2026 Executive Budget increases spending to an unaffordable level of $121 billion while failing to adequately prepare for potential federal funding cuts or an economic recession. The budget faces future gaps of $8 billion to $10 billion and is currently $3 billion short of the funding required to maintain existing service levels.
Recommendations related to City Budget
The City should add $1 billion to 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.
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.
Key Data
$121 billion
— Fiscal year 2026 proposed costs, when adjusted for the expenses prepaid in the current year and expected costs not funded.
$8 billion to $10 billion
— Range of future budget gaps once underbudgeted expenses are added.
$3 billion
— Amount the fiscal year 2026 budget is short to fund existing service levels, like FHEPS, overtime, and public assistance.
$1 billion
— Amount recommended to be added to next year’s General Reserve to soften the first blows of federal cuts.
$2 billion
— Amount recommended to be added to the Rainy Day Fund.
New York City faces significant fiscal risks from potential federal budget cuts that could impact vital services like housing, health care, and education, which are supported by a portion of the $7.4 billion in federal aid the city currently receives. To mitigate these risks and address existing structural deficits, the city must exercise fiscal discipline by halting new spending, bolstering reserves, and ending the practice of using inaccurate budget estimates.
Recommendations related to City Budget
The city should hold the line on new spending by ensuring the Executive and Adopted Budgets do not add or expand programs.
The city should buttress the fiscal year 2026 General Reserve by adding at least $1 billion to help absorb the immediate blow of federal cuts.
The city should strengthen the Rainy Day Fund by adding $500 million to be reserved for short-term emergencies like a recession.
The city should restrain spending growth through a "Program to Eliminate the Gap" to streamline administrative overhead and increase efficiency.
The city should end the budget-estimating gimmickry to ensure New Yorkers receive accurate and reasonable estimates of revenue and expenses.
Key Data
$7.4 billion
— Amount of federal aid the city receives that supports vital services like child care vouchers, family shelters, school food programs, and education.
$1.4 billion
— Annual federal operating support that the New York City Housing Authority depends on.
$2 billion
— Amount of federal dollars that fund more than 96,000 housing vouchers administered by the New York City Housing Authority.
$1.1 billion
— Amount the city spent more on fiscal year 2024 obligations than it took in.
$4 billion
— Amount of annual underbudgeting that drastically understates the size of future gaps.
$10 billion
— Potential size of future budget gaps even without federal cuts or a recession.
New York City faces significant fiscal uncertainty as federal aid, which accounts for $7.4 billion of the fiscal year 2026 preliminary budget, is at risk of reduction. To manage these potential cuts and address existing issues like $4 billion in annual underbudgeting, the city must prioritize fiscal discipline by bolstering reserves and restraining spending growth.
Recommendations related to City Budget
The City should hold the line on new spending in the Executive and Adopted Budgets.
The City should buttress the General Reserve with at least another $1 billion in fiscal year 2026 to help absorb the immediate blow of federal cuts.
The City should strengthen the Rainy Day Fund by depositing $500 million and reserve the Fund for a short-term emergency like a recession, not for temporary mitigation of recurring federal cuts.
The City should implement a Program to Eliminate the Gap (PEG) to restrain spending growth, focused on streamlining administration, increasing efficiency, and shrinking programs that deliver less value to residents.
The City should end the budget gimmickry and present accurate, reasonable estimates of expenses and revenue, as required by the City Charter.
Key Data
$7.4 billion
— Federal aid comprises $7.4 billion of the City’s Fiscal Year 2026 Preliminary Budget.
$1.1 billion
— The City spent $1.1 billion more on fiscal year 2024 obligations than it received.
$4 billion
— Underbudgeting has grown to $4 billion a year, which understates future budget gaps by billions of dollars.
$91 billion
— The State expects to receive $91 billion in federal aid for fiscal year 2026.
$1.4 billion
— Last year, $1.4 billion in federal public housing operating subsidies comprised 45 percent of NYCHA’s operating budget.
$14 billion
— The MTA includes $14 billion in federal funding for its 2025-2029 Capital Plan.
$280 billion is the total number of dollars held by New York City’s five pension funds over which the City Comptroller is custodian and investment adviser. The Comptroller plays a critical role in the City’s fiscal health, integrity, and accountability. In June, New Yorkers will head to the polls to…
This year, voters will choose the next New York City Comptroller, who will play a critical role holding the City Administration accountable, managing five pension funds with $280 billion in assets, and partnering in the issuance of billions of dollars of City debt. The Comptroller is important to New York City's fiscal…
New York City's budget is currently precarious, with expenses exceeding revenues and a projected $3.6 billion shortfall in the fiscal year 2026 preliminary budget. To address these fiscal risks and avoid future service cuts, the city must stop underbudgeting, implement spending controls, and increase its general reserve.
Recommendations related to City Budget
End the budget gimmickry and present accurate, reasonable estimates of expenses and revenue, as required by the City Charter, in the Fiscal Year 2026 Executive Budget.
Implement a Program to Eliminate the Gap (PEG) to reduce spending growth by streamlining administrative operations, increasing program efficiency, and scaling back or eliminating programs that deliver the least value to residents.
Not fund any new or expanded programs in the Executive Budget or during adoption.
Add at least $1.0 billion in funding to the fiscal year 2026 General Reserve to help respond to potential federal cuts.
Key Data
$3.6 billion
— The amount the fiscal year 2026 preliminary budget is short to fund existing services.
$4.0 billion
— The amount by which current services are underbudgeted annually.
$10.1 billion
— The projected budget gap for fiscal year 2028.
$595.0 million
— The net increase in state funding for the city in the fiscal year 2026 executive budget.
$1.0 billion
— The minimum amount of funding that should be added to the fiscal year 2026 General Reserve.
$636.0 million
— The amount by which expenses exceeded revenues in fiscal year 2023.
New York City's financial planning process requires reform to ensure greater transparency and fiscal responsibility, specifically through the implementation of mandatory Rainy Day Fund rules and stricter requirements for accurate budget estimates. Additionally, the City should establish a recurring, statistically representative resident feedback survey to better align government services with the needs of its population.
Recommendations related to City Budget
The Charter should require the City to conduct and publish a statistically valid resident feedback survey at least every five years, with results at the Community Board level and disaggregated by key demographic groups.
The Charter should require the City to deposit money into its Rainy Day Fund (RDF) when the economy is growing and preserve the fund for its intended purpose—to protect New Yorkers from dramatic cuts during a recession or short-term emergency.
The Charter should require detailed explanation of the causes of significant annual changes or estimation differences when tax revenues or major program expenditures are projected to change more than 10 percent in any year.
The Charter should require detailed explanation of the causes of significant annual changes or estimation differences when executive expense budget estimates vary more than 20 percent from estimates by the City or State Comptrollers.
Key Data
$3.6 billion
— The amount added to the City's current year spending through quarterly budget modifications for expenses that were predictable when the budget was adopted.
10 percent
— The threshold for projected changes in tax revenues or major program expenditures that would trigger a requirement for a detailed explanation of causes.
20 percent
— The threshold for variance between executive expense budget estimates and estimates by the City or State Comptrollers that would trigger a requirement for a detailed explanation of causes.
New York City's fiscal year 2026 preliminary budget relies on underbudgeting to close gaps on paper, leaving the plan short by nearly $4.0 billion for existing services. While reported future budget gaps range from $4.2 billion to $5.1 billion, the actual fiscal picture is significantly worse, with gaps reaching up to $9.0 billion when accounting for underbudgeting.
Recommendations related to City Budget
The Administration should break its severe underbudgeting habit and provide credible spending estimates.
New Yorkers deserve a clear picture of the City’s finances, including overtime, housing vouchers, and homeless shelters.
If the City’s leaders prioritize programs that work, shrink those that don’t, and improve the quality and efficiency of the government’s operations, New Yorkers will get what they pay for and need.
All leaders should focus on using accurate estimates and making the right choices for New Yorkers not only today but in the future.
Key Data
$4.0 billion
— Amount the fiscal year 2026 spending plan is short to fund existing services.
$8.0 billion to $9.0 billion
— The actual range of fiscal year 2027 to fiscal year 2029 budget gaps when underbudgeting is taken into account.
6.7 percent
— Growth rate of City-funded spending in fiscal year 2025, adjusted for underbudgeting and pre-payments.
5.0 percent
— Growth rate of City-funded spending in fiscal year 2026, adjusted for underbudgeting and pre-payments.
$2.5 billion
— Additional spending added to fiscal year 2025 in the middle of the year.
$700 million
— Amount fiscal year 2025 remains underbudgeted, largely for overtime.
New York City faces a $5.5 billion budget gap for the upcoming year, exacerbated by significant underbudgeting that hides the true cost of operations, including an estimated $3.6 billion in underbudgeted expenses for fiscal year 2026. To ensure long-term fiscal stability, the City must address these gaps, properly fund new initiatives like the $650 million street homelessness plan, and bolster the Rainy Day Fund, which currently holds only $2.0 billion against a potential $11 billion recessionary revenue loss.
Recommendations related to City Budget
The City should make mandatory deposits to the Revenue Stabilization Fund in fiscal year 2025, totaling $635 million based on the current OMB tax forecast or $1.7 billion based on the City Comptroller’s tax forecast.
The City should fund new initiatives announced during the State of the City, such as $650 million to address street homelessness and $163 million to serve at-risk youth, within the budget.
The City should reflect the operating costs of the City of Yes for Housing Opportunity agreement in the Preliminary Budget rather than excluding them.
The City should prepare for federal changes by proactively assessing potential risks and opportunities without taking pre-emptive actions.
The City should ensure spending is affordable in fiscal year 2026 and beyond to avoid the precarious path of unaffordable spending.
Key Data
$5.5 billion
— The reported budget gap for next year that the City must close.
$3.6 billion
— The estimated amount of underbudgeted spending in fiscal year 2026.
$1.8 billion
— The estimated additional asylum seeker savings in fiscal year 2026.
$11 billion
— The amount of revenue an average recession would sap over two years, highlighting the insufficiency of the current $2.0 billion Rainy Day Fund.
$6.3 billion
— The projected budget gap for fiscal year 2028.
$9.6 billion
— The amount of federal aid in the City's fiscal year 2025 budget, comprising 8 percent of the total.
The City of Yes for Housing Opportunity will only address one-fifth of the city's housing production needs, while the $5 billion in associated commitments threatens to exacerbate the fiscal year 2026 budget gap, which already exceeds $8 billion. To avoid further budget cuts, the city must offset this new spending with reductions elsewhere and implement strategies to increase housing production in areas excluded from the recent agreement.
Recommendations related to City Budget
The City Council and the Administration should develop and implement plans that will boost even more production all across the City and especially in neighborhoods carved out of the final City of Yes deal.
New operating budget spending must be paid for with reduced spending elsewhere or it will widen already huge budget gaps, potentially driving budget cuts.
The $5 billion in commitments secured by the City Council as part of the compromise should be reflected in January’s Preliminary Budget.
Key Data
30,000
— Potential housing units cut from the City of Yes agreement.
$5 billion
— Commitments secured by the City Council as part of the compromise.
$8 billion
— Fiscal year 2026 budget gap when underbudgeted services are taken into account.
one-fifth
— Portion of New York City’s needed additional housing production that the City of Yes will yield.
New York City's operating budget reached $113,181 million in revenue and $113,175 million in expenditures for fiscal year 2024. The city's financial landscape also includes $14,524 million in capital expenditures and a total outstanding gross funded debt of $136,218 million.
Key Data
$113,181 Million
— Total operating revenues for the City of New York in FY 2024.
$113,175 Million
— Total operating expenditures for the City of New York in FY 2024.
$136,218 Million
— Total outstanding gross funded debt for the City of New York in FY 2024.
$14,524 Million
— Total capital expenditures for the City of New York in FY 2024.
10 and 15 are the districts represented by New York Congressman Dan Goldman and Congressman Ritchie Torres. With a newly elected President and Congress, changes in federal policy, funding, and regulation will affect New York State and New York City. So, what are the opportunities and challenges ahead? Where can…
New York City's November 2024 financial plan continues to underestimate spending for ongoing programs by over $3 billion annually, leading to projected future budget gaps exceeding $8 billion. To stabilize finances and address these shortfalls, the administration must prioritize critical programs and increase efficiency while ensuring the budget remains accurate and credible.
Recommendations related to City Budget
The Administration should start taking steps now to close next year’s gap in the January Preliminary Budget.
To balance the budget and serve New Yorkers, the Administration should prioritize critical programs, increase efficiency, and shrink spending on lower-impact programs.
The City must ensure the budget is accurate and credible to allow leaders to make the right choices and stabilize the City’s finances.
Key Data
$3 billion
— Amount by which the budget continues to low-ball spending for ongoing programs annually in future years.
$8 billion
— Amount of future annual budget gaps the City will actually face, exceeding the City's reported figures.
$5.5 billion
— Amount of future annual budget gaps reported by the City, which is lower than actual projections.
$1 billion
— Amount of newly identified resources the City used to fund predictable shortfalls in the current year.
New York City faces a $9.3 billion budget gap for fiscal year 2026, and conditioning land use approvals on unrelated spending priorities threatens the city's ability to fund essential services. To avoid exacerbating fiscal instability and housing scarcity, the City Council should approve the City of Yes zoning amendment without attaching costly mandates or new spending requirements.
Recommendations related to City Budget
The City Council should pass the City of Yes as is, without conditioning approval on new spending that would widen the City’s gaping $9 billion budget gap.
The Council should not condition their approval of the City of Yes on new spending or capital projects, as this threatens the City’s ability to pay for other city services.
Budget priorities should be a negotiated part of the budget, rather than being tied to land use actions.
The Council should not scale back the scope of individual City of Yes provisions by imposing onerous affordability restrictions or wage mandates that make it financially untenable to build rental housing.
Key Data
$9 billion
— The size of the City's budget gap that could be widened by conditioning approval of the City of Yes on new spending.
$9.3 billion
— The estimated budget gap the City is facing for fiscal year 2026.
$300 million
— The amount of income and sales tax revenue lost in fiscal year 2022 due to persistently negative outmigration caused by housing affordability and availability.
$2 billion
— The potential annual tax revenue lost due to the severity of the city's housing shortage.
Supporting Question 3 will mandate the publication of Fiscal Impact Statements for legislation, thereby improving financial transparency and the quality of legislative decision-making. Conversely, the proposed changes to the capital planning process in Question 5 appear unlikely to have a material effect, resulting in no formal recommendation.
Recommendations related to City Budget
The Citizens Budget Commission recommends a “yes” vote on Question 3 because knowing the possible fiscal impacts when debating legislation should enhance the quality of deliberations and decisions.
Key Data
eight days
— The required advance notification period for the City Council to notify the Mayor’s Office of Management and Budget before a hearing.
three days
— The deadline for the Mayor’s Office of Management and Budget to provide its own estimate of a bill’s fiscal impact before a hearing.
six to four months
— The compression of the formal response and revision process involving the City Planning Commission and Borough Presidents.
New York State lawmakers are increasingly enacting pension sweeteners and rolling back Tier 6 reforms, which impose significant, unplanned costs on state and local budgets without corresponding service improvements. These legislative actions, including recent changes to vesting periods and final average salary calculations, threaten the fiscal stability of public pension systems by adding billions in liabilities.
Recommendations related to City Budget
State lawmakers should cut the sweetener habit and should stick to a healthy Tier 6 diet as enacted over a decade ago.
Legislators should kick this growing habit and leave sweeteners on the shelf.
Lawmakers should maintain the valuable Tier 6 reforms, which continue to offer generous defined benefits for public employees.
Key Data
$438 million
— First-year annual fiscal impact of enacted Tier 6 reform rollbacks.
$1.5 billion
— Annual price tag of one proposed Tier 6 rollback.
$19.8 million
— Immediate cost of 11 sweetener bills recommended for veto.
$10.3 million
— Annual cost of 11 sweetener bills recommended for veto.
$61 million
— Annual pension contribution cost increase to State and local governments from changing the minimum vesting period from 10 to 5 years.
$377 million
— Annual cost increase to State and local governments from changing the final average salary calculation from five years to three years.
The Mayor’s Management Report, intended to track city performance, currently focuses on inputs and outputs rather than outcomes, quality, and efficiency, limiting its utility as a management and budgeting tool. To improve accountability and transparency, the report should incorporate outcome-based metrics, link performance to granular expenditure data, include resident feedback, and provide clearer performance targets and geographic detail.
Recommendations related to City Budget
The City should add outcome, quality, and efficiency metrics that demonstrate how well the City is doing its work.
The City should link performance metrics to more granular expenditure data, such as the budget function analysis.
The City should incorporate a periodic, statistically valid, representative resident feedback survey that provides New Yorkers’ ratings on quality of life and government services.
The City should include more performance targets and a direction for the targets to move.
The City should utilize the DMMR to provide geographic data for select indicators.
Key Data
25 percent
— of indicators in the 2024 Preliminary Mayor’s Management Report include numerical targets.
$57 million
— spent on HRA food assistance programs in fiscal year 2023, up from $27 million in fiscal year 2022.
66.4 percent
— of restaurants were inspected in fiscal year 2024, a decline from 99.5 percent in fiscal year 2019.
3,026
— deaths from unintentional drug overdoses occurred in fiscal year 2023, rising from 2,103 in fiscal year 2021.
$1.26
— average cost per pound of food distributed in fiscal year 2023, down from $1.51 the year before.
3 is the number of current and former Comptrollers who sat down to discuss the City and State's finances, economy, population loss and more. While jobs and tourism have recovered, New York continues to face challenges with hybrid work affecting downtowns and the office market, housing affordability, future budget gaps,…
NYC Comptroller Brad Lander Comptroller Brad Lander serves as New York City’s chief financial officer, leading an office of roughly 800 public servants in their work to promote the financial health, integrity, and effectiveness of City government and secure a more thriving and sustainable future for all New Yorkers.…
The MTA's capital assets are in poor condition, requiring a massive investment to rebuild and improve the system while facing a significant funding gap. To address this, the state should limit the 2025-2029 capital program to $62.4 billion, prioritize essential repairs over expansion, and implement efficiency measures to stabilize the budget.
Recommendations related to City Budget
Adopt at most a $62.4 billion 2025-2029 Capital Program to match the MTA's commitment capacity over six years.
Focus the capital program exclusively on projects to Rebuild and Improve the system rather than expansion projects.
Unpause congestion pricing to ensure the availability of funds for the 2025-2029 Capital Program.
Ensure financing for the 2025-2029 Program is sustainable by using recurring revenue and avoiding new tax increases every five years.
Increase productivity and reduce fare evasion to provide at least $1.5 billion in needed operating budget savings.
Key Data
$106.6 billion to $115.0 billion
— The estimated five-year cost of the MTA's Rebuild and Improve projects.
$27.6 billion
— The amount of projects from prior capital plans that will remain uncommitted by the end of 2024.
$16.6 billion to $25.0 billion
— The "Rebuild and Improve Commitment Capacity Gap" for the next Capital Program.
$52.9 billion
— The amount needed to finance the 2025-2029 Capital Program and previously planned projects if sized to match commitment capacity.
$700 million
— The amount of annual revenue lost to fare evasion.
$2 billion
— The potential annual savings from increasing efficiency with labor collaboration.
The NYC Ferry system, while improved, remains heavily subsidized, with a total annual subsidy of $56.5 million and a per-ride subsidy of $8.55 that excludes significant debt service costs. These ongoing financial requirements divert resources from the Economic Development Corporation's core mission and rely on volatile revenue sources like Times Square rental payments.
Recommendations related to City Budget
The Economic Development Corporation should eliminate the lowest-ridership routes to improve financial efficiency.
Policymakers should target subsidies to those in the greatest need of affordable transit options rather than providing broad, system-wide support.
The city should increase fares for other riders to match those of comparable premium transit services, such as the $7 per trip charged for the MTA’s express bus system.
The Economic Development Corporation should continue to hold the line on service expansions absent rigorous analysis that they would be financially feasible.
Key Data
$8.55
— The official per-trip operating subsidy for the NYC Ferry in fiscal year 2023.
$56.5 million
— The total annual subsidy for the NYC Ferry system.
$12.54
— The estimated full per-ride subsidy when accounting for annual debt service on capital commitments.
$429.2 million
— The total capital committed by the City of New York for NYC Ferry boats, docks, piers, and homeports through fiscal year 2023.
$73.8 million
— The amount of retained rental payments from the 42nd Street Development Project in fiscal year 2023.
$25 million
— The deficit in the Economic Development Corporation's fiscal year 2025 adopted budget after accounting for depreciation.
New York State's school aid funding formulas, including Foundation Aid, expense-based aids, and the STAR program, fail to effectively distribute resources based on student need and local capacity. Reallocating these funds to prioritize lower-wealth districts, including New York City, would more equitably support a sound basic education across the state.
Recommendations related to City Budget
The State should quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.
The State should revise the expected local contribution to be the higher of the district’s actual contribution or the district’s fiscal capacity.
The State should update district poverty estimates and regional cost measures for a more accurate assessment of need.
The State should remove arbitrary floors and ceilings that distort the funding distribution of Foundation Aid and expense-based aid categories.
The State should eliminate the STAR program to better allocate State resources to where they are needed most.
The State should incentivize efficiency of spending on student transportation and building projects.
Key Data
$135 million
— Amount of funding shifted to the 268 districts in the four lowest wealth deciles by reallocating certain expense-based aids.
$3.3 billion
— Total annual School Tax Relief (STAR) funding that could be reallocated proportional to districts' share of Foundation Aid.
$1,805
— Statewide student transportation expenditures per student in 2022, the highest of any state.
$447 million
— Total funding for Library, Textbook, Software, and High Tax Aid in the 2024-25 school year.
$501 million
— Current STAR aid received by the 201 lowest-wealth districts (bottom 30 percent).
$942 million
— Current STAR aid received by the 203 wealthiest districts (top 30 percent).
CBC's Ana Champeny and Patrick Orecki delivered a briefing on the fiscal year 2025 budgets of New York State and New York City, including basic fiscal overviews and the risks facing the State and the City.
New York City's fiscal year 2025 budget relies on significant savings programs to avoid a $4.7 billion gap, while future years face projected deficits exceeding $9 billion due to underbudgeting and rising costs. The city's purported surplus is misleading, as it has spent down $1.1 billion of previously accumulated funds to cover current obligations.
Key Data
$4.7 Billion
— The projected budget gap for fiscal year 2025 if the Program to Eliminate the Gap (PEG) savings had not been implemented.
$9.3 Billion
— The projected budget gap for fiscal year 2026 when accounting for expected spending increases and underbudgeting.
$1.1 Billion
— The amount of previously accumulated funds spent down in fiscal year 2024 to cover current obligations.
$3.8 Billion
— The approximate annual savings generated by the Program to Eliminate the Gap (PEG) in fiscal years 2024 and 2025.
$758 Million
— The amount of underbudgeting for overtime costs in the fiscal year 2025 budget.
$1.1 Billion
— The total amount of PEG savings restored over a five-year period.
$116 billion is the total NYC adopted budget for FY 2025, including the $4 billion of FY25 bills that were prepaid. This year’s budget talks between the Mayor and City Council took several twists and turns, ending with the narrowly on-time arrival of an adopted budget. New York City Council…
The City Charter should be amended to improve fiscal transparency and management by strengthening legislative fiscal impact statements, requiring more accurate financial plan estimates, and establishing a statistically valid resident feedback survey. Additionally, the City should codify rules for the Rainy Day Fund, including a 16% target size, and cap debt service at 15% of tax revenues to ensure long-term fiscal stability.
Recommendations related to City Budget
Revise the Charter to require publication of the City Council Fiscal Impact Statement at least 72 hours prior to the initial Committee meeting for all proposed local laws receiving an initial City Council Committee hearing.
Revise the Charter to require that each financial plan include a detailed explanation for significant year-over-year variation in projected tax revenues or program expenditures.
Revise the Charter to require the City to conduct a resident survey at least once every five years, with statistically valid and representative results published at the Community Board level.
Revise the Charter to require the Mayor and City Council to enact a local law that details the City’s Rainy Day Fund deposit, withdrawal, and target size policy.
Revise the Charter to codify the current policy of keeping debt service below 15 percent of tax revenue to ensure debt service is affordable and does not crowd out other expenditure priorities.
Key Data
$100 billion
— The long-term liability for other postemployment benefits.
15%
— The proposed cap on debt service as a percentage of tax revenues.
16%
— The minimum target size for the Rainy Day Fund as a percentage of tax revenue.
72 hours
— The required timeframe for publishing the City Council Fiscal Impact Statement prior to an initial Committee meeting.
2%
— The threshold for a severe emergency, defined as a temporary emergency causing a revenue loss or expenditure increase of this amount.
5 years
— The frequency with which the City must conduct a statistically valid resident survey.
The fiscal year 2025 adopted budget increases City-funded spending by $6.1 billion, yet fails to adequately fund recurring costs or set aside reserves for economic downturns. This budget relies on prior-year funds to balance obligations and expands programs without identifying necessary long-term savings.
Recommendations related to City Budget
The City should adopt a transparent, accurate budget that fully funds planned services and identifies those that will shrink.
The City should ensure that spending added during budget adoption is offset by savings elsewhere.
The City should deposit at least $1 billion into the Rainy Day Fund over this and next year.
Key Data
$1.3 billion
— The amount by which the All Funds adopted budget is larger than the Mayor’s Executive proposal.
$6.1 billion
— The increase in City-funded spending in the fiscal year 2025 adopted budget over fiscal year 2024.
$17.8 billion
— The amount City-funded spending is slated to grow from fiscal year 2020 to fiscal year 2025.
$116.1 billion
— The total All Funds fiscal year 2025 spending, adjusted for prepayments and excluding interfund agreements.
$1.1 billion
— The amount by which fiscal year 2024 spending obligations exceeded that year’s revenues.
$2.0 billion
— The current balance of the Rainy Day Fund, which is described as insufficient to protect against recession-related cuts.
New York City's fiscal year 2025 budget agreement fails to prioritize long-term fiscal stability by neglecting to contribute to the Rainy Day Fund despite strong revenues. Furthermore, the budget relies on potentially inaccurate estimates that risk leaving the city short on funds for critical areas like overtime, class size reduction, and housing vouchers.
Recommendations related to City Budget
All programs should be budgeted at expected service levels and costs.
The City should put money into the City’s Rainy Day Fund despite strong revenues to avoid unnecessarily severe cuts during the next recession.
The Administration and City Council should become much more transparent and accurate in their budget reporting to avoid long-run fiscal risks.
The City should use stronger revenues to prioritize programs, make government more efficient, shrink lower impact activities, and save for a rainy day.
New York City's chronic housing shortage has led to significant fiscal losses, with net outmigration costing the city over $300 million in personal income and sales tax revenue in 2022 alone. To address these economic and fiscal challenges, the city must modernize zoning ordinances, reform property tax policies, and increase housing production to potentially boost annual tax revenue by $1.4 billion to $1.9 billion.
Recommendations related to City Budget
The City must build more housing to improve affordability and quality of life for all New Yorkers, bolster the tax base, and strengthen the city’s economy and competitiveness.
Boosting supply will require both State legislative action and local zoning changes, such as those in the Adams Administration’s City of Yes for Housing Opportunity proposal, that increase the capacity for development throughout the city.
By modernizing the City’s zoning ordinance to allow more housing everywhere, the City can start to chip away at a housing shortage that has been years in the making.
The State should reform environmental review laws to increase production at the scale needed to improve affordability.
The State should pass laws to encourage development in the downstate suburbs.
The State should repeal the Scaffold law, which drives up insurance costs.
The City should modernize building codes to facilitate increased housing production.
The City should reform its property tax policy to better support housing development.
Key Data
$300 million
— The conservative estimate of personal income and sales tax revenue lost by the City in 2022 due to net outmigration.
$1.4 billion to $1.9 billion
— The estimated annual boost to City tax revenue if enough housing is built to close the current supply gap.
160,000
— The number of residents New York City lost in 2022 due to net domestic outmigration.
$259 million
— The amount of personal income tax revenue lost in 2022 due to the negative outmigration of 52,600 households.
$50 million
— The amount of sales tax revenue lost in 2022 due to the outmigration of households.
$21.1 billion to $28.6 billion
— The potential increase in annual gross city product if the housing gap is closed.
New York City's fiscal year 2025 budget faces risks from increased underbudgeting, which obscures the true cost of services and artificially reduces projected gaps. To ensure long-term fiscal stability, the city should fully fund planned services, offset new spending with recurring savings, and bolster the Rainy Day Fund with at least $1 billion over the next two years.
Recommendations related to City Budget
The budget should be transparent and accurately reflect the costs of planned programs and additional expenses that are currently underbudgeted, such as overtime, to fully fund planned services and identify those that will shrink.
To ensure added spending is sustainable, it should be budgeted on a recurring basis and offset with recurring reductions from efficiencies or shrinking of lower impact or underutilized programs.
The City should deposit at least $500 million in the Rainy Day Fund in fiscal year 2024 to protect New Yorkers during a recession or a severe one-time emergency.
The City should budget to deposit at least $553 million in fiscal year 2025 into the Rainy Day Fund.
The City should deposit at least $1 Billion into the Rainy Day Fund over this and next year to protect New Yorkers during a recession or a severe one-time emergency.
Key Data
$1 Billion
— Minimum amount to be deposited into the Rainy Day Fund over the current and next fiscal year.
$500 million
— Amount the City should deposit in the Rainy Day Fund in fiscal year 2024.
$553 million
— Amount the City should budget to deposit in the Rainy Day Fund in fiscal year 2025.
$2 billion
— Current balance of the Rainy Day Fund, which is insufficient given potential recession impacts.
$11 billion
— Estimated revenue loss over two years during an average recession.
The New York City Charter should be revised to mandate specific fiscal rules, including a structured Rainy Day Fund, a formal Retiree Health Benefits Trust, and stricter requirements for fiscal impact statements on legislation. Additionally, the City should implement a comprehensive performance management system and conduct regular, statistically valid resident feedback surveys to improve government accountability and service quality.
Recommendations related to City Budget
The Charter should include clearly defined rules governing the Rainy Day Fund, including mandatory deposits, withdrawals limited to a recession or severe emergency, and a target size.
The Charter should be revised to establish the Retiree Health Benefits Trust, ensuring there is a fund to accumulate resources to pay for the City’s long-term OPEB liability.
The Charter should require fiscal impact statements be published earlier in the legislative process to give Council members and the public a reasonable estimate of the cost of a proposed policy.
The Charter’s requirement that revenue and expenditure estimates be reasonable and appropriate should be bolstered to prevent the routine understating of expenditures.
To help ensure that long-term debt is affordable, the Charter should limit debt service to 15 percent of tax revenues.
The Charter should establish a basic performance management framework—its management, planning, and reporting—to ensure accountability across all agencies.
The City Charter should require the City to conduct and publish a statistically valid resident feedback survey at least every five years.
Key Data
$100.3 billion
— The City's total OPEB liability.
4.8 percent
— The portion of the City's OPEB liability covered by the current RHBT balance.
$3.7 billion
— The annual additional deposit required to fund the normal cost of retiree health benefits.
$10 billion
— The cost of expanding FHEPS eligibility over five years as shown by the Council's own fiscal impact statement.
$730 million
— The projected savings from FHEPS bills cited by the City Council.
$2.0 billion
— The estimated overtime spending at uniformed agencies by the end of fiscal year 2024.
New York City's fiscal health depends on adopting a transparent budget that accurately reflects costs, avoids underbudgeting, and offsets new spending with recurring savings. Leaders should prioritize building the Rainy Day Fund to $12.7 billion and ensuring that budget gaps are not obscured by inaccurate projections.
Recommendations related to City Budget
The City should adopt a transparent, accurate budget that fully funds planned services and identifies those that will shrink.
To ensure new spending is sustainable, it should be budgeted on a recurring basis and offset with recurring spending reductions from efficiencies or the reduction or elimination of lower impact or underutilized programs.
The City should deposit at least $500 million in the Rainy Day Fund (RDF) in fiscal year 2024 and budget to deposit at least $553 million in fiscal year 2025.
The City should enact mandatory deposit rules to ensure the Rainy Day Fund is built up over time.
The City should build its reserves to $12.7 billion, which would cover two years of recessionary tax revenue losses and permit spending to grow 2 percent a year.
Key Data
$65 million
— Costs for Early Intervention services are $65 million short in fiscal year 2025.
$22 million
— The Department of Sanitation is $22 million short for litter basket service.
$2.2 billion
— The budget is approximately $2.2 billion short in fiscal year 2025 to continue current programs.
$2.6 billion and $2.8 billion
— The outyears are between $2.6 billion and $2.8 billion short.
$2.3 billion, $1.9 billion, and $1.6 billion
— The adopted budgets for fiscal years 2022 to 2024 increased spending by $2.3 billion, $1.9 billion, and $1.6 billion, respectively.
$2.0 billion
— The Rainy Day Fund balance is just $2.0 billion.
The NYC Fiscal Year 2025 Executive Budget proposes a 6.3 percent, or $5.2 billion, increase in City-funded spending from the previous fiscal year, contributing to a 24.2 percent growth since fiscal year 2020. This spending trajectory outpaces inflation by $4.4 billion over the five-year period, even as federal aid decreases.
Key Data
$5.2 billion
— The proposed increase in City-funded spending from fiscal year 2024 to fiscal year 2025, representing a 6.3 percent rise.
$16.9 billion
— The total growth in City-funded spending from fiscal year 2020 to fiscal year 2025, or 24.2 percent.
$4.4 billion
— The amount by which City-funded spending would outpace inflation between fiscal years 2020 and 2025.
$2.2 billion
— The amount of spending that would need to be added to correct fiscal year 2025 underbudgeting of support for planned programs.
$19.0 billion
— The increase in all-funds spending between fiscal years 2020 and 2025, representing a 19.9 percent rise.
$500 million
— The decrease in all-funds spending between fiscal years 2024 and 2025, despite a $4.9 billion decrease in federal aid.
New York City's Fiscal Year 2025 Executive Budget increases city-funded spending by 6.3 percent while relying on underbudgeted estimates for roughly $2 billion in annual services. This approach obscures the true fiscal picture, as projected budget gaps between fiscal years 2026 and 2028 range from $5.5 billion to $5.7 billion.
Recommendations related to City Budget
The Mayor and City Council should base their budget negotiations and decisions on reasonable and realistic spending and revenue estimates.
Their decisions should narrow future budget gaps and break the habit of adding more unaffordable spending.
City leaders should prioritize high-impact programs and shrink or end less effective ones.
Only real, reasonable estimates will drive smart choices on spending and service priorities.
Key Data
$5.5 billion to $5.7 billion
— The range of projected budget gaps between fiscal years 2026 and 2028.
$2 billion
— The estimated amount of services that are underbudgeted annually.
6.3 percent
— The increase in City-funded spending in the Fiscal Year 2025 Executive Budget.
$200 million
— The amount of FHEPS housing voucher costs that appear low or fall off a cliff in the budget.
The New York State budget has been released at nearly a quarter-trillion dollars, prompting discussions on the fiscal implications for the upcoming New York City budget negotiations. This analysis provides an overview of the current financial landscape and expectations for the city's ongoing budgetary process.
New York City faces significant fiscal uncertainty due to understated spending projections and overly conservative revenue estimates, which could lead to budget gaps exceeding $8 billion annually. To ensure long-term stability, the City must adopt more accurate budget estimates, prioritize essential programs, and bolster the Rainy Day Fund to prepare for potential economic downturns.
Recommendations related to City Budget
Include reasonable estimates of costs of all planned programs in the budget to ensure a clear and realistic view of the City's fiscal picture.
Provide accurate, but reasonably conservative revenue estimates to avoid the risks associated with overly optimistic or pessimistic projections.
Allocate funded vacancies to where they are most needed to provide critical services rather than relying on blunt hiring freezes.
Implement additional savings plans focused on increasing productivity and shrinking lower impact and priority programs.
Put extra funds available now into the Rainy Day Fund and commit to saving it for a recession or severe, one-time emergency.
Reduce future budget gaps by prioritizing spending to fund what is needed and proven to work.
Key Data
$3.0 billion and $3.9 billion
— The estimated range by which the fiscal year 2025 financial plan understates the cost of continuing current programs.
$8.0 billion
— The amount that future annual budget gaps could exceed, even without accounting for new mandates or asylum seeker costs.
$17.4 billion
— The potential total budget gap by fiscal year 2028 when including revenue adjustments, class size mandates, FHEPS expansion, and asylum seeker costs.
$3.1 billion
— The combined upward revision of tax and non-tax revenue estimates by the Office of Management and Budget for fiscal years 2024 and 2025.
$500 million
— The potential increase in City spending in fiscal year 2026 due to the class size reduction mandate.
$750 million
— The estimated first-year cost of the FHEPS housing voucher program expansion according to the State Comptroller.
New York City's current approach to debt limits relies on arbitrary, lump-sum increases that fail to account for long-term affordability or economic capacity. A more sustainable strategy would involve indexing debt limits to total personal income and formalizing debt service caps to ensure capital investments remain fiscally responsible.
Recommendations related to City Budget
The City and State should index the TFA Statutory limit to 2.5 percent of total personal income to ensure the City’s debt capacity grows with its underlying economic capacity.
Policymakers should formalize the City’s long-standing practice of keeping annual debt service costs below 15 percent of tax revenue to protect the operating budget and credit ratings.
The City should continuously and comprehensively improve how it makes capital investments, including prioritizing projects, reducing costs, and streamlining project delivery.
The State should amend the Constitutional debt limit to be more holistic so that it covers all City debt repaid with tax revenues.
Key Data
$18.5 billion
— The amount the City requested to increase the TFA Statutory limit.
$12 billion
— The cumulative increase in debt capacity proposed by the State Executive Budget.
$13.5 billion
— The TFA Statutory limit in fiscal year 2023.
$23.8 billion
— The projected TFA Statutory limit in fiscal year 2033 if indexed to 2.5 percent of personal income.
$96.9 billion
— The amount of outstanding debt the City held against a debt limit of $127.5 billion.
$152.2 billion
— The cost of the current City-funded capital plan over 10 years.
New Yorkers' perceptions of public safety have declined significantly since 2017, with only 37 percent rating neighborhood safety as excellent or good. The City Council and the Administration should integrate this resident feedback into management systems and policy development alongside existing performance metrics to improve service quality.
Recommendations related to City Budget
The City Council and the Administration should incorporate this type of in-depth, statistically valid feedback into management systems and policy development.
The City should complement and view this data alongside City service performance metrics and CompStat data to get a sharper picture of service quality and results.
Key Data
37%
— of New Yorkers rate public safety in their neighborhood as excellent or good, down from 50 percent in 2017.
28%
— of Hispanic respondents rate public safety as excellent or good.
28%
— of Bronx residents rate their neighborhood public safety as excellent or good.
71%
— of New Yorkers report feeling safe in parks and playgrounds during the day.
16%
— decrease in the percentage of New Yorkers feeling safe in parks and playgrounds during the day compared to 2017.
40%
— decrease in the daytime subway safety positive rating since 2017.
New Yorkers' satisfaction with city services and quality of life has declined significantly since 2017, with only 30 percent currently rating quality of life as excellent or good. The city should prioritize spending on high-impact programs, reduce overall expenditures, and provide tax relief to middle-income households to address these concerns.
Recommendations related to City Budget
The Administration should incorporate this type of standardized, statistically valid feedback into its management systems and policy development.
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.
Efforts to fix safety, housing, cleanliness, and homelessness service shortcomings should be continued and possibly intensified.
Key Data
30%
— New Yorkers who rate the quality of life as excellent or good, down from 50 percent in 2017 and 2008.
37%
— New Yorkers who rate public safety in their neighborhood as excellent or good, down from 50 percent in 2017.
24%
— New Yorkers who rate the quality of government services good or excellent, down from 44 percent in 2017.
11%
— New Yorkers who believe the government is spending tax dollars wisely, down from 21 percent in 2017.
6,600
— Adults across every borough who provided their opinions for the survey.
The New York City Housing Authority faces a persistent operating budget gap driven by rising expenses and weak rent collections, with nearly half of households behind on rent as of October 2023. To address these financial challenges and massive capital needs, the agency must modernize management, improve rent collection, and leverage programs like PACT to rehabilitate deteriorating buildings.
Recommendations related to City Budget
Fix or replace deteriorating buildings with PACT and the Preservation Trust.
Improve management effectiveness and efficiency, and publicly track progress and impact.
Negotiate savings, boost productivity, and modernize property management through collective bargaining.
Overhaul the rent collection process.
Key Data
$791 million
— The gap between public housing expenses and core operating income in 2023.
46.5 percent
— The share of households behind on their rent in October 2023.
$1,510
— The monthly operating expense per unit.
$1.5 billion
— Total personnel costs in 2023.
$60 billion
— The total five-year capital needs for NYCHA.
$511 million
— The amount of federal capital funds diverted in 2022 and 2023 to fill the operating budget gap.
$39.5 billion is spent by NYC annually to educate our students. The New York City Public Schools has an enormous and challenging task: educate and develop 900,000 students from a wide diversity of backgrounds and needs. Are we getting the return we need on our dollars? How are our students…
New York City's fiscal health faces significant risks due to chronic underbudgeting and the reliance on temporary funding for recurring programs, creating a projected budget gap of up to $9.7 billion. To ensure long-term stability, the city must prioritize transparency by fully funding current services and programs before considering any new expansions.
Recommendations related to City Budget
The City Council must ensure that proposals to add or modify spending are affordable and do not make the City budget even more fiscally precarious.
The City must fully fund the programs it plans to deliver to ensure the spending plan accurately reflects the program plan.
Funding required to support the current level of City FHEPS vouchers should be in the budget before adding or expanding this or other programs.
City leaders should make the hard and wise choices needed to prioritize key, high-impact programs and increase government efficiency.
The City must ensure the budget is transparent and completely and accurately funds the City’s current programs and the full cost of desired program expansions.
Key Data
$3.6 billion
— The amount by which proposed spending in fiscal year 2025 is short to continue the current level of services.
$8.8 billion to $9.7 billion
— The projected future budget gaps, even without expanding City FHEPS or complying with the State class size reduction law.
$2 billion
— The amount currently set aside in the Rainy Day Fund, which is considered insufficient for the next economic contraction.
$10.2 billion
— The total resources found across fiscal years 2024 and 2025 through higher revenue, in-year reserves, and spending reductions.
$1.45 billion
— The amount of in-year budgetary reserves, which is far exceeded by the $3.6 billion in underfunded ongoing programs.
$800 million
— The total amount of underbudgeting identified in the fiscal year 2025 preliminary budget.
The Fiscal Year 2025 Preliminary Budget proposes increasing city-funded spending by $2.3 billion, despite the city facing significant fiscal cliffs and underbudgeted ongoing costs that create annual budget gaps of up to $9.7 billion through 2028. To stabilize the city's finances, officials must prioritize transparency by clearly identifying which programs are funded and which will be reduced or eliminated, rather than canceling planned savings measures.
Recommendations related to City Budget
The City should reverse the decision to cancel the April 2024 PEG to slow spending growth and close budget gaps.
The City should increase budget transparency by showing the full costs of programs and identifying which will be shrunk or eliminated.
The City should prioritize programs and increase efficiency to address the precarious fiscal condition.
Mayor Eric Adams and the City Council should take action to put the City on solid fiscal footing before the fiscal year 2025 budget adoption.
Key Data
$2.3 billion
— Proposed increase in City-funded spending in the Fiscal Year 2025 Preliminary Budget.
$9.7 billion
— Projected out-year budget gap for fiscal year 2028.
$11.2 billion
— Increase in City-funded spending between fiscal years 2021 and 2023.
$3.6 billion
— Shortfall in the preliminary budget for fiscal year 2025 to continue existing programs and services.
$19.7 billion
— Increase in City-funded spending between 2012 and 2019.
$1.2 billion
— Increase in migrant and asylum seeker costs, accounting for just over half of the total spending increase.
New York City's fiscal year 2025 preliminary budget faces a $3.6 billion funding shortfall, driven by underbudgeted programs and fiscal cliffs that threaten long-term stability. To address these gaps, the city must improve transparency by fully funding planned services or explicitly identifying programs to be reduced or eliminated.
Recommendations related to City Budget
The City should implement an additional PEG in the Executive Budget and shrink or eliminate programs that the available resources cannot fully support.
To be fully transparent, the budget should include funding for all planned programs and acknowledge that under- and un-funded programs will shrink or end.
The City Council should ensure that its proposals for added or modified spending are affordable based on fully funding or reducing the current set of planned programs.
The Administration should continue with its original plan to implement a PEG in the Fiscal Year 2025 Executive Budget.
The City should prioritize and fund effective and impactful programs, shrink or eliminate less critical and effective programs, and increase efficiency.
Key Data
$3.6 billion
— The amount of funding needed to fully fund current and planned service levels in the fiscal year 2025 budget.
$8.8 billion to $9.7 billion
— The estimated budget gaps for fiscal years 2026 through 2028 if current service levels and plans are fully funded.
$2.5 billion
— The amount added to the fiscal year 2024 budget to fund fiscal cliff programs and underbudgeted expenses.
$2.2 billion
— The total City-funds fiscal cliff amount, which includes funding for programs like CityFHEPS and homeless shelters.
$675 million
— The federal-funds fiscal cliff amount, which is primarily for Department of Education programs.
$800 million
— The amount attributed to chronic underbudgeting, including uniformed overtime and mandated MTA subsidies.
New York City and State face significant fiscal challenges due to years of unsustainable spending growth and structural budget gaps that are masked by temporary revenue sources. To avoid a looming fiscal reckoning, governments must align recurring expenditures with revenues, prioritize effective programs, and improve operational efficiency rather than increasing taxes or depleting reserves.
Recommendations related to City Budget
Both the City and State must align recurring expenditures for all programs with revenues.
Leaders should ignore calls to increase taxes and deplete reserves.
Smart spending restraint should focus on prioritizing the programs that produce the most significant effects, and shrinking or eliminating those that are ineffective or deliver less benefit.
Leaders, managers, and front-line workers should work together to ensure uniformed employees are deployed effectively and not filling jobs that could be done by civilian employees.
The State needs to focus on better targeting aid to high-need districts, not increasing aid to wealthy districts that already self-fund a sound basic education.
Key Data
$233 billion
— The State’s total budget for fiscal year 2025.
$33 billion
— The increase in State Operating Funds spending between fiscal years 2020 and 2025.
$9.9 billion
— The State gap in FY 2028 on paper.
$15 billion
— The structural gap in FY 2028 when accounting for non-recurring revenue.
$11.5 billion
— The increase in City-funded spending between FY 2020 and FY 2025.
$3.6 billion
— The additional fiscal year 2025 expenses to serve migrants.
New York City's fiscal year 2025 preliminary budget faces significant challenges, with future gaps estimated between $5 and $6 billion and a 21.5% increase in spending since 2020. To ensure long-term stability, the city must transparently account for all program costs, address recurring fiscal cliffs, and prioritize spending efficiency.
Recommendations related to City Budget
The City should transparently budget for the projected costs of all programs, or explicitly shrink or sunset them.
The City should detail the sources of savings on asylum seekers and migrants and the underlying projections, so that New Yorkers understand what services are being provided, for how long, and to how many households.
The City should align recurring expenditures for all programs and close outyear gaps, including the fiscal cliffs.
The City should further restrain spending by prioritizing programs and increasing efficiency.
Key Data
$5 to $6 billion
— Future budget gaps that understate the magnitude of the City’s remaining fiscal problem.
$2.5 billion
— Mid-year addition in fiscal year 2024 spending resulting from fiscal cliffs and underbudgeting.
$800 million
— Cost of the current (non-expanded) FHEPS housing voucher program in the current year.
21.5 percent
— Increase in adjusted fiscal year 2025 City-funded spending compared to fiscal year 2020.
$1.2 billion
— January round of agency PEG savings in fiscal years 2024 and 2025.
$3.5 billion
— Net savings of the November PEG, after restorations.
The November 2023 Program to Eliminate the Gap (PEG) aims to reduce City-funded spending, with 80 percent of savings derived from non-service-reducing measures such as re-estimates, funding shifts, and vacancy reductions. Although agencies were directed to identify 5 percent savings, the actual impact is closer to 2.2 percent of total City-funded spending due to significant exclusions, including central costs and migrant services.
Recommendations related to City Budget
City agencies should use a data driven approach to identify less- or in-effective programs and inefficient processes that can be shrunk or streamlined to reduce costs.
Agency leadership should collaborate with line staff to determine how programs and services can be delivered more efficiently.
Efforts to identify efficiencies should be continued and strengthened.
Returning to standardized procurement practices wherever possible should increase competition and drive down the cost of providing services.
Savings on benefits are possible over the long term and should be a component of efforts to stabilize City finances.
Key Data
$10.8 billion
— Spending in fiscal years 2024 and 2025 on housing and services for migrants and asylum seekers.
2,407
— Full-time positions eliminated in fiscal year 2025 through vacancy reduction and hiring freeze initiatives.
$360 million
— Amount of annually recurring efficiency savings identified by agencies in the November 2023 PEG.
$42 million
— Additional revenue in fiscal year 2024 from increased speed camera enforcement.
$1.4 billion
— Total value of contracts awarded using emergency procurement methods after the July 30, 2022 emergency declaration.
58 percent
— Share of fiscal year 2025 City-funded spending that was not subject to the PEG.
New York City faces a projected budget gap of $7.1 billion for fiscal year 2025, which could rise to $10.6 billion when accounting for fiscal cliffs and underbudgeted programs. To address these shortfalls, city leaders must prioritize cost-effective services, protect reserves for actual recessions, and avoid raising taxes on an already heavily burdened population.
Recommendations related to City Budget
New York City’s leaders should make some tough choices to close the fast-approaching budget gaps that come from years of adding spending without underlying revenues and the massive, unexpected costs of migrants — and not take the easy but unwise route of raising taxes.
New York City should protect reserves for when we’re faced with a recession, not to avoid solving a problem partly the result of the choice to add unaffordable spending and underbudget ongoing programs.
To confront budget challenges, the city must prioritize key services, relentlessly manage them to get results, and operate effectively and efficiently.
The city should work with labor to implement agreed-upon changes to work rules, job titles, health insurance and other benefit structures to deliver services efficiently.
Key Data
$7.1 billion
— The projected New York City budget gap for fiscal year 2025 shown in the financial plan.
$10.6 billion
— The possible fiscal year 2025 budget gap when adding the effects of fiscal cliffs and other regularly underbudgeted areas.
$5.8 billion
— The State Comptroller's estimated budget gap for New York City in fiscal year 2025.
$12.2 billion
— The State Comptroller's estimated budget gap for New York City by fiscal year 2027.
92%
— The share of savings measures from the previous four savings programs that would not directly affect program services.
20%
— The share of savings in the most recent Program to Eliminate the Gap (PEG) that will touch current services.
$10.6 billion is the real-world, all-in budget gap that NYC could be facing once you include all spending that is currently unbudgeted or underbudgeted. In a co-production with Ben Max's podcast "Max Politics," CBC President Andrew Rein and Vice President for Research Ana Champeny about the City's decisions and unforeseen…
New York City faces a precarious fiscal outlook with a projected budget gap of $10.6 billion, driven by the costs of serving migrants, the expiration of temporary federal aid, and recent collective bargaining agreements. To address this shortfall, the city must prioritize essential services and improve operational efficiency rather than raising taxes or depleting financial reserves.
Recommendations related to City Budget
The City should prioritize key services and increase efficiency rather than focusing on expanding services, as it is not the time to focus on expanding services.
Labor must be part of the solution, specifically through agreed-upon changes to work rules, job titles, health insurance, and other benefit administration structures.
The City should avoid raising taxes, which would weaken New York City’s competitiveness.
The City should avoid dipping into reserves, which would weaken the City’s ability to withstand any future recession.
The Council should focus on the data to help make the hard choices and minimize the impact on New Yorkers.
Key Data
$10.6 billion
— The more accurate budget gap for fiscal year 2025 when including fiscal cliffs and regularly underbudgeted areas.
$7.1 billion
— The budget gap for fiscal year 2025 as shown in the City's financial plan.
$16 billion
— The added costs through 2027 resulting from recent collective bargaining agreements.
92 percent
— The portion of savings measures from previous programs that did not directly affect program services.
20 percent
— The portion of savings in the most recent program to eliminate the gap (PEG) that will affect current programs.
New York City faces a $10.6 billion budget gap for fiscal year 2025, driven by the rising costs of serving asylum seekers and migrants alongside pre-existing spending imbalances. To address this, the City must prioritize efficiency, including labor reforms and cost-sharing with state and federal partners, to protect essential services while managing fiscal constraints.
Recommendations related to City Budget
The City needs to conduct a citywide look at program impact and efficiency to identify all opportunities to reduce costs without cutting critical services.
The City should consolidate welfare benefit funds, which could save $150 million without cutting actual benefits.
The City should work with labor to make changes to work rules and job titles, with a focus on maintaining high-quality critical services while reducing costs.
The federal government should share a fair portion of the costs associated with serving asylum seekers and migrants.
The City should efficiently provide only the most critical services to reduce the high costs associated with asylum seekers and migrants.
Key Data
$7.1 billion
— The widened fiscal year 2025 budget gap, up from the previously estimated $5.1 billion.
$10.6 billion
— The total fiscal year 2025 budget gap when including the fiscal cliff and program underbudgeting.
$150 million
— Potential savings from consolidating welfare benefit funds without cutting actual benefits.
$10 billion
— The amount the City increased projected spending on asylum seekers and migrants over four years.
90%
— The portion of asylum seeker and migrant costs currently coming from City coffers.
New York City faces substantial budget gaps, reaching $11.3 billion for fiscal year 2025, driven by asylum seeker costs, fiscal cliffs, and underbudgeting. Achieving structural stability requires prioritizing effective services, increasing government efficiency, and making difficult decisions about which programs to scale back or eliminate.
Recommendations related to City Budget
The City should prioritize effective programs and shift other funds to support them, while eliminating or scaling back those that are less impactful.
Achieving structural stability will require prioritization—hard choices about which services to continue and which to end or scale back.
Achieving structural stability will require an increase in government efficiency and a focus on getting the basics right.
Key Data
$11.3 billion
— The projected fiscal year 2025 budget gap the City must close.
$839 million
— The potential shortfall in fiscal year 2024 to fund planned services.
$4.7 billion
— The updated fiscal year 2024 spending projection for asylum seeker and migrant costs.
$1.7 billion
— The amount of annual savings expected from the Program to Eliminate the Gap (PEG).
$433 million
— The estimated cost of complying with the class size reduction mandate in fiscal year 2026.
$1.3 billion
— The estimated annual cost of complying with the class size reduction mandate when fully phased in.
New York City faces a potential fiscal year 2025 budget gap of $13.8 billion, with services for migrants accounting for $6.1 billion of that total. To address these financial challenges, the administration is implementing 5 percent budget savings directives across agencies while needing to restructure operations to curb spending that has historically outpaced previous savings efforts.
Recommendations related to City Budget
Mayor Eric Adams is right to direct agencies to propose 5 percent budget savings—PEGs—for the November plan and to prepare for two more 5 percent rounds in January and April.
The federal government should provide much more fiscal aid to help NYC bear the cost of serving new migrants and asylum seekers.
The State’s recently increased commitment to the migrant crisis is welcome, but should be bigger.
The Mayor is right to direct agencies to reduce the costs of shelter and services, which appear extraordinarily high.
Restructuring operations to significantly reduce costs would be critical now even without the migrant crisis.
Key Data
$13 billion
— Estimate of the fiscal year 2025 budget gap if the City's asylum seeker cost estimate proves accurate.
$13.8 billion
— Total potential fiscal year 2025 budget gap.
$6.1 billion
— Estimated cost of services to migrants next year.
3 to 1
— Ratio by which the Administration's previous savings programs were overmatched by additional spending for new and expanded programs, collective bargaining, and pensions.
New York City's fiscal year 2024 budget is actually $112.6 billion when accounting for prepaid obligations, and spending has increased by $20 billion since 2019, contradicting claims of an austerity budget. Furthermore, the city faces significant future budget gaps reaching $11.5 billion by 2027, while staffing shortages are driven by management and procedural challenges rather than budgetary constraints.
Recommendations related to City Budget
The City should flexibly allocate vacant positions where they are needed to address staffing shortages.
The City should speed up review and approval processes to hire more expeditiously.
The City should increase flexibility of work rules, job titles, and schedules to improve staffing.
The City should modernize and better manage civil service regulations to overcome hiring challenges.
The City should identify other ways to better compete with the private sector for talent to fill vacant positions.
Key Data
$112.6 billion
— The total adopted budget for New York City in fiscal year 2024, including prepaid obligations.
26,000
— The number of vacant positions currently budgeted in the City's fiscal year 2024 plan.
$2.6 billion
— The average amount of cumulative recurring savings from the Programs to Eliminate the Gap (PEG).
10 percent
— The portion of the $2.6 billion in recurring annual savings that may directly affect program services.
$20 billion
— The total increase in the City budget over the five years between fiscal years 2019 and 2024.
$11.5 billion
— The projected budget gap for fiscal year 2027 once fiscal cliffs and underbudgeted programs are included.
CBC's Ana Champeny and Patrick Orecki delivered a briefing on the New York State Fiscal Year 2024 Enacted Budget and the New York City Fiscal Year 2024 Adopted Budget. They provided basic fiscal overviews and discuss the risks facing the City and State.
New York State Budget Fiscal Year 2024 Major Actions and Fiscal Risks As of First Quarter Update New York City Fiscal Year 2024 Adopted Budget and Outlook
New York State and its localities spent $10.7 billion on economic development in 2022, a figure projected to rise to $13 billion by 2025 despite insufficient evidence that these programs effectively create jobs. To protect the state's finances amid significant budget gaps, officials should implement rigorous evaluations, adopt performance-based incentives, and establish a unified economic development budget.
Recommendations related to City Budget
Rigorously evaluate existing incentives and programs to determine their effectiveness.
Narrow, shrink, or eliminate programs that are not proven effective.
The fiscal year 2024 budget agreement relies on $2.3 billion in available resources to increase spending without implementing the necessary savings to sustain these costs long-term. This approach delays critical fiscal decisions, widens future budget gaps, and creates dangerous fiscal cliffs by funding major programs on a year-to-year basis.
Recommendations related to City Budget
The City should prioritize programs, reduce spending on those with lower impact, and restructure operations to increase productivity.
The City should not wait until it slams into a fiscal wall to spend within its means.
The Administration, City Council, and the municipal unions should collaborate and ensure the City can deliver to New Yorkers what they need at a cost the City can afford.
Key Data
$2.3 billion
— Available resources used in the fiscal year 2024 budget to add spending without offsetting savings.
New York City faces growing budget gaps projected to rise from $7.5 billion in fiscal year 2025 to $10.7 billion by fiscal year 2027. To stabilize the city's fiscal outlook, the budget must include realistic spending estimates, offset recurring costs with savings, and prioritize depositing additional resources into the Rainy Day Fund.
Recommendations related to City Budget
The City should adopt a budget that narrows future budget gaps.
The City should adopt a budget that reduces future fiscal cliffs by including spending for ongoing programs in the outyears.
The City should adopt a budget that offsets all added spending for recurring activities with savings elsewhere in each year of the financial plan.
The City should adopt a budget that includes realistic annual spending estimates for all functions, including uniformed overtime and special education.
The City should adopt a budget that deposits at least half of any additional fiscal year 2023 resources into the Rainy Day Fund.
Key Data
$7.5 billion
— Projected budget gap for fiscal year 2025.
$10.7 billion
— Projected budget gap for fiscal year 2027.
$400 million
— Cost to maintain the current FHEPS rental voucher program.
$4.3 billion is the Adams' Administration's estimate of the cost to house and provide services to asylum seekers this and next year. But that is only a small portion of the City's fiscal challenges. NYC Budget Director Jacques Jiha joined the CBC to discuss the fiscal year 2024 Executive Budget,…
NYC Budget Director Jacques Jiha briefed CBC Trustees on the New York City Fiscal Year 2024 Executive Budget. Director Jiha was appointed to serve as Budget Director in October 2020. He oversees New York City’s fiscal policy, including the development of the Expense and Capital Budgets, the City’s bond finance…
The New York City Fiscal Year 2024 Executive Budget includes savings initiatives totaling $4.1 billion in recurring annual savings, yet the city faces widening budget gaps projected to reach $11 billion by fiscal year 2027. To address these gaps while preserving services, the city should prioritize efficiency improvements and shift existing vacancies to critical functions rather than adding new positions.
Recommendations related to City Budget
Future actions should focus much more on prioritizing impactful programs and restructuring operations to preserve services.
The City should shift vacancies to where they are most needed rather than adding new positions.
The City should take steps to aggressively reform how it hires, especially for critical functions.
The City should implement additional PEGs that focus on improving efficiency—reducing costs without reducing services.
The City should prioritize efficiency savings in the adopted budget and in future financial plans.
Key Data
$4.1 billion
— Total cumulative recurring savings from the four PEG and vacancy reduction plans.
23,000
— Number of full-time positions that remain vacant as of January 2023.
$1.1 billion
— Average annual savings from the Fiscal Year 2024 Executive Budget PEG from fiscal year 2024 onwards.
$11 billion
— Projected budget gap by fiscal year 2027.
1,274
— Number of new full-time positions added in the fiscal year 2024 Executive Budget.
New York City's fiscal year 2024 budget relies on unsustainable spending patterns, with projected budget gaps reaching $10.7 billion by fiscal year 2027. To avoid service cuts or tax increases, the administration must implement additional savings plans focused on productivity and prioritizing high-impact programs.
Recommendations related to City Budget
The City must implement additional PEGs focused on productivity and prioritization of higher impact programs to put the budget on a fiscally sustainable path.
The City must avoid a path that leads to slashing services or raising taxes, which would drive away residents and businesses.
Key Data
$107.6 billion
— Proposed spending in All funds for the New York City Fiscal Year 2024 Executive Budget.
$7.5 billion
— Projected budget gap for fiscal year 2025.
$9.7 billion
— Projected budget gap for fiscal year 2026.
$10.7 billion
— Projected budget gap for fiscal year 2027.
$3.0 billion
— Estimated shortfall in the balanced-on-paper fiscal year 2024 budget due to fiscal cliffs and underbudgeting.
$600.0 million
— Amount of federal aid for asylum seekers assumed in the fiscal year 2024 budget.
The New York City Housing Authority faces a widening structural budget gap, driven by rising operating costs and declining rent collections, which threatens its financial stability and necessitates increased reliance on city subsidies. To achieve solvency, the authority must implement structural reforms, including comprehensive building renovations, improved management efficiency, collective bargaining savings, and an overhauled rent collection process.
Recommendations related to City Budget
Fix or replace deteriorating buildings with Permanent Affordability Commitment Together (PACT) and the Preservation Trust.
Improve management effectiveness and efficiency, and publicly track progress and impacts.
Negotiate savings and increase productivity through collective bargaining.
Overhaul the rent collection process.
Key Data
$789 million
— The structural budget gap in 2022 between NYCHA's operating revenue and its public housing operating expenses.
$2.9 billion
— The total amount spent by NYCHA in 2022 to operate its public housing portfolio.
$1,481
— The monthly per-unit operating cost for NYCHA in 2022, which is double the average rent stabilized unit cost.
$152 million
— The total overtime spending by NYCHA in 2022, which increased 3 percent despite efforts to reduce it.
$466 million
— The total amount of unpaid rent accrued by NYCHA households as of December 2022.
$11 billion
— The approximate size of the City's budget gaps that are expected to emerge in just a few years.
The New York City Fiscal Year 2024 Executive Budget for the NYPD is understated by approximately $1.6 billion, as it fails to account for the recently ratified collective bargaining agreement and likely underbudgets overtime costs. While the budget includes a Program to Eliminate the Gap to identify savings, the department's reliance on unrealistic overtime projections and omitted labor costs obscures the true financial requirements for the upcoming fiscal year.
Recommendations related to City Budget
Budgeted overtime should reflect reasonable expectations given management, policy, and history.
The City should include the costs of the recently ratified collective bargaining agreement in the NYPD budget to ensure accurate financial planning.
The City should avoid relying on illusory savings when calculating the Program to Eliminate the Gap to ensure genuine fiscal responsibility.
Key Data
$1.6 billion
— The amount by which the NYPD's fiscal year 2024 budget is likely understated due to omitted labor costs and underbudgeted overtime.
$817 million
— The projected total overtime spending for the NYPD in fiscal year 2023.
$900 million
— The estimated cost of the PBA collective bargaining agreement in fiscal year 2024, including wages, fringe benefits, and pension contributions.
3.7 percent
— The NYPD's Program to Eliminate the Gap (PEG) as a percentage of City-funded spending, which is slightly below the City's 4 percent target.
$110 million
— The net reduction in previously planned fiscal year 2024 spending resulting from the agency's operating budget PEG savings.
New York City faces a challenging fiscal outlook with widening budget gaps that reach $7.0 billion by fiscal year 2027 and even larger shortfalls when accounting for underbudgeted programs and fiscal cliffs. To address these risks, the City must prioritize essential services, improve operational efficiency, and avoid adding new positions while thousands of vacancies remain unfilled.
Recommendations related to City Budget
The City should immediately start to prioritize essential programs, increase its operational efficiency, speed up critical hiring, and shrink lower impact programs.
The City should be shifting existing vacancies to where they are needed, not adding new positions.
The City should direct higher revenue to the Rainy Day Fund to prepare further for very real downside risks.
The City should make every effort it can immediately and include additional savings in the Adopted Budget.
The City's leaders should not pretend the City can have and do it all.
Key Data
$4.2 billion
— The projected budget gap in fiscal year 2025.
$7.0 billion
— The projected budget gap in fiscal year 2027.
$6.8 billion
— The projected future shortfall in fiscal year 2025 when including underbudgeted programs and fiscal cliffs.
$10.0 billion
— The projected future shortfall in fiscal year 2027 when including underbudgeted programs and fiscal cliffs.
23,000
— The number of existing vacancies in the City government.
$1.0 billion
— The amount of existing City-funded programs not funded in the fiscal year 2024 budget.
The New York City Department of Buildings has seen its budget and responsibilities grow significantly, yet it continues to struggle with high vacancy rates and deteriorating performance metrics like increased plan review times and fewer job audits. Despite a 45 percent increase in staff headcount since 2014, the agency faces ongoing challenges in hiring and maintaining efficient operations as it prepares for new environmental compliance mandates.
Recommendations related to City Budget
The Department of Buildings must prioritize improving hiring to address vacancy rates, especially as the first year of compliance with Local Law 97 nears.
The agency should increase the audit rate for professionally certified jobs to ensure buildings are compliant with relevant codes and to protect workers and residents.
The Department of Buildings should address the deteriorating performance metrics, specifically the increased wait times for plan reviews and the decline in construction inspections.
Key Data
$322.1 million
— Total projected spending on the Department of Buildings in fiscal year 2023.
18%
— The current vacancy rate for authorized full-time positions at the Department of Buildings.
2%
— The percentage of professionally certified jobs audited by the Department of Buildings in fiscal year 2022.
45%
— The growth in on-board total headcount at the Department of Buildings from fiscal year 2014 to fiscal year 2022.
8.5 days
— The average wait time for new building plan reviews in borough offices during fiscal year 2022.
New York City faces massive projected budget gaps of $9.7 billion in fiscal year 2025 and $14.5 billion in fiscal year 2027, driven in part by $17 billion in employee raises over five years. To address these shortfalls, the city must focus on restructuring operations, increasing productivity, and streamlining bureaucracy rather than raising taxes or relying on optimistic revenue forecasts.
Recommendations related to City Budget
The city must thoughtfully rein in its spending by restructuring and prioritizing high-impact services, rather than slashing programs or pruning low-hanging fruit.
The city should reduce costs of centralized services, such as space for fewer employees, and focus on reorganizing operations, streamlining bureaucracy, and leveraging technology to achieve savings.
The city should implement overtime caps, ambulance staffing changes, and other measures to achieve additional savings across government.
The city should avoid raising taxes, as doing so would be the wrong direction for New York.
The city should consolidate welfare-benefit funds to save $150 million from efficiency and purchasing power.
Key Data
$17 billion
— Amount of spending added over five years due to employee raises agreed to by the city and union leadership.
$9.7 billion
— Projected budget gap in fiscal year 2025.
$14.5 billion
— Projected budget gap in fiscal year 2027.
$100 million
— Annual savings possible from increasing sanitation productivity.
$150 million
— Estimated savings from consolidating welfare-benefit funds.
5.5%
— Increase in city-funded spending next year compared to last year, despite proposed savings.
3 is the number of letters in Mayor Adams' favorite mantra: G.S.D., Get Stuff Done. They Mayor has introduced many plans: Rebuild, Renew, Reinvent; Care, Community, Action; City of Yes; and Housing our Neighbors, to name a few. But the impact is in the implementation. Joining the podcast is First…
New York City faces growing budget gaps that could reach $6.5 billion by fiscal year 2027, with total needs potentially exceeding $14.0 billion when accounting for additional costs like asylum seeker services and labor contracts. To address these shortfalls, the city is implementing a 4 percent Program to Eliminate the Gap (PEG) that aims to preserve services by leveraging over 23,000 existing vacancies rather than resorting to layoffs.
Recommendations related to City Budget
The City should improve operational efficiency to preserve services and increase long-run fiscal stability.
Agencies should utilize the 23,000 existing vacancies to meet savings targets without resorting to layoffs.
The City should make work rules and job titles more flexible to increase operating efficiency and reduce ongoing costs.
Key Data
$6.5 billion
— The projected budget gap by fiscal year 2027, excluding costs like labor contracts and asylum seeker services.
$14.0 billion
— The potential size of future budget gaps by fiscal year 2027.
$8.8 billion
— The amount the City may need to fund this year and next.
23,000
— The number of citywide vacancies available to help meet savings targets.
4 percent
— The size of the Program to Eliminate the Gap (PEG) initiated for the Executive Budget.
A CBC Event First Deputy Mayor Sheena Wright joined CBC to talk about the Administration's Get Stuff Done management approach, the City and State budgets, how the Mayor and Governor align on housing, and much more.
New York City faces a projected $12.0 billion budget gap in fiscal year 2026, driven in part by rising education spending despite a loss of over 141,000 students in K-12 public schools since 2015. To address this, the city must evaluate programs funded by expiring federal pandemic aid and shift its focus to per-student spending levels rather than aggregate funding.
Recommendations related to City Budget
The City should consider spending levels per student rather than aggregate level and recognize that declining enrollment could yield flat or reduced total spending.
The City should identify priority programs funded by expiring federal COVID-19 pandemic aid and be transparent about whether the City plans to replace the one-time federal funds with recurring City and State resources or shrink or end the programs.
The City should evaluate DOE programs and initiatives to ensure that they are delivering maximum impact to the target populations and modify programs accordingly.
The City should be clear whether the federally funded programs will end once the federal COVID-19 pandemic aid runs out, or whether funds from other programs and services will be redistributed to maintain these programs.
Key Data
$12.0 Billion
— Likely City budget gap in fiscal year 2026 including unbudgeted collective bargaining costs, funding the fiscal cliff, and other underbudgeted programs.
35%
— Percentage of the City's total budget represented by spending on the Department of Education.
$500 Million
— Minimum amount the City consistently underbudgets annually for Carter Cases, pupil transportation, and charter schools.
$321 Million
— Estimated fiscal cliff in fiscal year 2025 due to expiring federal COVID-19 pandemic aid.
$556 Million
— Estimated fiscal cliff in fiscal year 2026 due to expiring federal COVID-19 pandemic aid.
141,000
— Number of students lost by K-12 Department of Education schools between school years 2015-16 and 2021-22.
The New York City Housing Authority faces a structural budget gap driven by rising operating costs, deferred maintenance, and a record-low rent collection rate of 64 percent. To achieve solvency, the agency must implement structural reforms rather than relying on unsustainable non-recurring revenue sources and city subsidies.
Recommendations related to City Budget
NYCHA must fix deteriorating buildings through the Rental Assistance Demonstration (RAD) program and the Preservation Trust.
The agency needs to improve property management to address inefficiencies.
NYCHA must boost rent collections to ensure adequate revenue.
The authority should negotiate savings and increased productivity through collective bargaining.
NYCHA should appropriately enforce tenant obligations to pay rent.
Key Data
64 percent
— The rent collection rate for NYCHA fell to an all-time low in December 2022.
$454 million
— The total amount of unpaid rent accrued by NYCHA households as of December 2022.
$789 million
— The amount of non-operating sources used to balance the 2022 budget, representing 28 percent of the total revenue budget.
$152 million
— The total overtime spending by NYCHA in 2022, which increased by 3 percent despite reduction goals.
$1,500
— The average cost to operate NYCHA's public housing per unit per month.
$211 million
— The amount remaining in NYCHA reserves at the end of 2022, representing less than one month of expenses.
New York City's economic development tax incentives, which cost the city $44 million annually in foregone revenue, should not be extended without rigorous evaluation of their effectiveness and efficiency. Any future extensions or expansions of these programs must be justified by prospective models demonstrating they are needed to meet current and future goals.
Recommendations related to City Budget
The State should reject the proposed extension of certain NYC economic development tax breaks absent appropriate analysis.
Any extension or expansion of an existing tax expenditure should be supported by a prospective model of its impacts.
Extensions should be justified by an evaluation that determines whether the tax expenditure achieved its purpose, was needed to induce behavior that would not have occurred otherwise, or subsidized activity that would normally occur.
For programs like the Commercial Revitalization Program and Commercial Expansion Program, existing evaluations should inform the Legislature’s decision of whether to extend, amend, or sunset these programs.
Key Data
$44 million
— Annual cost to New York City in foregone revenue from the package of economic development tax incentives.
$14 million
— Annual foregone revenue from property taxes due to these tax incentive programs.
$15 million
— Annual foregone revenue from utility taxes due to these tax incentive programs.
$7 million
— Annual foregone revenue from commercial rent taxes due to these tax incentive programs.
$8 million
— Annual foregone revenue from sales taxes due to these tax incentive programs.
The tentative New York City–District Council 37 contract agreement is expected to cost approximately $16.2 billion more than currently budgeted over the contract period, significantly widening projected city budget gaps. To manage these costs, the city must identify productivity savings and implement a multiyear Program to Eliminate the Gap in the executive budget.
Recommendations related to City Budget
The effort to increase flexibility should be significantly expanded to identify changes in work rules and job titles that increase the efficiency of City operations, providing needed savings to offset the costs of raises, while increasing salaries and improving career paths.
The City should be implementing a growing, multiyear Program to Eliminate the Gap (PEG) in the Executive Budget to offset these multi-billion-dollar collective bargaining costs.
As the City negotiates other agreements and works to identify how best to adapt to remote work and flexible schedules, it should take great caution not to add economic costs to other contracts if remote work options vary.
Key Data
$16.2 billion
— Additional cost of the tentative agreement over the contract period, assuming it sets the pattern for all other unions.
$10.6 billion
— Projected city budget gap in fiscal year 2027.
$9.1 billion
— Projected city budget gap in fiscal year 2026.
$6.4 billion
— Projected city budget gap in fiscal year 2025.
$4.1 billion
— Additional spending in fiscal year 2027 above the funds already in the budget to cover 1.25 percent annual raises.
$2.5 billion
— Additional spending in fiscal year 2023 above the funds already in the budget to cover 1.25 percent annual raises.
The New York City Fiscal Year 2024 Preliminary Budget balances current needs but faces significant future fiscal risks, including potential recessions and multi-billion dollar budget gaps. To ensure long-term stability, the City must address fiscal cliffs, bolster the Rainy Day Fund, and implement productivity programs to improve service efficiency.
Recommendations related to City Budget
The Administration’s planning for its Executive Budget should address the $1.1 billion fiscal cliff.
The Administration should deposit $1.0 billion in the Rainy Day Fund to prepare for future uncertainty.
The City should initiate a productivity PEG (program to eliminate the gap) that tasks agencies with restructuring programs to improve the quality and cost-effectiveness of City services.
The City should replicate the effort to increase the speed of land use reviews and remove administrative barriers to development across all City agencies and programs.
The City should prioritize critical services, manage them relentlessly, and protect from massive future cuts by restraining spending growth.
Key Data
$1.8 billion
— The amount maintained in the fiscal year 2023 General and Capital Stabilization Reserves.
$1 billion
— The amount of reported spending on migrants in fiscal year 2023 for which federal funding has not yet been secured.
$1.1 billion
— The size of the fiscal cliff the Administration's Executive Budget planning should address.
$5.0 billion
— The projected budget gap for fiscal year 2026.
$6.5 billion
— The projected budget gap for fiscal year 2027.
4,300
— The number of vacant positions reduced in the Fiscal Year 2024 Preliminary Budget.
New York City faces a manageable short-term fiscal outlook, but must address significant long-term challenges including underbudgeted labor contracts and recurring programs currently funded by temporary federal aid. To ensure stability, the city should prioritize a $1 billion deposit into the Rainy Day Fund while navigating potential revenue shortfalls and expenditure risks.
Recommendations related to City Budget
Given the rocky economic outlook, the City should deposit at least $1 billion into the Rainy Day Fund this year.
Key Data
$2.9 billion
— FY 2024 budget gap reported in the November 2022 financial plan.
$11.5 billion
— Potential wider budget gaps in fiscal year 2026.
$350 million
— Annual savings expected from eliminating half of the vacant civilian positions.
$2.5 billion
— Annual cost of 3 percent wage increases starting in the third year.
$1 billion
— Recommended deposit into the Rainy Day Fund.
$875 million
— Fiscal year 2023 vacancy savings estimated by the Office of the State Comptroller.
New York City's health insurance costs are projected to rise by 8.5% annually between fiscal years 2023 and 2026, highlighting the urgent need to reform municipal health benefits. Implementing the proposed Medicare Advantage plan for retirees could reduce annual city costs by $600 million, while broader reforms like premium sharing and consolidating welfare funds are necessary for long-term fiscal sustainability.
Recommendations related to City Budget
The agreement between the City and Municipal Labor Committee is beneficial in restraining cost growth and reducing the City’s other postemployment benefit (OPEB) liability, therefore it should be implemented.
Ultimately, the law in whole should be repealed since this level of benefit specificity should not be codified.
The City and Municipal Labor Committee also should undertake a comprehensive review of health and welfare benefits for employees and retirees and agree on a set of policy changes that preserves employee health and welfare while reducing the City’s costs to more manageable levels.
These changes should include premium sharing for employees and pre-Medicare retirees, elimination of some or all of the Medicare Part B reimbursement, and consolidation of union welfare fund benefits.
Key Data
8.5%
— Budgeted annual rate of increase for New York City's health insurance costs between fiscal years 2023 and 2026.
$200
— Approximate monthly premium retirees would pay to remain in their current Medigap program under the City and Municipal Labor Committee agreement.
$600 Million
— Estimated reduction in the City's annual costs from enrolling retirees in the Medicare Advantage plan.
New York City faces a precarious long-term fiscal outlook with projected budget gaps reaching $5.9 billion by fiscal year 2026, driven by rising pension costs and potential economic risks. To ensure future stability, the City must prioritize improving the quality and efficiency of government operations rather than relying on temporary budget fixes or illusory savings.
Recommendations related to City Budget
The City must start taking action immediately to restrain spending over the long run to reduce future budget gaps.
The City should both hire for critical functions and eliminate many more, ultimately unneeded, positions to achieve savings.
Agencies should have the flexibility to shift vacant positions across and within agencies to units and titles that have critical staffing needs.
The City should improve the quality and efficiency of the City’s operations today to preserve services for New Yorkers.
The City must implement more transformative changes to ensure future fiscal stability.
Key Data
$5.9 billion
— Projected budget gap for fiscal year 2026.
$376 million
— Annual value of illusory savings in fiscal years 2025 and 2026 that did not reduce the budget gap.
24,000
— Number of vacant full-time positions remaining in the City workforce.
$916 million
— Amount of spending reduced by the Program to Eliminate the Gap (PEG) in fiscal year 2023.
$1 billion
— New spending included in the November Plan for services provided to migrants.
$10 billion
— Potential budget gap in fiscal year 2026, even absent a recession.
Commissioner Aggarwala discussed the Adams administration’s plans to increase the city’s resilience, reduce greenhouse gas emissions, and strengthen the NYC Department of Environmental Protection (DEP). Rohit T. "Rit" Aggarwala is a widely recognized expert on urban sustainability, technology, and mobility, and, as Chief Climate Officer he oversees the administration’s environmental…
New York City faces a precarious long-term fiscal outlook with projected budget gaps reaching $5.9 billion by fiscal year 2026, exacerbated by potential recession risks and rising costs for migrant services and employee raises. To ensure future stability and preserve essential services, the city must prioritize improving operational efficiency and restructuring government functions rather than relying solely on spending re-estimates.
Recommendations related to City Budget
The City should make additional and ongoing efforts to reduce these gaps.
The City can and should both hire for critical functions and eliminate many more, ultimately unneeded, positions.
The federal and State governments should shoulder a significant portion of these costs for services provided to migrants.
The best way to preserve services for New Yorkers when they need them most is to improve the quality and efficiency of the City’s operations today.
More transformative changes are needed to ensure future stability.
Key Data
$4.6 billion
— Projected budget gap in fiscal year 2025.
$5.9 billion
— Projected budget gap in fiscal year 2026.
$1 billion
— New spending included in the budget for services provided to migrants.
$900 million
— Cost increase in the first year resulting from three percent annual employee raises.
$4.3 billion
— Potential revenue shortfall in the first year of a recession.
$10 billion and $16 billion
— Potential revenue shortfall over 3 years during a recession.
New York City's property tax system requires comprehensive reform to improve transparency and equity, particularly by addressing valuation disparities and the high tax burdens on rental and commercial properties. Policymakers should evaluate the proposed residential tax changes holistically to ensure that new exemptions and assessment methods do not create unintended inequities or hinder housing production.
Recommendations related to City Budget
The City should release a detailed analysis that assesses how tax burdens would be redistributed within the proposed new residential class.
The Commission should make additional recommendations if current assessment procedures do not lead to equitable treatment within rental and commercial property classes.
Policymakers must resist pulling apart the recommendations and instead consider the recommendations holistically to avoid piecemeal implementation that could lead to greater inequities.
The City should analyze the extent to which there may be intra-class inequities resulting from Department of Finance valuation methods for large rentals, utilities, and commercial property.
The City should narrow the differences in tax burdens between property classes to encourage the development of rental housing.
Key Data
$1.5 trillion
— Estimated total market value of the new residential class, representing a 40 percent increase from the current valuation.
0.81 percent
— The nominal tax rate for the new residential class before the application of a homestead exemption and circuit breaker.
$0.83 per $100
— The median effective tax rate for one- to three-family homes.
$1.53
— The effective tax rate for large rental buildings.
$1.72
— The effective tax rate for office buildings.
40 percent
— The potential increase in the City's total market value resulting from changing to sales-based valuation for coops, condos, and small rental buildings.
New York City's upcoming November modification to the fiscal year 2023 financial plan faces significant uncertainty due to potential recession risks, inflation, and budget gaps that could reach $10 billion. The city must address these challenges by evaluating revenue forecasts, implementing efficiency savings, and accounting for substantial budgetary risks like pension fund losses and fiscal cliffs.
Recommendations related to City Budget
The Office of Management and Budget should update the economic forecast because relying on an economic forecast from April 2022 is increasingly risky given current economic conditions.
The City should prioritize recurring efficiencies and restructuring operations over spending re-estimates and funding shifts when identifying savings.
The City must account for budgetary risks like pension fund investment losses and fiscal cliffs that are not currently reflected in the baseline budget gaps.
Key Data
$10 billion
— Potential future budget gaps.
3 percent
— Efficiency savings target for fiscal year 2023.
4.75 percent
— Efficiency savings target for fiscal year 2024 and beyond.
$1 billion
— Expected savings target in fiscal year 2023.
$1.6 billion
— Expected annual savings target starting in fiscal year 2024.
$4.2 billion
— Reported budget gap in fiscal year 2024.
New York City has utilized federal COVID-19 relief funds to support recurring programs, creating a significant fiscal cliff that could reach $1.1 billion by fiscal year 2026. To address this, the City must implement a robust tracking system for remaining funds and clearly define whether these programs will be terminated or permanently integrated into the budget through reallocated resources.
Recommendations related to City Budget
The City should establish a COVID Federal Aid Tracking Working Group to identify critical metrics for tracking federal funds.
The City should closely assess how best to allocate the remaining $6.2 billion in funds and provide transparent information about program goals and benchmarks.
The City should release a list of programs that will be underfunded when federal aid is depleted, quantifying the shortfall for each.
If the City intends to continue programs funded by one-time aid, it should include them in baseline spending and either widen budget gaps or fund them with reallocated resources.
The City should clearly state whether programs will be ended or continued once federal aid is depleted.
Key Data
$25 billion
— Total federal COVID-19 relief funds received by New York City from all sources.
$1.1 billion
— The projected federal funding fiscal cliff in fiscal year 2026.
$6.2 billion
— The amount of federal funds remaining to be spent over the three years following the testimony.
$5.1 billion
— The projected fiscal year 2026 budget gap if fiscal cliff programs are continued without reallocating City funds.
$376 million
— The portion of the fiscal year 2026 fiscal cliff attributed to 3K expansion.
$19 billion
— The amount of federal COVID-19 relief funds spent through the end of fiscal year 2022.
New York City faces significant future budget gaps approaching $10 billion, necessitating a plan to increase efficiency and reduce spending to ensure fiscal stability. By streamlining operations, managing the city's 28,000 vacancies, and modernizing labor contracts, the city can improve productivity and protect essential services without resorting to austerity.
Recommendations related to City Budget
The city needs to both restrain spending and better manage vacancies and hiring.
The city should reorganize operations, streamline bureaucratic approvals, leverage technology, and fundamentally change ways of doing business to boost productivity.
The city should modernize labor contracts to reduce recurring costs, fund workers’ raises, and narrow budget gaps.
The city should eliminate many thousands of unneeded vacant positions while simultaneously hiring in critical areas.
The city should stabilize the budget by prioritizing and better managing critical services.
Key Data
$27 billion
— The amount the city-funded portion of the budget has grown since 2013.
$10 billion
— The amount budget gaps will approach in the near future.
$2 billion to $3 billion
— The amount by which annual pension contributions will be higher than budgeted due to poor stock-market performance.
$1 billion to $2 billion
— The amount of recurring programs, such as 3-K expansion and housing-voucher enhancement, supported by one-time federal COVID aid and city revenues.
1.25%
— The set-aside percentage in the budget as a down payment for future collective-bargaining agreements.
12%
— The amount private-sector productivity has risen over the past decade.
New York City's implementation of a Program to Eliminate the Gap (PEG) in the November 2022 Financial Plan is a necessary step to stabilize the budget by identifying savings of 3 percent this year, growing to 4.75 percent in future years. By leveraging 28,000 current vacancies and reforming labor contract work rules, the City can increase efficiency and raise employee salaries without creating an unsustainable fiscal burden.
Recommendations related to City Budget
The City should identify savings of 3 percent this year, growing to 4.75 percent in future years, to restructure programs and operations to achieve the PEG targets.
The City should change work rules and other contractual components to increase efficiency and provide PEG savings to raise employee salaries without creating an unsustainable fiscal burden.
The City should leverage its current 28,000 vacancies to hire critical service-providing positions while still meeting the PEG target.
Key Data
3 percent to 5 percent
— The range of the Program to Eliminate the Gap (PEG) that was previously called for.
3 percent
— The directive for agencies to identify savings in the current year.
4.75 percent
— The target for agency savings in future years.
28,000
— The number of current vacancies in the City that should allow for hiring critical service-providing positions while meeting PEG targets.
New York City's adopted budget for fiscal year 2023 reports total expenditures of $101.1 billion, though actual spending obligations, after accounting for prepayments and reserves, total $104.7 billion. This reflects a 7.7 percent increase in City-funded spending, marking the highest growth rate in the past decade.
Key Data
$104.7 billion
— Total fiscal year 2023 budget obligations after adjusting for prepayments, deposits into reserves, and other accounting changes.
$77.6 billion
— Total fiscal year 2023 City Funds budget obligations after adjustments.
7.7 percent
— Year-over-year increase in City-funded spending, representing the highest growth rate in the past decade.
$1.8 billion
— Amount of spending added to the budget between the Executive Budget and the Adopted Budget.
$101.1 billion
— Reported total expenditures for the fiscal year 2023 Adopted Budget.
$9.9 billion
— Decline in federal aid from fiscal year 2022 to fiscal year 2023.
The proposed Penn Station Area General Project Plan faces significant fiscal risks, with the renovation estimated at $6 to $7 billion and the expansion projected to cost over $12 billion. Funding the local share through diverted property tax revenues (PILOTs) could impact the city's budget by spending local tax dollars without city oversight and setting a precedent of capturing municipal revenue for state capital needs.
Recommendations related to City Budget
Before any financing plan is approved, the scope of work should be reasonably detailed, scrutinized, and streamlined as much as possible to mitigate the risk of cost overruns.
The State and the railroads should focus on improving safety, circulation, and functionality and doing so in the most cost-effective manner.
The State and the railroads should avoid costly, non-essential, cosmetic improvements and should not preclude the possibility of future capacity or service enhancements.
It is important to evaluate how the State will manage and mitigate the financing risks inherent to value capture projects, including who will be responsible for interest payments until revenue from new development comes online or who will be responsible for paying for cost overruns.
The Penn Station project should not set up a circumstance or precedent for future decisions to capture the City’s tax revenue for State capital needs.
Ultimately, the Mayor and City Council should guide whether and how much of the City’s future property tax revenue should be dedicated to specific needs, such as a mass transit project, instead of other needs like public safety, education, or housing.
Empire State Development and the City should work together to develop a financing plan and a rezoning that makes sense for all New Yorkers.
Key Data
$6 to $7 billion
— Estimated cost just for the renovation of Penn Station, which is likely to be one of the costliest transportation projects in the nation's history.
$12 billion-plus
— Estimated cost for the expansion of Penn Station, in addition to the renovation costs.
Implementing a mandated class size reduction in New York City public schools is estimated to cost at least $500 million annually for grades K-5 alone, potentially doubling for grades K-12, without any additional state funding. This unfunded mandate would force the city to divert resources from other critical programs and restrict its flexibility to implement more targeted, evidence-based educational interventions.
Recommendations related to City Budget
The Governor should veto bill A.10498/S.9460, which would set class size limits in New York City public schools.
Accountability systems should be statewide, while providing the flexibility to assess districts based on their different needs, challenges, and opportunities.
An appropriate accountability system should focus on outcomes and not prescribe one education strategy.
Key Data
$500 million
— The City's preliminary estimate of the annual operating cost for reducing class size to the new limit in just grades kindergarten to five.
$18 million
— Funding already dedicated by the City to a class size reduction pilot.
72
— Number of schools in the class size reduction pilot designed to assess the benefits of the intervention.
2.6 million
— Number of students in New York State.
The fiscal year 2023 budget agreement increases spending by $1.15 billion, driving City-funded spending growth to nearly 8 percent, while failing to make a substantially higher deposit into the Rainy Day Fund. Despite a revenue windfall, the City faces annual budget gaps averaging $4 billion and must implement recurring efficiency savings of 3 percent to 5 percent to ensure long-term fiscal sustainability.
Recommendations related to City Budget
The City should have added another $1.5 billion to the Rainy Day Fund (RDF) to significantly strengthen the City’s ability to weather the next recession or emergency.
The Administration should require agencies to find recurring efficiency savings of 3 percent to 5 percent to be included in the November 2022 financial plan to bring spending levels back down to fiscally sustainable levels.
The City will need to take actions to bring recurring revenues and recurring spending in line to ensure long-term fiscal stability.
Key Data
$4.5 billion
— Amount of extra revenue available to allocate in the fiscal year 2023 budget.
$1.45 billion
— Total amount deposited into the Rainy Day Fund (RDF) in the budget agreement.
$1.15 billion
— Amount by which the budget agreement increases spending over the Executive Budget.
8 percent
— Projected growth in fiscal year 2023 City-funded spending.
$4 billion
— Average annual budget gap, which has increased from the $3.7 billion average projected in the Executive Budget.
$300 million
— Additional savings identified in the Adopted Budget, likely from re-estimates and debt service savings.
New York City should deposit at least $2.5 billion into its rainy day fund to prepare for potential economic downturns, utilizing current revenue surpluses from fiscal year 2022 and beyond. To ensure long-term fiscal stability, the city must also adopt a consistent, formula-based approach for future reserve deposits, including setting target sizes and withdrawal criteria.
Recommendations related to City Budget
The mayor and the city council should put a serious sum into the city’s rainy day fund as they conclude budget negotiations.
The city should add at least $2.5 billion to the rainy day fund this year.
The city should adopt a steady formula for future deposits into long-term reserves in years when the economy is growing.
The city should set a target size for the rainy day fund.
The city should mandate deposits and specify criteria for when these funds can be withdrawn.
Key Data
$2.5 billion
— Amount proposed to be added to the city's rainy day fund this year.
$3.3 billion
— Additional funds available in fiscal year 2022 ending on June 30.
$1.5 billion
— Additional funds available next year.
With New York City projecting $4.5 billion more in revenues for fiscal years 2022 and 2023 than previously estimated, city leaders are urged to deposit $2.3 billion into the Rainy Day Fund and add $1.7 billion to the labor reserve. These measures, along with shifting up to $500 million annually to reserves and establishing formal governance rules, aim to shield public services from potential revenue shortfalls of up to $19 billion in a future recession.
Recommendations related to City Budget
The City should deposit half of the newly identified resources, $2.3 billion, into the RDF.
The City should add $1.7 billion to the labor reserve over the financial plan.
The City should use the remaining resources for non-recurring actions.
The City should shift between $250 million and $500 million annually from the general and capital stabilization reserves to the RDF.
The City should commit to setting rules to govern the RDF in Local Law.
Key Data
$4.5 billion
— More in revenues available in fiscal years 2022 and 2023 than was projected in the Executive Budget.
$13 billion to $19 billion
— Revenue shortfall the City could face over three years in the next recession.
$2.3 billion
— Recommended deposit into the RDF from the newly identified resources.
$1.7 billion
— Recommended addition to the labor reserve over the financial plan.
$12 billion
— Recommended RDF total balance to protect the City.
5.8%
— Proposed increase in City-funded spending in the Fiscal Year 2023 Executive Budget, adjusted for prepayments.
The New York City Police Department's fiscal year 2023 executive budget totals $10.9 billion, with annual increases driven by collective bargaining agreements and new technology initiatives. Despite these budget adjustments, projected overtime spending for fiscal year 2022 is estimated to reach $743 million, exceeding the modified budget by $136 million and necessitating improved managerial controls.
Recommendations related to City Budget
Meaningful recurring reductions in NYPD overtime depend on effective managerial controls and changes to NYPD policies and procedures.
Key Data
$10.9 billion
— Total spending on the New York City Police Department in fiscal year 2023.
$140 million
— Annual increase added to the NYPD City-Funded Budget in the fiscal year 2023 Executive Budget.
$94 million
— Increase in the NYPD overtime budget for fiscal year 2022 compared to the Preliminary Budget.
$18 million
— Increase in the NYPD overtime budget for fiscal year 2023 compared to the Preliminary Budget.
$743 million
— Estimated total overtime spending by the NYPD by the end of fiscal year 2022.
$136 million
— Amount by which estimated fiscal year 2022 overtime spending exceeds the newly modified Executive Budget.
Ending the 421-a tax exemption program will not immediately generate $1.8 billion in revenue for the city, as existing exemptions will persist for decades. To address housing needs, the city must implement a successor to 421-a alongside broader reforms like reducing construction costs, increasing zoning capacity, and overhauling the property tax system.
Recommendations related to City Budget
A successor to 421-a is a key component of a broader package of policies and programs needed to boost housing production.
The city should implement policies to reduce construction and operating costs.
The city should focus on increasing as-of-right zoning capacity.
The city should prioritize reforming the property tax.
Key Data
$1.74 billion
— Foregone tax revenue in fiscal year 2023.
$1.65 billion
— Foregone tax revenue in fiscal year 2029.
$123 million
— Estimated 'mini tax' property taxes paid by 421-a properties in fiscal year 2023.
60,149
— Number of tax lots expected to receive 421-a exemptions in the upcoming fiscal year.
$451 million
— Average annual 'available' tax revenue from fiscal year 2030 to fiscal year 2036.
$1.7 billion
— Value of 421-a exemptions expected in the upcoming fiscal year.
The NYC FY 2023 Executive Budget added 3,011 new positions despite the existence of 18,000 vacant city jobs, effectively reversing 69 percent of previous vacancy reductions. Instead of increasing headcount, the city should focus on redistributing existing vacancies and removing bureaucratic obstacles to hiring in priority areas.
Recommendations related to City Budget
Rather than add positions, the City should redistribute available vacancies across departments, within agencies, or across agencies.
Furthermore, until the City reduces managerial and procedural roadblocks to hiring, City agencies may struggle to fill priority vacancies.
Key Data
18,000
— Number of vacant City jobs available, indicating that vacancy elimination should not constrain hiring.
$1 billion
— Amount of annually recurring savings included in the Preliminary Budget's Program to Eliminate the Gap.
7,026
— Number of vacant full-time positions eliminated at 42 agencies to achieve savings.
3,011
— Number of positions added in the fiscal year 2023 Executive Budget.
0.65 percent
— Decrease in total authorized City headcount from November 2021 to April 2022.
The New York City Fiscal Year 2023 Executive Budget increases spending by $2.3 billion, a 5 percent growth from the previous year, while failing to implement sufficient efficiency savings to offset these costs. Despite a $1.7 billion increase in expected tax revenues, the city faces long-term fiscal risks, including a $2 billion fiscal cliff in 2026 and potentially insufficient labor reserves.
Recommendations related to City Budget
The City should grow rainy day reserves to over $8 billion by the end of the financial plan.
The Mayor and City Council should identify and include 3 percent efficiency savings in the Adopted Budget.
The City should make every effort it can immediately and include savings in the budget when adopted.
Key Data
$2.3 billion
— Increase in City-funded fiscal year 2023 spending.
5 percent
— Growth in spending from fiscal year 2022.
$1.7 billion
— Increase in expected tax revenues this year.
$2 billion
— Fiscal cliff projected in fiscal year 2026.
$3.8 billion
— Potential annual spending increase by fiscal year 2026 if annual three percent raises are implemented.
New York City faces a potential $9 billion fiscal disaster by 2026 due to existing budget gaps, looming fiscal cliffs, and the cost of future employee raises. To avoid this, the city must prioritize fiscal discipline by depositing excess revenue into the Rainy Day Fund, addressing nonrecurring funding sources, and increasing productivity to offset labor costs.
Recommendations related to City Budget
The mayor and council must resist the temptation to use additional tax revenue to expand services, instead depositing this money into the Rainy Day Fund for the next recession.
The city should schedule $500 million annual deposits to the Rainy Day Fund, which could come from the budgeted General and Capital Stabilization Reserves.
The executive budget should address the budget’s fiscal cliffs where ongoing programs are funded with nonrecurring city and federal COVID-19 funds.
The city must lower costs, ideally by improving efficiency or by reducing lower impact programs, such as implementing a 3% Program to Eliminate the Gap for Productivity.
The city should use this next round of collective bargaining contracts to further increase productivity, which would generate savings to fund raises and stabilize the budget.
Key Data
$9 billion
— The combined total of the existing budget gap, employee raises, and fiscal cliff that creates a recipe for fiscal disaster by 2026.
$17 billion
— The potential three-year revenue shortfall if the city experiences another recession.
$900 million
— The total of fiscal cliffs for next year where ongoing programs are funded with nonrecurring city and federal COVID-19 funds.
$1.5 billion
— The estimated annual savings from implementing a 3% Program to Eliminate the Gap for Productivity.
$4.3 billion
— The cost of 3% annual raises for city employees in the third year.
$1.4 billion
— The amount by which the adopted budget is usually larger than the preliminary budget.
Lorraine Grillo is the First Deputy Mayor of the City of New York, appointed by Mayor Eric Adams. Grillo's direct reports include Deputy Mayors for Economic and Workforce Development, Operations, Strategic Initiatives, and Human Services, as well as the Office of Management and Budget, Department of Finance, Chief Housing Officer,…
The City's Program to Eliminate the Gap (PEG) has relied heavily on re-estimates and vacancy reductions rather than true efficiency gains, with only 6.2 percent of cumulative savings coming from increased productivity. To improve fiscal stability, the City should implement a productivity PEG targeting 3 percent of agency spending, which would generate approximately $1.5 billion in savings for fiscal year 2023.
Recommendations related to City Budget
The Mayor’s Office of Management and Budget should initiate a productivity PEG to generate options to save 3 percent of City-funded agency spending—growing from $1.5 billion in fiscal year 2023 to $1.6 billion by fiscal year 2026.
The City should identify and implement efficiencies in centrally managed services like space leasing and fleet, which should provide additional savings.
Agencies should identify management reforms that reduce unit costs, streamline operations, and leverage technology.
The analytic work for the productivity PEG should start immediately, and the total or selected productivity improvements should be part of the Executive Budget due in late April.
Key Data
6.2 percent
— Cumulative five-year savings from the Preliminary Fiscal Year 2023 Budget PEG that came from increased efficiency.
$1.5 billion
— Proposed savings target for fiscal year 2023 representing 3 percent of City-funded agency spending.
7,026
— Number of full-time positions eliminated across 42 agencies through the PEG's vacancy reductions.
$290 million
— Annual savings generated by the elimination of 7,026 full-time positions.
0.15 percent
— Efficiency savings initiatives relative to total City-funded spending of agencies participating in the PEG in fiscal years 2022 and 2023.
61.6 percent
— Portion of PEG savings that came from re-estimates of planned spending and shifting support for services from City funds to other sources.
New York City's staffing challenges are driven by management and hiring system inefficiencies rather than a lack of available positions, as the city maintains over 18,000 vacant full-time roles. Rather than increasing authorized headcount, the city should focus on improving hiring processes and increasing flexibility in how it allocates and reallocates personnel to meet priority needs.
Recommendations related to City Budget
The City should increase the flexibility of its systems that control, allocate, and reallocate headcount to better align vacancies with priorities.
The City should improve the systems it uses to control and manage hiring and to administer the civil service system.
The City should leverage technology and other process reforms to speed up the hiring process.
The City should ensure adequate, timely civil service tests and lists to speed hiring and encourage more to seek City employment.
The City should move headcount across agencies, within agencies across units, or allocate vacancies agency-wide to improve the ability to hire priority staff.
Key Data
7,026
— Number of vacant full-time positions eliminated across 42 agencies in the Fiscal Year 2023 Preliminary Budget Program to Eliminate the Gap.
$290 million
— Annual savings generated by the elimination of 7,026 vacant full-time positions.
18,000
— Number of vacant full-time positions the City could still hire even after the Program to Eliminate the Gap.
7.3 percent
— Vacancy rate for full-time positions based on December 2021 on-board staff and November 2021 authorized levels.
246 days
— Median time between exam administration and results for civil service lists in the first four months of fiscal year 2022.
The NYPD's fiscal year 2023 budget is projected at $10.8 billion, which is $83 million lower than the previous year, though the department faces significant challenges with overtime spending that is likely to exceed the budget by over $200 million. Additionally, the city is relying on $500 million in one-time federal aid to offset operating costs, while reversing the planned transfer of school safety personnel to the Department of Education.
Recommendations related to City Budget
Significant managerial controls will be necessary to keep uniformed overtime closer to budgeted levels this year and next.
Key Data
$10.8 Billion
— Projected NYPD spending for fiscal year 2023.
$83 Million
— The amount by which the fiscal year 2023 NYPD budget is lower than fiscal year 2022.
$500 Million
— The amount of federal American Rescue Plan funds used to replace City funds in the fiscal year 2022 operating budget.
$258 Million
— The amount by which fiscal year 2022 overtime spending could exceed its budget if current rates continue.
$34.6 Million
— Annual savings starting in fiscal year 2023 from eliminating 560 vacant school safety positions.
The New York City Police Department's fiscal year 2023 budget is projected to reach $10.8 billion, with significant concerns regarding the department's ability to manage overtime spending, which is projected to exceed its budget by over $200 million in fiscal year 2022. Additionally, the department's authorized uniformed headcount remains at 35,030, and the planned transfer of school safety personnel to the Department of Education has been reversed.
Recommendations related to City Budget
Significant managerial controls will be necessary to keep uniformed overtime closer to budgeted levels this year and next.
Key Data
$10.8 billion
— The projected fiscal year 2023 NYPD budget, including both the department’s operating budget and central expenses.
$742 million
— The amount fiscal year 2022 overtime spending could reach at the current rate, closer to pre-pandemic levels.
$434 million
— The amount included in the fiscal year 2023 budget for overtime.
35,030
— The authorized uniformed headcount for the NYPD throughout the financial plan.
5,290
— The number of School Safety personnel remaining within the NYPD after the planned transfer to the Department of Education was reversed.
2.2 percent
— The NYPD's fiscal year 2022 Program to Eliminate the Gap (PEG) as a portion of the department’s City-funded operating budget.
The New York City Housing Authority faces significant financial instability due to rising operating costs, declining rent collection, and a heavy reliance on city subsidies. To address these issues, the city and state should approve the Preservation Trust and implement labor productivity increases to align operating costs with industry standards.
Recommendations related to City Budget
The City and State should approve the Preservation Trust, which has the potential to generate much-needed capital investment and to deliver significant operating savings and productivity improvements.
NYCHA needs to redouble efforts to boost productivity and bring operating costs closer to peer housing authorities and private property managers.
NYCHA should implement labor productivity increases, which would bring operating costs in line with industry benchmarks and maximize the potential benefits of the Preservation Trust.
Key Data
$2.7 billion
— Public housing operating expenses in NYCHA’s calendar year 2022 adopted budget.
$1,300
— Monthly operating costs per unit projected for 2022.
70 percent
— NYCHA’s rent collection rate as of January 2022.
$132 million
— The amount the budget gap would increase if the rent collection rate continues at 70 percent in 2022.
$1.2 billion
— Amount spent in operating funds since 2018 on various action plans mandated under the HUD settlement agreement.
$330 million
— The amount of NYCHA’s operating reserves following a 35 percent reduction.
The City's Preliminary Fiscal Year 2023 budget requires further structural reforms, including a 3 percent Program to Eliminate the Gap (PEG) and annual $500 million deposits into the Rainy Day Fund, to ensure long-term fiscal stability. Addressing looming fiscal cliffs, such as the $650 million in recurring programs currently unfunded for 2023 and the $1.3 billion in federal aid expiring by 2026, is essential to managing future budget gaps.
Recommendations related to City Budget
The Executive Budget should include another Program to Eliminate the Gap (PEG) focused on increasing agency and central service efficiency.
The Executive Budget should include a PEG targeting 3 percent in fiscal year 2023 and each year thereafter, focused on strategies that increase efficiency and reduce unit costs.
The Executive Budget should include efficiency savings from centrally managed services like space and fleet.
The Executive Budget should propose a plan to start to transition recurring programs to recurring funding to address fiscal cliffs.
The Executive Budget should include planned deposits of at least $500 million annually in each year of the financial plan for the Rainy Day Fund.
The Mayor and City Council should advance legislation to mandate deposits and establish stricter controls for use of the Rainy Day Fund.
Key Data
$650 million
— Recurring programs funded in fiscal year 2022 that were not included in the fiscal year 2023 budget.
$1.3 billion
— Amount of recurring programs that will lose federal funding in fiscal year 2026.
$6.1 billion
— Current level of City reserves.
8.3 percent
— Current reserves as a percentage of City-funded expenditures.
$1 billion
— Current balance of the Rainy Day Fund.
$500 million
— Planned deposit to the Rainy Day Fund this year.
New York City's adopted budget for fiscal year 2023 totals $104.7 billion in obligations, with City Funds spending rising by 7.7 percent to $77.6 billion. This growth, the highest in the past decade, is partially offset by a $9.9 billion decline in federal COVID-related aid compared to the previous year.
Key Data
$104.7 billion
— Total All Funds fiscal year 2023 budget obligations after adjustments.
$77.6 billion
— Total City Funds fiscal year 2023 budget obligations after adjustments.
7.7%
— Year-over-year increase in City-funded spending, representing the highest growth rate in the past decade.
$5.5 billion
— Dollar amount increase in City Funds spending from fiscal year 2022 to fiscal year 2023.
$1.8 billion
— Amount added to the fiscal year 2023 budget between the Executive Budget and the Adopted Budget.
$9.9 billion
— Decline in federal aid from fiscal year 2022 to fiscal year 2023.
The City's fiscal year 2023 preliminary budget includes a Program to Eliminate the Gap that saves $866 million this year and $1.1 billion annually thereafter, while facing significant fiscal cliffs in future years. To ensure long-term stability, the City must identify additional efficiency savings, rationalize benefit levels through collective bargaining, and commit to annual deposits of at least $500 million into the Rainy Day Fund.
Recommendations related to City Budget
The Administration should identify additional agency and central function efficiency savings to include in the Executive Budget.
The Administration should work with its municipal unions to identify and implement efficiency savings and rationalize benefit levels and administration during collective bargaining negotiations.
The Administration should review federal COVID-related spending to ensure resources strategically support the City’s recovery without creating unsustainably-funded programs.
To help the City weather the inevitable future recession or severe emergency, the financial plan should include annual deposits of at least $500 million to the Rainy Day Fund.
The City should take significant additional actions in the Executive and Adopted Budgets to make government more efficient, stave off the looming fiscal cliffs, and save for the inevitable next downturn.
Key Data
$866 million
— Savings delivered in fiscal year 2022 by the Program to Eliminate the Gap.
$653 million
— The fiscal year 2023 fiscal cliff caused by recurring programs that were only funded for fiscal year 2022.
$2.7 billion
— The projected budget gap for fiscal year 2024.
3,200
— Number of unneeded vacant positions removed from the fiscal year 2022 authorized headcount.
$1.1 billion
— Annually recurring savings delivered by the Program to Eliminate the Gap in fiscal year 2023 and beyond.
New York City can achieve significant efficiency savings by modernizing labor contracts, streamlining procurement, and better managing citywide assets like fleet and office space. These reforms, alongside a disciplined approach to agency budgeting, would improve fiscal stability and service quality without requiring service cuts or layoffs.
Recommendations related to City Budget
The administration and unions should modernize employee benefits, eliminate outdated salary differentials, and change contractual work rules that impede efficient service delivery.
The city should lengthen sanitation routes so that trucks are full when they tip to save more than $120 million annually.
The city should make the Absent Teacher Reserve time-limited, giving employees an appropriate opportunity and incentive to find new positions within the department.
The city should consolidate the roughly 75 separate union welfare funds to save $160 million annually through administrative efficiencies and greater purchasing power.
The city should increase job assignment flexibility, extend the workweek to 40 hours for all employees, and alter vacation and sick leave accrual policies.
The city should streamline the city’s lengthy and cumbersome procurement process to reduce the cost of large contracts.
Key Data
$1.3 billion
— Amount the city spent to lease space in fiscal 2021.
$160 million
— Potential annual savings from consolidating the roughly 75 separate union welfare funds.
$120 million
— Potential annual savings from lengthening sanitation routes so that trucks are full when they tip.
$675 million
— Potential annual savings if city employees shared premium costs slightly below the level of state employees.
$160 million
— Potential savings from reducing the cost of large contracts by 1%.
$80 million
— Potential savings from greater centralization of procurement.
The Governor's Fiscal Year 2023 Executive Budget includes proposals to increase housing supply through transit-oriented development, accessory dwelling units, and commercial-to-residential conversions. Additionally, urgent action is required to stabilize the New York City Housing Authority by approving the Preservation Trust bill, enacting procurement reform, and increasing financial support for public-private partnerships to renovate 110,000 public housing units.
Recommendations related to City Budget
Requiring local governments to zone for denser transit-oriented development would increase regional housing supply and take advantage of recent investments in commuter rail.
Legalizing accessory dwelling units would help meet the diverse housing needs of New Yorkers.
Provisions to lift the cap on residential floor area ratios would give New York City more tools and flexibility to stimulate housing production.
Encouraging commercial-to-residential conversions would give New York City more tools and flexibility to stimulate housing production.
The State should approve the proposed Preservation Trust bill to 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.
Key Data
110,000
— Number of public housing units to be renovated through the Preservation Trust.
New York City expects to receive more than $22 billion in federal COVID-19 aid between fiscal years 2020 and 2025, yet current reporting mechanisms fail to provide the transparency needed to manage these funds effectively. To ensure accountability and maximize the impact of these resources, the City should establish a robust public tracker that details specific programs, funding levels, and performance metrics.
Recommendations related to City Budget
The City should create a robust public tracker to support diligent management, ensure funds have maximum impact, and allow the public to know how money is being spent.
The Administration should implement a citywide performance management system in which leaders and managers participate in a structured process to regularly review the tracker’s data.
The Mayor should establish a COVID Federal Aid Tracking Working Group, including representatives from key City agencies, fiscal monitors, advocates, and community groups, to develop the tracker's framework.
The COVID-19 tracker should be built and maintained by government, based on consultation with nonprofit and private organizations and fiscal oversight entities.
The tracker should include the appropriate funding streams, identify the programs being funded, and include performance goals and metrics for program inputs, outputs, outcomes, quality, and efficiency.
Key Data
$22 Billion
— Total expected federal COVID-19 aid for New York City between fiscal year 2020 and fiscal year 2025.
$16.5 Billion
— Total federal aid in the New York City budget for fiscal year 2022.
$5.9 Billion
— Amount of American Rescue Plan State and Local Recovery Funds that should be prioritized for tracking.
$7.0 Billion
— Amount of Education Stabilization Funds from the American Rescue Plan and the Coronavirus Response and Relief Supplemental Appropriations Act that should be prioritized for tracking.
$700 Million
— Expected American Rescue Plan State and Local Recovery funds that are not currently reflected in the November 2021 financial plan.
$350 Million
— Funding allocated for academic recovery for public schools.
The proposed Penn Station Area redevelopment project lacks sufficient detail regarding its financing structure, specifically how it will impact the City's budget and whether it relies on appropriate value capture mechanisms. Officials must ensure the project avoids non-essential costs and establishes a collaborative planning process that protects the City's general fund revenue.
Recommendations related to City Budget
The plan should avoid costly, non-essential cosmetic improvements and should not preclude the possibility of future capacity or service enhancements.
The public approval process should include broader discussions about financing risks and the most effective strategies for mitigating and managing those risks.
New York City should have a substantive role in the planning process and should be a partner that agrees to the use of tax revenue that would otherwise flow to the City’s general fund.
There should be additional public discussion about the merits of the financing strategy compared to other alternatives and whether this is the most appropriate financing approach for the renovation of Penn Station.
Discretionary tax abatements should be considered in context.
Key Data
$17 billion
— Estimated cost of the entire Penn Station project, including renovation, expansion, land acquisition, demolition, and public space improvements.
$6 to $7 billion
— Estimated cost of a scaled back renovation project without the proposed Penn South expansion.
$1.3 billion
— Funding included in the State’s Fiscal Year 2022 Enacted Budget for Penn Station-related projects.
50 percent
— Anticipated share of the Gateway project funding to be covered by the federal government.
25 percent
— Anticipated share of the Gateway project funding to be covered by New Jersey.
25 percent
— Anticipated share of the Gateway project funding to be covered by New York.
The November 2021 Financial Plan for New York City faces significant fiscal challenges, including recurring budget gaps and a looming federal fiscal cliff, despite some positive economic indicators. To ensure long-term sustainability, the incoming administration must proactively restructure the budget, implement a Program to Eliminate the Gap, and negotiate productive collective bargaining agreements.
Recommendations related to City Budget
Mayor-elect Adams should actively manage the budget gaps starting on day one.
The City’s plan should include annual deposits to the Rainy Day Fund crucial to preparing for the next recession.
Mayor-Elect Adams should proactively take steps to restructure the City’s budget and workforce to be fiscally sustainable with recurring City revenues.
Mayor-Elect Adams should support a 3 percent to 5 percent Program to Eliminate the Gap or PEG.
The current and incoming Administrations should work together to have options for the Program to Eliminate the Gap ready by January 1st to be considered for the Preliminary Budget.
Mayor-elect Adams should work with municipal unions to leverage the next round of collective bargaining agreements to make changes allowing the City to be more productive, use those savings to fund raises, close budget gaps, and help City employment be more supportive to skill building and career enhancement.
Key Data
$2.9 billion
— Budget gap for the next year.
$2.7 billion
— Budget gap in fiscal year 2024.
$2.1 billion
— Budget gap in fiscal year 2025.
$750 million
— Amount by which budget gaps are higher annually due to illusionary labor and attrition savings.
$540 million
— Cost of 2 percent annual raises for City employees this year.
$1.2 billion
— Cost of 2 percent annual raises for City employees in fiscal year 2023.
47 is the number of people who will have held the office of NYC Comptroller once Brad Lander is sworn in on January 1, 2022. At a breakfast with CBC Trustees, President Andrew Rein sat down for a wide-ranging conversation with the Comptroller-elect, covering subjects including risks to New York’s…
Brad Lander is the NYC Comptroller-elect and current member of the New York City Council, representing the 39th District in Brooklyn. He serves as the Council’s Deputy Leader for Policy, and he co-founded the Council’s Progressive Caucus. Prior to serving in the City Council, Brad directed the Pratt Center for…
NYCHA faces capital needs exceeding $40 billion, prompting the City to increase its capital commitment to $4.6 billion through fiscal year 2031. To ensure these funds are used effectively, the City and State must implement procurement reforms and establish a Preservation Trust to provide additional financing options for necessary repairs.
Recommendations related to City Budget
State lawmakers should act swiftly to grant NYCHA authorization to use construction manager-build or construction manager-at risk procurement methods, even if the Trust is not speedily authorized.
NYCHA’s federal monitor, along with NYCHA and the City, should strongly advocate for HUD to grant waivers from restrictive federal public housing procurement rules for both its annual Section 9 subsidies and any additional federal funding NYCHA receives under the Build Back Better bill.
City and State lawmakers should create the Preservation Trust, since it will provide NYCHA with additional options to finance needed capital investment.
Key Data
$40 billion
— NYCHA's total capital needs due to years of underinvestment, mismanagement, and cost inflation.
$4.6 billion
— Planned commitments for NYCHA in the Fiscal Year 2022 Adopted Capital Commitment Plan through fiscal year 2031.
$2.9 billion
— Planned commitments for NYCHA through fiscal year 2025.
$257 million
— Total capital funding committed to NYCHA in the decade prior to the recent increase (fiscal years 2006 through 2015).
$300 million
— City capital funding included in the Department of Housing Preservation and Development’s capital plan for PACT projects.
39 percent
— Amount by which NYCHA's per-unit operating costs were higher than private sector costs in 2015.
New York City faces annual budget gaps of $5 billion and must manage $13 billion in federal COVID aid effectively to ensure long-term fiscal stability. To address these challenges, the administration should implement a citywide performance management system, pursue a 3-5% savings program, and align health benefit costs with sustainable levels.
Recommendations related to City Budget
Adams should set a framework defining the right data and process to institute a performance management process citywide and then adapt it to each agency’s services and culture.
The administration should make public detailed data on federal COVID revenues, expenditures and program activities and outcomes to ensure $13 billion in COVID federal aid has impact.
The city should bring the budget and workforce to levels supported by the city’s already high taxes to address fiscal instability.
The administration should implement a 3-5% savings Program to Eliminate the Gap (“PEG”) that is intimately tied to the new performance management system.
Additional budget savings should come from bringing health benefit costs to sustainable levels by reasonable employee premium-sharing, like that for state employees.
Key Data
$13 billion
— Amount of federal COVID aid that the administration should make public detailed data on to ensure it has impact.
$5 billion
— Annual budget gaps the city faces starting next year.
3-5%
— Targeted savings range for the Program to Eliminate the Gap (PEG) called for by the administration.
New York City faces annual budget gaps estimated between $3.9 billion and $4.1 billion starting in fiscal year 2023, alongside a $122 billion long-term liability for retiree health benefits and $40 billion in capital needs for public housing. To ensure long-term stability, the incoming administration must implement recurring savings through a Program to Eliminate the Gap, reform property taxes, and establish sustainable health benefit cost-sharing.
Recommendations related to City Budget
The City should spread federal aid over multiple years to provide time to restructure spending to be sustainably supported with recurring revenues.
The incoming Administration should deploy a regular, periodic Program to Eliminate the Gap (PEG) that identifies and implements recurring savings and continued, modest workforce reduction through attrition.
The City should bring health and welfare benefit costs to sustainable levels, which requires negotiating changes with municipal labor unions.
The City should enact a local law to limit withdrawals from the Rainy Day Fund to a recession or severe emergency.
The City should critically assess how resources are allocated across schools to maximize student achievement and reduce educational disparities.
The City should work with labor to change work rules to optimize collection routes, increase flexibility in collection frequency, and modernize labor differential payments.
The City should benchmark H+H’s unit costs and revenue recovery ratios against nonprofit safety net providers in the city to improve efficiency.
The City should establish a performance management framework that is adapted to agencies given their operations and culture.
The City should reform the property tax system to increase equity.
The City should rationalize economic development tax incentives by assessing the impact and return on investment of as-of-right programs.
Key Data
$3.9 billion to $4.1 billion
— Estimated annual budget gaps beginning in fiscal year 2023.
$21.1 billion
— Total COVID-related federal aid expected by New York City from fiscal year 2020 through fiscal year 2025.
$7.2 billion
— Total annual cost of City employee and retiree health benefits.
$122 billion
— Long-term fiscal liability for other postemployment benefits (OPEB).
$40 billion
— Capital needs at the New York City Housing Authority (NYCHA).
$18 billion
— Expected City-funded expenditures for fiscal year 2022.
New York City's retiree health benefits cost $3.1 billion annually and contribute to a $122 billion long-term liability, yet recent efforts to reduce these costs fail to provide savings to the city's operating budget. Instead of lowering expenditures, the $600 million in annual savings are diverted to a fund for employee benefits, leaving the city's budget gaps unchanged.
Recommendations related to City Budget
The City should reduce the cost of retiree health benefits by 50 percent to better align with other public and private sector workers.
The City should implement premium sharing for Medicare and pre-Medicare eligible retirees to help manage rising health care costs.
The City should consider the elimination or reduction of Part B premium reimbursement as a method to control long-term liabilities.
The City should ensure that resulting savings from health care changes flow to the City’s bottom line as part of the annual budget process rather than being used to bolster other labor-related costs.
Key Data
$3.1 billion
— Annual cost of retiree health and welfare benefits.
$122 billion
— City's current liability for retiree health benefits, also known as other postemployment benefits (OPEB).
$600 million
— Annual reduction in the City's cost of retiree health insurance under the new approach.
5.5 percent
— Average growth of retiree health insurance costs from fiscal year 2014 to fiscal year 2022.
4.3 percent
— Annual average increase for employee health insurance costs.
$2.6 billion
— Cost for pre-Medicare insurance, Medicare Part B reimbursement, and Medigap plans.
The NYPD's fiscal year 2022 budget is set to increase by $465 million, reversing previous spending decreases, despite ongoing efforts to transfer certain units like school safety and crossing guards to other agencies. The department also struggled to control overtime costs, which reached $474 million in fiscal year 2021, significantly exceeding the budgeted amount.
Key Data
$474 million
— FY 2021 overtime expenditures, which were 77 percent over budget.
$465 million
— The spending increase in the Adopted Budget for fiscal year 2022 against fiscal year 2021.
$322 million
— The actual fiscal year 2021 budget cut to NYPD’s City-funded expenditures.
$42.4 million
— The value of the School Crossing Guard unit transfer from the NYPD to the Department of Transportation, which is not yet included in the budget.
$9.9 billion
— Total NYPD City-funded spending budgeted in fiscal year 2021.
$4.5 million
— The value of the Homeless Unit transferred out of the NYPD to the Department of Homeless Services in fiscal year 2021.
The Fiscal Year 2022 Adopted Budget temporarily reversed hiring freezes, increasing authorized headcount to 337,294 positions while deferring significant staff reduction plans to the next administration. Although attrition savings for fiscal years 2023 to 2025 remain largely unchanged at an average of $283 million annually, the immediate budget restoration facilitates increased hiring across most city agencies.
Recommendations related to City Budget
The next administration must exercise restraint regarding the city's hiring and attrition management savings plan.
Key Data
337,294
— The authorized headcount for fiscal year 2022, which is nearly the highest ever.
$283 million
— The average annual savings for fiscal years 2023 to 2025.
3,987
— The number of positions associated with the average annual savings for fiscal years 2023 to 2025.
$30.4 million
— The attrition savings for fiscal year 2022 following restorations in the Executive and Adopted Budgets.
313,875
— The City's on-board headcount as of March 2021.
23,419
— The capacity to hire full-time and full-time equivalent positions provided by the budget.
$103.3 billion is the total amount of spending authorized by the City Council for Fiscal Year 2022. While officials call it a budget of $98.3 billion, the larger figure reflects the full amount to be expended, including $6 billion available from the prior year due to higher than expected tax…
New York City's official fiscal year 2022 budget of $98.7 billion obscures the true spending obligation, which is actually $103.3 billion when accounting for prepaid bills and other adjustments. This discrepancy of $4.6 billion highlights how routine fiscal management tools can distort the transparency of annual spending trends.
Key Data
$98.7 billion
— Official expenditure total for fiscal year 2022.
$103.3 billion
— Actual expenditure obligation for fiscal year 2022.
$4.6 billion
— Amount by which the actual expenditure obligation exceeds the official plan.
$6.1 billion
— Adjustment to add back fiscal year 2022 obligations prepaid in fiscal year 2021.
$500 million
— Adjustment for the deposit to the Rainy Day Fund.
$300 million
— Adjustment for the General Reserve contingency fund.
The Fiscal Year 2022 Adopted Budget includes a $500 million deposit into the Rainy Day Fund but fails to address long-term fiscal stability, leaving the next administration with annual budget gaps of approximately $5 billion. Furthermore, the budget relies on federal aid to fund between $1.3 billion and $4.0 billion in recurring programs, creating a significant fiscal cliff once those funds are exhausted.
Recommendations related to City Budget
The City should enact legislation that sets minimum mandatory deposits into the Rainy Day Fund to reach the $11 billion target.
It is imperative that the City track federal spending in detail, including metrics for program goals and results.
The City must scrub agency operating budgets to evaluate effectiveness, prioritize programs, and increase operational efficiency.
The City should make annual deposits into the Rainy Day Fund following the initial $500 million contribution.
The City must address the looming fiscal cliff created by using federal funds for recurring programs.
Key Data
$500 million
— Initial deposit made into the City’s new Rainy Day Fund.
$11 billion
— Estimated amount the City should have in the Rainy Day Fund to weather a recession.
$1.3 billion to $4.0 billion
— Amount of federal aid used annually to fund recurring programs, creating a fiscal cliff.
$5 billion
— Annual budget gaps projected for fiscal years 2023 to 2025.
$1 billion
— Amount of annual unspecified labor savings included in the budget, which is criticized as a ruse.
$15 billion
— Amount of additional federal aid received.
The New York City Fiscal Year 2022 Executive Budget proposes $140 million in new small business support programs, but these initiatives risk duplicating existing federal and state aid. To maximize economic recovery and fiscal stability, the City should prioritize identifying and filling specific gaps in current support rather than creating redundant programs.
Recommendations related to City Budget
The City should focus on filling gaps left by federal and State programs rather than creating duplicative initiatives.
The City must identify potential gaps first by determining which businesses are eligible for existing programs and whether those programs meet their needs.
As the City finalizes programs in budget adoption, it should avoid potential redundancies to maximize the value of its efforts.
The City should consider whether increasing efforts to help small businesses access federal support would be a more efficient use of resources.
The City should clearly identify gaps where federal and State programs do not provide sufficient support and where City technical assistance would be most valuable.
Key Data
$140 million
— Total funding for three proposed small business support programs in the New York City Fiscal Year 2022 Executive Budget.
$100 million
— Proposed funding for the Small Business Rental Assistance program.
$100 million
— Proposed funding for the Small Business Loans fund.
$10 million
— Proposed allocation for Commercial Lease Legal Assistance.
$813 billion
— Total appropriation for the federal Paycheck Protection Program.
$28.6 billion
— Total funding for the federal Restaurant Revitalization Fund.
New York City's proposed $98 billion budget relies on federal aid that should be used for strategic economic recovery rather than expanding long-term payroll commitments. Essential city services like Universal Pre-K should be funded through sustainable tax revenues instead of temporary grants to ensure long-term fiscal stability.
Recommendations related to City Budget
The proposed $98 billion Executive Budget must be amended during the next three weeks before being approved by the City Council.
Federal relief monies should not be used to expand the city payroll and long-term program commitments.
City priorities such as Universal Pre-K and appropriate reimbursement for human services agency contracts should be part of the baseline budget funded by sustainable city tax revenues not by temporary federal grants.
Federal aid from the American Rescue Plan should be concentrated on strategic interventions designed in partnership with industry and nonprofit groups with a focus on restoring 500,000 lost private sector jobs.
The administration and City Council should adopt a process for greater transparency and consultation with affected industries on how American Rescue Plan funds are invested.
Key Data
$6 billion
— One-time infusion of flexible federal aid available to New York City for recovery efforts.
$98 billion
— Total value of the proposed Executive Budget that requires amendment.
500,000
— Number of lost private sector jobs that should be the focus of strategic recovery interventions.
The NYPD's fiscal year 2021 budget saw a reduction of $490 million, though this decline is likely overstated due to significant overtime overspending that is projected to reach $448 million. Furthermore, the fiscal year 2022 budget allocates $10.5 billion to the department, a $728 million increase that does not yet account for pending collective bargaining agreements.
Recommendations related to City Budget
The City must exercise diligent management of overtime spending to achieve the budgeted $434 million level for fiscal year 2022.
The City must prepare for future labor contract negotiations, as current reserves only cover a one percent raise, and higher raises will require additional resources.
The City should ensure that future collective bargaining agreements are fully reflected in the NYPD budget once ratified to avoid understating likely spending.
Key Data
$490 million
— Total planned reductions to the NYPD City-funded budget for fiscal year 2021.
$448 million
— Projected total fiscal year 2021 overtime spending for the NYPD.
$10.5 billion
— Total City funding allocated to the NYPD in the fiscal year 2022 Executive Budget.
$728 million
— Increase in fiscal year 2022 NYPD funding compared to the fiscal year 2021 budget.
$434 million
— Budgeted amount for NYPD overtime in fiscal year 2022.
67 percent
— The amount by which fiscal year 2021 overtime spending is projected to exceed the budget.
New York City's municipal workforce size is a primary driver of city spending, accounting for 52 percent of the budget in fiscal year 2020. Given projected annual budget gaps nearing $5 billion through fiscal year 2025, the city should prioritize strategic hiring and operational restructuring over increasing the total number of employees.
Recommendations related to City Budget
The City should not increase the size of its workforce.
The City should continue to reduce actual headcount, albeit more slowly, rather than reversing course to increase both actual and authorized headcount.
Current vacancies provide an opportunity to hire strategically to reallocate City workers to where they are necessary and restructure operations to prioritize efficient service delivery.
Key Data
$5 billion
— Annual budget gaps in fiscal years 2023 to 2025.
52 percent
— Portion of the City's budget spent on salaries, wages, fringe benefits, and pensions in fiscal year 2020.
319,100
— Targeted actual headcount by the end of fiscal year 2022.
$16 billion
— Infusion of federal funds the City plans to use to increase its authorized headcount.
333,107
— Authorized headcount projected by fiscal year 2025.
New York City faces a significant fiscal cliff as temporary federal COVID-related aid expires, with potential budget gaps ranging from $1.38 billion to $4.07 billion in fiscal year 2026. These figures highlight the challenge of sustaining various initiatives, including education and social programs, that were temporarily funded by federal stimulus dollars.
Key Data
$1,382 to $4,070 Million
— The potential fiscal gap for New York City in fiscal year 2026 resulting from the expiration of temporary federal COVID-related aid.
$7,629.2 Million
— The total amount of new federal COVID-related aid allocated to the New York City Department of Education between fiscal years 2021 and 2025.
$5,572.4 Million
— The total amount of new flexible ARP federal COVID-related aid allocated to various city initiatives between fiscal years 2021 and 2025.
$1,101 to $3,466 Million
— The potential fiscal gap specifically for federal COVID-related education funding in fiscal year 2026.
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
270,000—the number of two-year, four-year, and graduate degree seeking students enrolled in the City University of New York (CUNY). For generations CUNY has been an engine of economic mobility. With New York City sitting at the inflection point between the pandemic-driven recession and its recovery, CUNY will play a key…
The Fiscal Year 2022 Executive Budget fails to utilize historic federal aid and tax revenue to stabilize the City's long-term fiscal future, leaving annual budget gaps of roughly $5 billion for fiscal years 2023 through 2025. Instead of identifying recurring efficiencies or funding the Rainy Day Fund, the budget relies on non-recurring savings and increases the workforce by 5,000 staff.
Recommendations related to City Budget
The City should be implementing a regular, reasonably sized Program to Eliminate the Gap (PEG) to help prioritize programs, improve quality, and identify savings.
The City should be budgeting regular deposits into its newly established Rainy Day Fund to ensure long-term fiscal stability.
The City should identify recurring spending reductions to replace the $1 billion in annual labor savings currently carried in the budget for fiscal years 2023 through 2025.
The City should restructure spending to increase efficiency and preserve services rather than using most federal funds within two years.
Key Data
$15 billion
— The amount of additional federal aid available to the City.
$5 billion
— The estimated annual budget gap in fiscal years 2023 to 2025 when unspecified labor savings are removed.
5,000
— The number of additional staff the City plans to add, reversing recent progress in shrinking the workforce.
$1 billion
— The amount of annual labor savings carried in fiscal years 2023 through 2025 that lacks identified recurring spending reductions.
$1.6 billion
— The amount the City reversed its plan to use from the Retiree Health Benefits Trust to balance the budget.
$200 million
— The amount by which the City is increasing its general reserve in fiscal year 2022.
New York City should leverage over $15 billion in new federal resources to stabilize its long-term fiscal health by implementing a mandatory program to eliminate budget gaps, right-sizing the municipal workforce, and requiring employee contributions for health insurance premiums. These strategies would reduce cumulative budget gaps by 62 percent through fiscal year 2025 while allowing for modest salary increases and the replenishment of city reserves.
Recommendations related to City Budget
The City should implement a recurring, mandatory Program to Eliminate the Gap (PEG) to identify and implement actions to increase efficiency.
The City should require that employees and retirees share some of the cost of health insurance premiums to reduce recurring labor costs.
The City should reduce the number of unfilled vacant headcount in the budget to increase long-run fiscal stability.
The City should use federal aid wisely by spreading it over multiple years and avoiding the funding of new recurring programs with non-recurring revenues.
The City should replenish the $2.6 billion of the Retiree Health Benefits Trust Fund used in fiscal years 2020 and 2021 by fiscal year 2025.
Key Data
$15 billion
— Total new federal resources available to the City.
$6 billion
— Unrestricted American Rescue Plan (ARP) aid.
$500 million
— Annual deposits to the Rainy Day Fund (RDF) recommended in the Executive Budget.
$2.6 billion
— Amount of the Retiree Health Benefits Trust Fund (RHBT) used in fiscal years 2020 and 2021 that should be replenished.
$526 million
— Projected budget gap in fiscal year 2023 after implementing recommended strategies.
$3.1 billion
— Projected budget gap in fiscal year 2024 after implementing recommended strategies.
New York City's fiscal year 2022 preliminary budget relies on short-term strategies to close significant gaps, necessitating a prudent approach to the $5.6 billion in federal American Rescue Plan aid. Rather than funding recurring costs with one-time revenue, the city should prioritize long-term fiscal stability by implementing structural reforms and efficiency improvements.
Recommendations related to City Budget
The City should use federal funding to support COVID-19 response expenditures not covered by FEMA.
The City should use federal funding to fund additional costs and supports necessitated by the pandemic, such as expenditures related to school re-opening or test and trace efforts.
The City should use federal funding to temporarily backfill shortfalls in tax revenues due to the pandemic, appropriately with a post-federal support fiscal stability plan.
The City should use federal funding to support residents and businesses negatively affected by the pandemic and recession, to the extent resources are available and only if needed on top of American Rescue Plan investments.
The City should negotiate work rule changes with municipal unions and rationalize employee benefits to yield substantial recurring savings exceeding $1 billion per year.
Key Data
$5.6 billion
— Estimated direct federal aid from the American Rescue Plan Act of 2021.
$1.15 billion
— Additional Federal Emergency Management Agency (FEMA) reimbursement for COVID-19 related expenditures.
$5.3 billion
— Projected budget gap for fiscal year 2023.
4.3 percent
— Expected decline in property tax revenue after years of consistent growth.
$71 billion
— Loss in market value for commercial and residential property in the fiscal year 2022 tentative assessment roll.
$1 billion
— Unspecified recurring annual labor savings included in the financial plan.
The American Rescue Plan provides a historic opportunity for New York City and State to stabilize finances and restructure government operations without resorting to harmful service cuts or tax increases. By spreading federal aid over several years and implementing targeted efficiency measures, the city and state can address structural deficits and avoid future fiscal cliffs.
Recommendations related to City Budget
Federal funds should be spread over the next several years to balance budgets and provide time to restructure government.
The influx of aid should not support new programs or ongoing expenses.
The state should focus education aid on high-need districts instead of increasing funds to wealthy ones to provide significant savings.
The state should eliminate unproductive economic development programs and temporarily change financing of some capital programs.
The city must not use federal funds to reverse the progress made shrinking the workforce.
Sanitation routes could be lengthened so that trucks are filled before they are tipped.
Fire engine companies all could be staffed with four firefighters, instead of some having five, to reduce labor costs.
The 108 union-administered benefit funds could be consolidated, and employees could contribute to their health insurance to reduce labor costs.
The city should over two years phase in efficiency initiatives, totaling 3 to 5% of city-funded agency spending to reduce future budget gaps.
Key Data
$5 billion
— Projected annual budget gaps the city faces in the future.
$7 billion
— Amount the city is slated to receive from the new federal package and enhanced FEMA reimbursement.
$1 billion
— Annual labor cost reduction identified through productivity enhancements and benefit changes.
$1.9 trillion
— Total value of the federal aid package.
$25 billion
— Federal funds that will erase more than 40% of the state's pandemic-related revenue shortfall.
4%
— Projected decline in property tax revenues due to hard-hit real estate sectors.
The American Rescue Plan offers a critical opportunity to stabilize New York City and State finances by supporting pandemic-related needs and improving government efficiency. To ensure long-term fiscal health, the government must prioritize these improvements and maintain sufficient recurring revenues without increasing taxes or driving away residents and businesses.
Recommendations related to City Budget
The State and City should use federal money to support covid-related needs and spread aid over time while taking clear action to increase government efficiency.
The State and City should take care of New Yorkers’ vital needs and stabilize government finances without raising taxes.
The State and City must ensure that recurring revenues are sufficient to support critical services while not driving away residents and business.
$5.3 billion is the current estimate of the budget gap the next Mayor will have to close in her or his first year. Ben and CBC President Andrew Rein introduce listeners to CBC's mayoral candidates forum "Managing NYC’s Fiscal Crisis" that featured 10-minute conversations with each of eight candidates: Maya…
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
The proposed Intro. 2186 aims to reform New York City's land use and capital planning, but concerns exist regarding the decoupling of capital reforms from land use and the potential degradation of budget report utility. The City should maintain mayoral authority over the capital budget while ensuring that long-term strategies are aligned with comprehensive needs assessments and measurable goals.
Recommendations related to City Budget
The Ten-Year Capital Strategy should reflect how the City plans to prioritize investments given its overall needs and its financial outlook.
The Ten-Year Capital Strategy would adequately cover long-range capital planning needs if it were aligned with a comprehensive needs assessment, an assessment of affordability, guided by measurable goals and objectives as intended in the Charter.
The Mayor should retain the role of submitting a capital budget to the Council and the right to propose how to prioritize investments based on strategic planning documents, a revamped AIMS report, or a newly conducted comprehensive physical needs assessment.
The Mayor, through the Office of Management and Budget (OMB) and mayoral agencies, also should conduct and oversee the needs assessment process.
Any changes to the strategic planning process should drive towards measurable results, such as increasing capacity for appropriate as-of-right residential and commercial development, improvements in the city’s resiliency and sustainability, and advancing fair housing.
Key Data
78%
— of spending in the Preliminary Fiscal Year 2022 Ten-Year Capital Strategy is for state of good repair needs or programmatic replacement.
$92 billion
— in spending in the Preliminary Fiscal Year 2022 Ten-Year Capital Strategy is for state of good repair needs or programmatic replacement.
Early retirement incentives for municipal employees are a costly workforce reduction strategy that often fails to yield the projected savings compared to natural attrition. Given the fiscal challenges facing the city, relying on voluntary separations rather than expensive retirement incentives is a more effective approach to balancing the budget.
Recommendations related to City Budget
The City should reduce its workforce through attrition and not pursue the ERI.
If localities are considering an ERI, it is important to do a thorough analysis of the costs and benefits and commit to a strict hiring freeze.
Key Data
$110,000
— The estimated average additional pension contribution per retiree for the proposed early retirement incentive.
$90,200
— The average salary of a municipal employee retiree.
$1.1 billion
— The estimated incentive cost of the proposed early retirement program.
$5.9 billion
— The potential five-year salary savings if positions vacated by early retirement are kept vacant.
$4.3 billion
— The projected savings over five years under similar rates of voluntary separations.
7 percent
— The annual separation rate for the municipal workforce exceeding 300,000 full-time employees.
$7.4 billion is how much NYS personal income tax was paid in 2018 by residents of other states. This revenue stream may be threatened if a lawsuit over taxation of out-of-state telecommuting residents prevails. Today's guest is E.J. McMahon, adjunct fellow of the Manhattan Institute and senior fellow of the…
The Fiscal Year 2022 Preliminary Budget faces significant challenges due to the pandemic, including a historic decline in property taxes and a projected $4.3 billion gap for fiscal year 2023. To achieve long-term fiscal stability, the City must implement structural reforms, such as modifying employee benefits and improving productivity, rather than relying solely on program reductions.
Recommendations related to City Budget
The City should be taking aggressive steps now to rein in spending by increasing efficiency, prioritizing programs for the most vulnerable, and collaborating with labor to change costly work rules and reduce the cost of benefits for City workers.
Headcount reductions are needed and should be made permanent.
The City should embark on significant restructuring and spending restraint needed to stabilize its long-run finances.
Key Data
3.2 percent
— The projected increase in City-funded spending between fiscal year 2021 and fiscal year 2022.
$4.3 billion
— The projected fiscal year 2023 budget gap.
$1 billion
— The amount of labor savings that the Administration has failed to achieve, which likely understates the fiscal year 2023 gap.
New York City's total debt outstanding reached $125 billion by the end of fiscal year 2020, representing an 84 percent increase since 2005. This rising debt burden impacts the municipal budget through increased debt service costs, which consumed slightly less than 11 percent of tax revenues in fiscal year 2020.
Key Data
$125 billion
— New York City debt outstanding at the end of fiscal year 2020.
84 percent
— Growth of total New York City debt since 2005.
11 percent
— City-supported debt service costs as a share of tax revenues in fiscal year 2020.
The proposed New York City Public Housing Preservation Trust aims to raise funds to preserve 110,000 units of deeply affordable housing, but its success depends on operational flexibility and financial transparency. To ensure effectiveness, the Trust must avoid restrictive mandates on staffing and procurement while providing clear, detailed reporting on its financial performance and budget outlook.
Recommendations related to City Budget
The Trust legislation should be structured with enough flexibility so that the most cost-effective approaches and tools are available.
The Trust should publish detailed, timely data on both its past financial performance and its budget outlook, perhaps modelled after the City’s four-year financial plan and updates.
The Trust should avoid mandates that current NYCHA staff continue to operate the properties, as these provisions could make it difficult to retrain staff or modify work rules.
The Trust should be exempt from Wicks Law and the Scaffold Law, which have been demonstrated to increase the cost and complexity of public projects.
The Trust should be allowed to engage private management rather than being prohibited from doing so.
Key Data
110,000
— Number of units of deeply affordable housing the Trust aims to preserve.
New York State and City face massive combined budget gaps totaling $73.3 billion over four years, which federal aid is unlikely to fully resolve. Consequently, government leaders must urgently develop and implement credible fiscal stability plans to address these significant long-term financial shortfalls.
Recommendations related to City Budget
State and City leaders should act with urgency to develop and implement credible fiscal stability plans.
The State and City will have to implement significant actions to stabilize their finances in the long run.
The State and City will have to implement gap closing actions totaling $57 billion if federal aid relieves the same portion of these gaps as in the Great Recession.
The City will have to implement $10.6 billion in gap closing measures from now through January 2024 if additional federal aid provides a similar share of relief as the Great Recession.
Key Data
$73.3 billion
— Total State and City budget gaps over four years.
$60.1 billion
— The most recent State financial plan's four-year deficit projection.
$13.2 billion
— The November 2020 Financial Plan's projected four-year gap for New York City.
$4.8 billion
— The adjusted gap for fiscal year 2022 that must be closed by the release of the Preliminary Budget in January 2021.
$10.6 billion
— The amount of gap closing measures the City would have to implement through January 2024 if federal aid provides a similar share of relief as the Great Recession.
$57 billion
— The total gap closing actions the State and City would have to implement if federal aid relieves the same portion of budget gaps as in the Great Recession.
The November 2020 Financial Plan relies heavily on non-recurring debt service savings and includes $1 billion in unachieved labor savings, failing to address the city's long-term fiscal crisis. To close the projected $3.8 billion budget gap for fiscal year 2022, the city must identify recurring savings, reduce headcount through attrition, and align employee benefit contributions with other public agencies.
Recommendations related to City Budget
The Mayor should immediately ask each agency to identify significant recurring savings, with a focus on improving long run efficiency, for potential inclusion in the Preliminary Budget.
Attrition and the hiring freeze should be used to reduce the City’s headcount over the full term of the four-year financial plan.
The City should continue to work with labor to identify efficiencies and align employee benefit contributions to those of other public agencies.
Key Data
60 percent
— of the annual savings in the November 2020 Financial Plan do not recur.
0.35 percent
— of City-funded spending represented by the fiscal year 2023 savings.
$1 billion
— in annual labor savings in fiscal years 2022 to 2024 that the administration has made no progress achieving.
$3.8 billion
— fiscal year 2022 budget gap that the City needs to close in the Preliminary Budget.
The November budget modification process requires aggressive management to control spending and prepare for economic risks, rather than serving as a mere technical adjustment. City officials must prioritize identifying recurring savings, removing unfeasible future savings from the financial plan, and providing transparent accounting for pandemic-related expenditures and federal reimbursements.
Recommendations related to City Budget
Agencies should be tasked with identifying savings, especially recurring savings that improve the efficiency of government and provide multi-year budget relief.
Savings in future years that are not based on a feasible plan should be removed from the financial plan.
The City should provide a detailed accounting of both response costs and core services, such as education, that may cost more during the pandemic.
Unfilled positions should be removed from the financial plan.
The City should identify how much of this spending it expects to be reimbursed by the federal government; unreimbursed costs will increase the budget gap.
Key Data
$302 million
— City tax revenue collections in the first two months of fiscal year 2021 exceeded the Adopted Budget forecast by $302 million (1.8 percent).
$63 billion
— The City collected $63 billion in tax revenue in fiscal year 2020, $1 billion more than projected in June 2020.
$2.2 billion
— The City has already committed to spending $2.2 billion on COVID-19-related expenditures in fiscal year 2021.
$633 million
— The City and some municipal unions agreed to shift a combined $633 million in expenses from fiscal year 2021 to fiscal year 2022.
$927 million
— The Adopted Budget projected overtime spending of $927 million, roughly half of the actual overtime spending in fiscal year 2020.
324,036
— Year-end fiscal year 2020 headcount was 324,036 full-time and full-time equivalent employees.
The COVID-19 pandemic significantly impacted New York City's public services, leading to curtailed inspections, increased demand for social services, and a slowdown in capital projects. The city's response highlights the need for more robust performance metrics and flexible resource allocation, as current reporting often fails to capture the full effectiveness and efficiency of city services.
Recommendations related to City Budget
The City must orient the structure of the Fire Department and its allocation of resources away from firefighting toward medical response.
The Department of Sanitation needs sufficiently flexible routing and work rules to allow for the quick redeployment of resources to address rapid changes in waste generation patterns.
The City should prioritize resident feedback surveys to collect high-quality data on key quality of life indicators.
The City must implement robust performance metrics to foster a better understanding of the effectiveness and efficiency of public services.
Key Data
$1.5 billion
— Capital expenditures in the fourth quarter of fiscal year 2020, the lowest in a decade.
9.3 tons
— The low reached for refuse collected per truck shift in fiscal year 2020.
5,841
— The average number of individuals in custody in fiscal year 2020.
15,124
— Complaints about missed garbage collection in the first quarter of fiscal year 2021.
$761 million
— Capital commitments for Housing New York projects in fiscal year 2020.
10.7 tons
— The contractual target for refuse collected per truck shift.
New York City's fiscal year 2021 budget totals $92.8 billion, with agency spending projected to decline by $1.5 billion across 28 agencies while increasing by $652 million at 48 others. To address a projected $4.2 billion budget gap in fiscal year 2022, the city must implement additional savings programs that secure recurring revenue while maintaining critical services.
Recommendations related to City Budget
The City will likely need to implement additional savings programs in fiscal year 2021 to manage budgetary risks.
The City must identify savings to close the $4.2 billion gap in fiscal year 2022.
The next round of cuts should aim to secure recurring savings to ensure long-term fiscal stability.
Future budget adjustments should prioritize the need to provide critical services to those most in need.
Budgetary decisions must be made with the goal to maintain the City’s competitiveness.
Key Data
$92.8 billion
— Total New York City Fiscal Year 2021 Budget when adjusted for the use of prior year resources and reserves.
$4.2 billion
— Projected budget gap in fiscal year 2022 that the City will need to identify savings to close.
$1.5 billion
— Total year-over-year spending decline projected across 28 city agencies.
$652 million
— Total year-over-year spending increase projected across 48 city agencies.
$266 million
— Projected increase in the City’s subsidy to New York City Health and Hospitals (H+H).
$102 million
— City-funded increase at the Fire Department (FDNY) stemming partly from one-time federal funding.
New York City faces a fiscal crisis where borrowing or mass layoffs are presented as the primary options, though alternative strategies like agency efficiency, attrition, and labor-management reforms could stabilize finances. Implementing a multiyear fiscal plan overseen by the Financial Control Board would ensure that any necessary borrowing serves as a temporary bridge rather than a permanent solution to unaffordable spending.
Recommendations related to City Budget
Commissioners should comb their agencies to increase efficiency of city services, or reduce spending on lower priorities.
The city should use attrition and a stricter hiring freeze to reduce the workforce by 7,000 employees a year.
The administration should reinvigorate the labor-management committee to reduce health insurance spending.
If borrowing becomes justified, authorization should come with significant conditions and oversight.
The city should produce and implement a multiyear plan that will lead to fiscal stability.
The Financial Control Board should certify and oversee the plan and borrowing, reestablishing a control period.
Key Data
22,000
— Number of city workers the mayor warns may face layoffs if the Legislature does not authorize borrowing.
$1 Billion
— Amount of labor savings committed to in the budget that have not been identified.
7,000
— Number of employees the city could reduce per year through a stricter hiring freeze.
$2 Billion
— Amount by which the current city budget, adjusted for inflation, is higher than what the city spent in 2018.
14,000
— Number of additional workers the city has compared to the highest point before the last recession.
$5 Billion
— Hypothetical amount the city might borrow.
New York City faces a fiscal crisis with potential revenue shortfalls, making borrowing to balance the fiscal year 2021 budget an inadvisable strategy that would burden future budgets and diminish financial management. Any authorization for such borrowing should be treated as a last resort, contingent upon strict conditions including the implementation of budget savings and oversight by the Financial Control Board.
Recommendations related to City Budget
New York City should not borrow now in order to balance the fiscal year 2021 budget.
The City should implement all savings included in this year’s adopted budget and identify and implement an equal or greater amount of savings in future years.
The amount authorized for borrowing should be limited to what is needed to address additional revenue shortfalls in the near term that are not supported by new federal aid.
Borrowing should be part of a comprehensive and feasible multiyear plan that leads to fiscal stability, as certified by the Financial Control Board (FCB) or that meets criteria defined in law.
A control period should be established during which the FCB is required to approve and empowered to condition each instance of borrowing, closely monitor the City’s fiscal management, and approve or reject City actions that have major fiscal impacts.
New York City should avoid borrowing to balance the fiscal year 2021 budget and instead prioritize implementing all planned savings. Any necessary borrowing must be limited to addressing additional revenue shortfalls and requires a comprehensive fiscal stability plan overseen by the Financial Control Board.
Recommendations related to City Budget
The City should implement all the savings included in this year’s adopted budget and more in the future.
Borrowing should only be authorized for the amount needed to address additional revenue shortfalls.
No borrowing should happen without a comprehensive and feasible plan that leads to fiscal stability.
Borrowing must be accompanied by certification, monitoring, and approval of major actions by the Financial Control Board.
New York City faces a significant fiscal crisis, requiring $1 billion in recurring labor savings to avoid widespread layoffs. To achieve this, the city should implement structural reforms to employee benefits, such as health insurance premium sharing and welfare fund consolidation, alongside productivity improvements like overtime caps and flexible staffing models.
Recommendations related to City Budget
The City should implement health insurance premium sharing for employees and retirees to bring benefits in line with other public employers.
City leaders should work with the Municipal Labor Committee to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the Variable Supplement Funds and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund for the Tax-Deferred Annuity should be sharply reduced through State legislation.
The City should extend overtime caps to skilled trades and uniformed employees to reduce costs.
City leaders should increase job assignment flexibility to allow managers to deploy staff more effectively.
The City should standardize work hours to a forty-hour work week for all employees.
The City should eliminate the Absent Teacher Reserve as a permanent, paid assignment.
The City should standardize four firefighters as the staffing level for engine companies.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
Key Data
$1 billion
— Recurring savings target from negotiations with labor unions in the Adopted Budget for Fiscal Year 2021.
$1.2 billion
— Estimated annual value of the taxpayer-provided guarantee for the Tax-Deferred Annuity.
$1.3 billion
— Projected City payments to welfare funds in fiscal year 2020.
$1.1 billion
— Uniformed-agency overtime cost in fiscal year 2019.
$124 million
— City contributions to union annuity funds in fiscal year 2020.
$50.2 billion
— Projected personnel costs for fiscal year 2021.
New York City faces a fiscal crisis requiring $1 billion in recurring labor savings to avoid layoffs, which can be achieved through benefit rationalization and productivity improvements. Key strategies include implementing health insurance premium sharing, consolidating union welfare funds, and reforming work rules like overtime caps and staffing models.
Recommendations related to City Budget
The City should implement health insurance premium sharing for active employees and retirees to align benefits with other public and private employers.
City leaders should consolidate union welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate Variable Supplement Funds and transfer the assets to the main pension funds.
The City should extend the overtime cap to skilled trades and uniformed employees to reduce excessive overtime costs.
The City should standardize staffing to four firefighters per engine company to improve operational efficiency.
Key Data
$1 billion
— Recurring savings target from labor negotiations in the Adopted Budget for Fiscal Year 2021.
$50.2 billion
— Projected personnel costs in fiscal year 2021 out of a $93.5 billion total budget.
$1.1 billion
— Uniformed overtime spending in fiscal year 2019.
$1.2 billion
— Estimated annual value of the taxpayer-provided guarantee for the tax-deferred annuity (TDA) program.
$2.2 billion
— Annual cost of pre-Medicare retiree health benefits in fiscal year 2020.
$1.3 billion
— Projected City payments to union-administered welfare funds in fiscal year 2020.
The New York City Police Department's budget for fiscal year 2021 was reduced by $474 million compared to the Executive Budget, though this figure relies heavily on unrealistic one-time savings rather than structural changes. While the operating budget decreased by $345 million, the recurring reduction is only $82 million, primarily achieved through headcount reductions like cancelling the July Police Academy Class.
Key Data
$474 million
— The total reduction in the NYPD's City-funded budget when measured against the Executive Budget for Fiscal Year 2021.
$354 million
— The portion of the budget reduction attributed to overtime expenses, representing 75 percent of the total cut.
$82 million
— The recurring annual reduction to the operating budget, primarily achieved through hiring reductions.
$345 million
— The decrease in the NYPD's operating budget from fiscal year 2020 to fiscal year 2021.
1,404
— The total number of positions by which the NYPD workforce was reduced in fiscal year 2021.
6.6 percent
— The percentage decrease in the NYPD's operating budget from fiscal year 2020 to fiscal year 2021.
The fiscal year 2021 budget for New York City relies heavily on one-time reserves and federal aid to close significant gaps, leaving the city vulnerable to future financial instability. To ensure long-term fiscal health, the city must move beyond short-term fixes by conducting a thorough review of agency operations, reducing the workforce through attrition, and implementing recurring labor savings.
Recommendations related to City Budget
The City should undertake a thorough review of agency programs and operations to identify recurring savings, reduce the City’s workforce through attrition, and implement recurring labor savings.
The City should implement a package that consolidates union welfare funds, phases in employee health insurance premium contributions, changes work rules to improve productivity, and shrinks the workforce through attrition to generate necessary savings.
The City should not turn to long-term borrowing to address an imbalance in revenues and expenditures, as borrowing should be a last resort.
The City should prioritize shrinking the workforce through attrition, which is both possible and preferable to layoffs.
The City should ensure that labor savings are a part of the City’s budget balancing efforts.
Key Data
$88.2 billion
— The total budget adopted by New York City for fiscal year 2021.
$10.4 billion
— The size of the budget gap opened in fiscal years 2020 and 2021 due to tax revenue shortfalls and decreased state aid.
$1 billion
— The amount of recurring savings the budget includes to be negotiated with the City’s municipal labor unions.
$4 billion
— The amount of reserve funds and Retiree Health Benefits Trust Fund assets used to close budget gaps in fiscal years 2020 and 2021.
22,000
— The number of municipal workers the Mayor stated could be laid off if the $1 billion labor savings target is not met.
$105 billion
— The City’s total liability for retiree benefits, known as other postemployment benefits (OPEB).
$1 billion is the target reduction in the NYPD budget that became the focal point of recent budget negotiations. Was this cut actually made in the NYC Adopted FY2021 Budget? CBC's Adrian Pietrzak and Ana Champeny discuss the NYPD's budget and how it's going to change in the coming year…
New York City adopted an $88.2 billion budget for fiscal year 2021, which relies on achieving $1 billion in labor savings and $350 million in police overtime reductions to maintain flat city-funded spending. Successfully managing these necessary changes is critical to avoiding potential layoffs of 22,000 municipal employees.
Recommendations related to City Budget
The City should utilize attrition, increased productivity, and negotiated fringe benefit changes to achieve necessary budget savings without resorting to layoffs.
City leaders must prioritize negotiating and managing the changes necessary to achieve the assumed savings in the adopted budget.
Key Data
$88.2 billion
— Adopted budget for New York City for fiscal year 2021.
$1 billion
— Recurring savings target the City aims to negotiate with municipal labor unions.
$350 million
— Reduction in overtime at the New York City Police Department approved as part of agency savings programs.
22,000
— Number of employees who may face layoffs if the City fails to reach its labor savings target.
0.1 percent
— Growth in adjusted city-funded spending in fiscal year 2021.
$92.8 billion
— Size of the total budget in fiscal year 2021, adjusted for prepayments and withdrawals from the Retiree Health Benefits Trust.
$88.2 billion is the size of the NYC budget adopted for FY 2021. After years of economic expansion, this is the first budget Mayor de Blasio and Speaker Johnson negotiated in a recession. CBC's Ana Champeny joined the podcast to discuss why this is just the first of many tough…
New York City's fiscal year 2021 budget relies on questionable savings and optimistic assumptions, leaving the city vulnerable to large budget gaps in future years. Without implementing recurring efficiency savings and aggressive attrition, the city faces the risk of significant service reductions and layoffs.
Recommendations related to City Budget
City leaders should sharpen their pencils and focus their management on actions that reduce the yawning multiyear budget gaps presented by the fiscal crisis.
The City must implement a program of recurring efficiency savings and aggressive attrition to avoid drastic service reductions and layoffs.
The City needs to provide specificity on the actions needed to produce the projected $1 billion in savings from labor collaboration.
Key Data
$300 million
— The amount by which the budget aims to reduce police overtime, which is considered highly unlikely given the history of overtime management.
$1 billion
— The amount of savings the budget expects to produce from working with municipal labor unions, for which there is currently a concerning lack of specific action plans.
New York City and State face significant budget gaps, with the City confronting potential shortfalls of $1.6 billion and $6.9 billion in fiscal years 2021 and 2022. To address these fiscal challenges, policymakers must prioritize controlling expenditures and advocating for federal aid while considering the negative impact that high tax rates have on economic competitiveness and the retention of high-income earners.
Recommendations related to City Budget
Improving the fiscal outlook for both the State and the City primarily requires controlling expenditures and advocating for federal aid.
Any consideration of tax increases should include the impact on State and local economic competitiveness.
As New York’s leaders look to close budget gaps, they must be cognizant that combined State and City PIT rates are the second highest in the nation, while combined CFT rates are the highest.
Key Data
$1.6 billion
— Potential budget gap for New York City in fiscal year 2021.
$6.9 billion
— Potential budget gap for New York City in fiscal year 2022.
16.49%
— The sum of the State effective tax rate, City rate, and MTA taxes on businesses operating in New York City.
12.696%
— The top personal income tax rate imposed in New York City.
$1.4 billion
— The amount tax revenues could have been higher if New York’s share of national millionaire capital gains had remained at 2010 levels.
40%
— The portion of personal income tax revenues coming from millionaires in New York.
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…
In fiscal year 2020, New York City allocated $10.9 billion to the NYPD, with $5.6 billion designated for the operating budget and $5.3 billion for centrally allocated costs like pensions and fringe benefits. This spending supports a workforce of 54,003 employees, where the average full-time pay reached $96,072 in fiscal year 2019.
Key Data
$10.9 billion
— Total expenses allocated to the New York City Police Department in fiscal year 2020.
$635 million
— Total overtime spending by the NYPD in fiscal year 2020.
54,003
— Total number of NYPD employees in fiscal year 2020.
$96,072
— Average total pay for a full-time NYPD employee in fiscal year 2019.
$5.6 billion
— The NYPD operating budget for fiscal year 2020.
$2.8 billion
— The amount allocated for NYPD pensions in fiscal year 2020.
New York City faces multi-billion dollar budget gaps in its four-year financial plan due to the economic disruption caused by the COVID-19 pandemic. To balance the budget, the city should implement strategies such as expenditure reductions, headcount attrition, health insurance premium-sharing, and a temporary property tax increase.
Recommendations related to City Budget
Implementing a health insurance premium-sharing arrangement would provide significant recurring savings while ensuring the City continues to provide attractive benefits.
The City should resume study of and implement a volume-based fee for refuse; such fees have been shown to reduce waste generation by households as the cost of disposing of one's waste becomes more immediately felt.
The City should assess the possibility of selling parking lots and underutilized buildings with the aim of generating $50 million in fiscal years 2021 and $100 million each in fiscal years 2022 and 2023.
The current budgeted general reserve of $1 billion should be reduced to $250 million, releasing $750 million per year for gap closing.
Centralizing procurement at the Department of Citywide Administrative Services could save about $80 million, assuming a 5 percent reduction in contract costs.
The City could reduce headcount by 9,000 and still remain above the fiscal year 2008 peak.
Key Data
$6.9 billion
— Projected budget gap for fiscal year 2022, including identified risks.
$1.5 billion
— Reductions to the fiscal year 2021 tax revenue forecast identified in the annual revenue letter.
$700 million
— Annual savings from implementing a health insurance premium-sharing arrangement for employees.
$134 million
— Reductions to non-tax City revenues, mainly from fines and forfeitures.
$259 million
— Required increase in pension contributions in fiscal year 2022 if pension funds suffer a 10 percent decline.
The proposed legislation to establish a Rainy Day Fund for New York City lacks necessary safeguards, potentially allowing the fund to be used as a slush fund rather than a reserve for emergencies. To ensure fiscal responsibility, the law should strictly limit withdrawals to periods of economic recession or severe emergency, defined by specific economic and fiscal indicators.
Recommendations related to City Budget
Any withdrawal from the Rainy Day Fund should be limited only to times of economic recession or severe emergency, which should be defined in law.
A recession should be defined as two successive quarters of economic contraction as indicated by declines in real gross city product or employment.
A severe emergency should be specified as being accompanied by revenue losses or increased expenditures of at least one percent of city-funded spending.
The Governor should negotiate a chapter amendment with bill sponsors and legislative leaders to require that any withdrawal be limited only to times of economic recession or severe emergency, as defined in law based on economic and fiscal indicators.
Key Data
50 percent
— The maximum portion of the Rainy Day Fund balance that can be withdrawn to balance the budget without additional explanation.
one percent
— The minimum threshold of revenue losses or increased expenditures required to define a severe emergency for the Rainy Day Fund.
two
— The number of successive quarters of economic contraction required to define a recession for the purpose of Rainy Day Fund withdrawals.
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,…
The Economic Development Corporation faces significant financial strain due to the high costs of operating the NYC Ferry system, which has led to an operating loss and reduced the agency's ability to contribute to the city's general fund. To address these fiscal pressures, the agency must continue to identify efficiencies, such as implementing dynamic fare pricing and delaying costly expansions, to maintain its core operations.
Recommendations related to City Budget
The Economic Development Corporation should continue to identify ways to make its ferry operations more efficient, such as implementing dynamic fare pricing and delaying the launch of costly planned expansions.
The ferry system should charge higher fares on weekends and for noncommuters to generate additional recurring savings.
The city should not run or expand ferry routes to Coney Island and Ferry Point that will require extraordinarily high subsidies.
All city agencies should scrutinize their operations to find efficiencies and redesign or eliminate programs that are not cost-effective.
Key Data
$53 million
— amount spent to subsidize NYC Ferry in 2019, the first full year of operations for the six initial routes.
$9.34
— subsidy per ferry ride.
$10 million
— estimated reduction in operating costs in fiscal year 2021 from service changes.
$1.8 million
— operating loss recorded by the Economic Development Corporation in 2019.
$384.2 million
— total operating expenses for the Economic Development Corporation in 2019.
$382.7 million
— total operating revenue for the Economic Development Corporation in 2019.
Proposed state legislation would allow New York City to establish a Rainy Day Fund, but the current bill lacks essential restrictions to prevent the funds from being spent at the discretion of the Mayor and City Council. To ensure the fund is preserved for true crises, withdrawals should be legally limited to times of economic recession or severe emergency.
Recommendations related to City Budget
The state legislature should amend bill S.8400/A.9789A to add essential restrictions on the use of the Rainy Day Fund.
For resources to constitute a true Rainy Day Fund, any withdrawal should be limited only to times of economic recession or severe emergency, as defined in law based on economic and fiscal indicators.
Without an amendment to restrict withdrawals, the bill S.8400/A.9789A should be held.
New York City faces a $7.4 billion tax revenue shortfall, yet the city has only implemented 2.1 percent in spending cuts for fiscal year 2021 while planning to increase its workforce. State legislators should reject proposed legislation that would allow the city to issue long-term debt for operating expenses until all other budget-balancing options are exhausted.
Recommendations related to City Budget
The State Legislature should reject S.8418/A.10520, which would permit the City of New York to issue long-term debt to pay for operating expenses and offset revenue losses.
City leaders must take sufficient action to reduce expenditures before borrowing for operations is considered.
The State Legislature should not consider granting borrowing authority until the City has exhausted options for balancing the budget that do not irreparably harm today’s New Yorkers.
Borrowing should only be used as a last resort after other actions are exhausted and federal aid proves insufficient.
Key Data
$7.4 billion
— Tax revenue shortfall over two fiscal years.
2.1 percent
— Spending cuts of city-funded spending in fiscal year 2021.
New York faces acute fiscal stress due to the pandemic, requiring a balanced approach to budget management that prioritizes minimizing harm to residents and maintaining long-term economic competitiveness. Officials are advised to utilize reserves cautiously, avoid inequitable cost-shifting, and refrain from long-term borrowing for operations to uphold the principle of intergenerational equity.
Recommendations related to City Budget
Governments should use no more than two-thirds of any rainy day fund in the first year to ensure resources remain available if difficult times continue.
State and local leaders should avoid shifting costs in a manner that inappropriately burdens local jurisdictions for services that should be financed from the broadest possible tax base.
Public officials should avoid long-term borrowing for operations because it violates the principle of intergenerational equity by requiring future taxpayers to pay for services consumed by current residents.
Governments should avoid extending bonds beyond a period of useful life or making debt service unequal among cohorts of residents, as this is inequitable.
When considering tax increases, officials should target rate increases in a highly progressive way to moderate the burden on individual incomes during periods of economic stress.
Key Data
$100 million
— Amount of capital spending avoided that saves about $6.5 million annually in debt service.
$6.5 million
— Annual debt service savings achieved by avoiding $100 million in capital spending.
two-thirds
— Maximum portion of any rainy day fund recommended for use in the first year of a fiscal crisis.
$7.4 billion -- the two-year tax revenue shortfall for the City of New York revealed when Mayor Bill de Blasio released the Executive Budget for Fiscal Year 2021 last month. In this episode we hear from the person who will help guide NYC through one of its greatest fiscal challenges,…
The City's fiscal year 2021 executive budget relies heavily on non-recurring resources like reserves and federal aid to cover spending, creating a precarious financial situation. With significant budget gaps projected for fiscal years 2022 through 2024, the administration faces a looming fiscal challenge that requires long-term solutions beyond current short-term fixes.
Recommendations related to City Budget
The City will need to address significant outyear gaps while operating with fewer reserves.
Given the precarious fiscal situation and limited general reserves, additional spending cuts may be needed to hedge against risks like lower-than-expected federal aid or tax revenues.
Key Data
$5 billion
— Projected budget gap for fiscal year 2022.
$4.5 billion
— Projected budget gap for fiscal year 2023.
$4.9 billion
— Projected budget gap for fiscal year 2024.
$100 million
— Amount in the general reserve to hedge against fiscal risks.
8.3%
— As-presented decrease in spending in fiscal year 2021.
6.3%
— Projected increase in the total budget in fiscal year 2020.
The Fiscal Year 2021 Executive Budget relies on short-term strategies like diverting $4 billion from reserves and the Retiree Health Benefits Trust, which fails to provide the recurring savings needed to address the looming $5.0 billion gap in fiscal year 2022. To better prepare for the economic downturn, the City must implement a larger, more sustainable savings program that identifies non-core services and efficiencies in agency operations rather than relying on temporary underspending.
Recommendations related to City Budget
The City should implement a larger savings program with more recurring value to address the fiscal crisis over multiple years.
Working with its labor partners, the City should identify non-core services and subsidies to reduce or suspend while seeking additional efficiencies in agency operations, employee benefits, contracts, leased space, and fleet operations.
Spending reductions should be focused on paring down to efficiently provide core needed services to strengthen the City's ability to weather the economic downturn.
Key Data
$2.7 billion
— The total value of the two-year savings program, which represents less than 2 percent of the budget.
$2.6 billion
— The amount diverted from the Retiree Health Benefits Trust (RHBT) to balance the budget.
$1.4 billion
— The amount of other reserves used to balance the budget.
$5.0 billion
— The projected budget gap for fiscal year 2022.
7.4 percent
— The assumed rate of tax revenue growth for fiscal year 2022.
New York City faces significant economic uncertainty and needs a well-designed Rainy Day Fund to protect against future recessions and emergencies, as current reserves of $1.25 billion are insufficient to cover potential shortfalls. To ensure fiscal stability, the City should implement mandatory deposits based on tax revenue growth and establish strict rules for fund withdrawals and usage.
Recommendations related to City Budget
The RDF exception should specify that the only two permissible uses for an RDF are a recession or severe emergency.
State law should define a recession as two successive quarters of economic decline as indicated by private employment or gross city product.
An emergency should be defined as severe when it is accompanied by a revenue shortfall or expenditure increase equal to or greater than 1 percent of the budget.
Withdrawals from the RDF should be limited to no more than two-thirds of the fund balance in any year to ensure funds are available for the second year of a recession or emergency.
Mandatory deposits should be equal to 75 percent of the tax revenue growth above 3 percent to ensure sufficient funds are accumulated.
The City should adopt a target size of 17.2 percent of tax revenue for the RDF, which can serve as a cap on the size of the fund.
Key Data
$1.25 billion
— Reserves set aside by New York City for the upcoming year, which is less than one-quarter of the estimated near-term revenue loss.
$6 billion
— Near-term revenue loss estimated by the Office of the New York City Comptroller.
$20 billion
— Three-year shortfall estimated if a recession occurs that is similar to those in the recent past.
$9 billion
— Amount the City would have netted in reserves if the recommended strategy had been followed over the last 10 years.
1 percent
— Threshold for a revenue shortfall or expenditure increase to define a severe emergency.
17.2 percent
— Recommended target size of the Rainy Day Fund as a percentage of tax revenue, which can serve as a cap on the fund's size.
New York City faces a significant fiscal challenge due to the pandemic, requiring a more aggressive approach to budget savings than the currently proposed $1.3 billion target. To ensure fiscal stability and preserve essential services, the city must control non-critical spending and implement a more ambitious $3 billion savings plan focused on operational efficiency.
Recommendations related to City Budget
The City should control all non-critical spending in the current year and increase the target size of next year’s savings program to $3 billion.
Agencies should be charged with generating a menu of options for spending reductions that are rooted in improving efficiency, streamlining operations, and supporting more cost-effective operations.
The City will have to update its fiscal management strategy, work with municipal unions on workforce savings, and potentially enact more far-reaching measures, such as hiring freezes, layoffs, or service cuts.
The savings plan should be significantly larger and explicitly focused on generating recurring savings in spending.
Key Data
$1.3 billion
— The target for the savings program announced for the Executive Budget for Fiscal Year 2021.
$20 billion
— Potential revenue shortfalls over three fiscal years resulting from a recession similar to prior ones.
$6 billion
— Estimated revenue shortfall in fiscal years 2020 and 2021.
0.66 percent
— The amount of city-funded spending represented by the two-year savings presented in the Executive Budget for Fiscal Year 2020.
0.91 percent
— The amount of city-funded spending represented by the $1.3 billion target announced for the Executive Budget for Fiscal Year 2021.
0.23 percent
— The average amount of efficiency savings previously achieved relative to City-funded spending.
NYCHA's 2020 operating budget projects revenues exceeding $3.7 billion, yet the agency faces significant challenges including a declining rent collection rate that cost nearly $110 million in fiscal year 2019. Rising labor costs and an increasing reliance on City subsidies threaten long-term fiscal stability, necessitating a turnaround plan that prioritizes sustainable labor settlements and improved operational accountability.
Recommendations related to City Budget
NYCHA’s fiscal stability depends on future settlements being financially sustainable and providing enough flexibility for NYCHA to implement its turnaround plan.
NYCHA’s forthcoming organizational plan must include a program to boost the rent collection rate and maintain it going forward.
Devolving budgeting and accountability to the property level could improve collections but it will depend on property managers’ ability to implement changes and meaningfully improve tenants’ quality of life.
Stabilizing its fiscal outlook must be front and center in these discussions regarding the Housing Authority's buildings and operations.
Key Data
$3.7 billion
— Projected operating revenues for NYCHA in 2020.
$91 million
— Projected surplus for NYCHA in 2020.
$1.2 billion
— Amount of the budget allocated for the Section 8 rental housing voucher program.
89.6%
— NYCHA's rent collection rate in 2019, down from 94.9% in 2016.
$110 million
— Amount of tenant rent and arrears NYCHA failed to collect in fiscal year 2019.
$1,052
— NYCHA's self-reported management cost per unit per month in fiscal year 2019.
The Citywide Savings Program, which identifies cost-saving initiatives for New York City's budget, relies heavily on routine budget adjustments rather than structural efficiency improvements. Achieving just 1% in annual efficiency savings since fiscal year 2016 would have reduced the fiscal year 2021 budget by $2 billion, highlighting the need for more substantial, recurring cost-saving measures.
Recommendations related to City Budget
The Citywide Savings Program should include greater efficiency savings to reduce spending without reducing services.
The administration should prioritize changes to agency practices to reduce spending rather than relying on routine budget adjustments like re-estimates or funding shifts.
Key Data
$2,360 million
— Total five-year savings identified by the FY2021 Citywide Savings Program.
0.6%
— Percentage of city-funded spending represented by the FY2021 Citywide Savings Program over five years.
33%
— Portion of the FY2021 Citywide Savings Program comprised of efficiency savings.
0.23%
— Average efficiency savings as a percentage of city-funded spending between FY2016 and FY2021.
$2 billion
— Amount the FY2021 budget would have been reduced by if 1% efficiency savings were achieved annually since FY2016.
New York City and State face significant potential revenue shortfalls of up to $34 billion and $20 billion respectively in the event of a recession, yet currently hold only a small fraction of these amounts in reserve. To improve fiscal preparedness, leaders should prioritize spending restraint, reallocate school aid from wealthy districts, and commit to placing all surplus revenue into rainy day funds.
Recommendations related to City Budget
State leaders should close state budget gaps by restraining recurring spending without tax increases or fiscal gimmicks.
The state should stop increasing school aid to wealthy districts and put away those funds to protect New Yorkers in the future.
The mayor should immediately ask agencies to develop plans for productivity-based savings totaling 1% or more of city-funded expenditures.
The City Council should identify savings and not add funds to support new or expanded programs in the budget.
The State must pass legislation enabling the use of the rainy day fund, ensuring it is only used during an economic recession or severe emergency.
Key Data
$34 billion
— Estimated three-year revenue shortfall for New York State in the event of an average recession.
$15-20 billion
— Estimated three-year revenue shortfall for New York City in the event of an average recession.
6-16%
— Percentage of the potential revenue shortfall that the city and state currently have in reserve.
$700 million
— Amount of revenue the state has already identified above current projections.
1%
— Target for productivity-based savings of city-funded expenditures that agencies should be asked to develop.
The New York City Housing Authority manages 173,762 public housing units for 381,159 residents, operating on a $2.6 billion annual budget with a $3.2 billion capital budget. Despite the $15.8 billion NYCHA 2.0 plan, the agency faces $31.8 billion in five-year capital needs, leaving an $8.4 billion funding gap.
Key Data
$2.6b
— Total annual operating revenue and expenses for the New York City Housing Authority.
$3.2b
— Total capital budget for the New York City Housing Authority in calendar year 2020.
173,762
— Number of public housing units under management by the New York City Housing Authority.
381,159
— Number of authorized residents living in New York City public housing.
$31.8 billion
— Five-year capital needs for the New York City Housing Authority.
$8.4 billion
— Unmet funding need within the $15.8 billion NYCHA 2.0 plan.
New York City's budget grew from $72.8 billion in fiscal year 2014 to $92.0 billion in fiscal year 2019, driven by new programs, expanded services, and rising costs for contracts and personnel. Prioritizing spending restraint is essential to ensure the city can manage future economic downturns without resorting to drastic service cuts or tax increases.
Recommendations related to City Budget
Understanding how policy, management choices, and external factors drive budget growth is essential to efforts to restrain spending.
Spending restraint should be a greater priority in the upcoming budget season.
Managing the factors that have led to rapid spending growth, such as the rising cost of contracts, overtime, or headcount growth, could help reduce the City’s need to take drastic actions when the inevitable downturn occurs.
Key Data
$92.0 billion
— Total City expenditures in fiscal year 2019, representing a $19 billion increase from fiscal year 2014.
4.8 percent
— Average annual growth rate of the New York City budget during Mayor Bill de Blasio’s first five years in office.
$1.0 billion
— Cost of the Universal Pre-Kindergarten program in fiscal year 2019, accounting for 3.7 percent of the Department of Education’s budget.
$1.8 billion
— Total overtime spending in fiscal year 2019, which grew at an average rate of 4.4 percent since fiscal year 2014.
$17.1 billion
— Spending on contractual services in fiscal year 2019, which increased at an average rate of 11.2 percent per year since fiscal year 2014.
$166 million
— Total projected spending on the Universal Access Law in fiscal year 2022, combining new anti-eviction legal services with existing programs.
7 days since the start of budget season, which commenced this year with the New York City Preliminary Budget released on January 16th. The State Budget, released just yesterday, may have a significant impact on the City’s finances this year: with the State facing a large budget gap, the Executive…
The fiscal year 2021 preliminary budget limits new spending programs, with city-funded spending growth projected to slow to 1.7 percent, though it fails to adequately prepare for potential economic risks or state aid cuts. Despite the recent voter approval of a rainy day fund, the budget lacks additional reserve contributions and requires greater agency efficiency to manage fiscal challenges.
Recommendations related to City Budget
The City must undertake greater agency efforts to increase efficiency.
The City should exercise greater spending restraint to bolster its fiscal position.
The City Council should follow the Mayor’s lead in holding the line on new spending initiatives.
The City should ensure that new revenues are deposited in the City’s reserves.
Key Data
6%
— Annual city-funded spending growth in fiscal years 2018 and 2019.
4.0%
— Projected city-funded spending growth in fiscal year 2020.
1.7%
— Projected city-funded spending growth in fiscal year 2021.
0.4%
— Fiscal year 2021 savings as a percentage of city-funded expenditures.
$1.5 billion to $2.0 billion
— Amount added to the budget between the Preliminary and Adopted budgets over the last two years.
The Metropolitan Transportation Authority's Access-A-Ride program faces significant financial growth, with total operating costs projected to rise from $537 million in 2018 to $691 million by 2023. To address these rising costs and the resulting financial strain on the City, potential solutions include increasing passenger fare contributions and limiting the number of on-demand for-hire vehicle trips.
Recommendations related to City Budget
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
$691 million
— Projected total operating costs for the Access-A-Ride program in 2023.
$361 million
— Cumulative cost increase to the City from 2020 to 2023 under the MTA's proposed formula change.
4 percent
— The portion of the program's total operating cost covered by fare revenue.
$86
— The 2018 per trip cost for a primary service ride.
$29
— The 2018 per trip cost for an advance reservation trip.
$37
— The 2018 per trip cost for an on-demand trip.
New York City Health + Hospitals faces a significant annual operating deficit of nearly $3 billion, largely driven by outpatient services and insufficient Medicaid reimbursement rates. To address this, the City should implement performance-based budgeting and benchmarks, while the State should reform Medicaid supplemental payments and redistribute surplus commercial insurance revenues to more equitably support indigent care.
Recommendations related to City Budget
The City Office of Management and Budget (OMB) and H+H leadership should develop a new approach to financial planning and budgeting.
Multiyear goals should be set for increasing efficiency as evidenced in reduced unit costs such as lower cost per visit and per discharge and for added revenue based on benchmarks from safety net institutions and internal comparisons among H+H facilities.
Progress toward the benchmarks should be publicly monitored, and H+H leadership held accountable.
Central and facility managers should have compensation incentives to meet targets and be accountable if they do not without sufficient mitigating circumstances.
Better target Medicaid supplemental payments to H+H and other facilities with the greatest need, and finance the nonfederal portion of these payments with State revenues rather than local intergovernmental transfers.
Use more equitably the surplus operating revenue earned by large networks from commercial insurers to cross subsidize indigent care on a system wide as well as an intra-institutional basis.
Better align Medicaid hospital payment rates to reasonable unit costs of services, and fund with better use of Medicaid supplemental payments, more equitably allocated high commercial insurance payments and other broad based sources.
Key Data
$8 billion
— Annual budget of New York City Health + Hospitals.
$1.7 billion
— City support to H+H in fiscal year 2019.
$359 million
— City support to H+H in fiscal year 2009.
$2.3 billion
— Projected City support to H+H in fiscal year 2023.
$3 billion
— Average annual operating deficit for H+H in fiscal years 2015 to 2017.
$1.1 billion
— Annual amount the City provides for the nonfederal share of most supplemental payments.
New York City's property tax system generates nearly $30 billion annually, accounting for 32 percent of all city revenues and funding one-third of total city spending. To address systemic inequities, the tax structure requires comprehensive reform, including moving cooperatives and condominiums to Class 1, eliminating the class share system, and implementing a circuit breaker for owner-occupied residences.
Recommendations related to City Budget
Move cooperatives and residential condominiums to Class 1 with one-, two-, and three-family homes.
Valuation for tax purposes should reflect actual real estate market value, using sales-based models for one-, two-, and three-family homes, cooperatives, and residential condominiums.
Full market value should be the starting point for assessing the tax base.
Class 1 should face the lowest tax burden, as measured by the ETR, with increasing ETRs for residential rental buildings, utilities, and commercial properties, in that order.
The use of a homestead exemption to reduce tax burdens on owner-occupied primary residences should be considered.
The existing class share system should be eliminated.
Stability of the property tax should be achieved by phasing-in market value changes over three years for all parcels.
Rebates of owner-occupied residential property taxes should be provided based on household income when tax bills exceed a set share of income, creating a 'circuit breaker' to replace certain existing tax reduction programs.
Transition to the new system should occur over a five-year period.
Key Data
$30 billion
— The amount of revenue the property tax will generate in fiscal year 2020.
32 percent
— The portion of all City revenues generated by the property tax in fiscal year 2020.
$1 out of every $3 dollars
— The amount of City spending funded by the property tax.
6.2 percent
— The average annual growth of property tax revenue since fiscal year 1999, adjusted for tax policy changes.
New York City is currently barred by state law from using efficient design-build procurement methods, resulting in capital projects that take longer and cost more than necessary. Authorizing these innovative methods would allow the city to better manage its capital budget and improve project delivery.
Recommendations related to City Budget
The Governor should sign A7636B/S6293A to authorize New York City to use design-build and other innovative capital procurement methods.
Future amendments should address concerns regarding project-labor agreements (PLAs), protections for public sector capital project managers, and prohibitions on using outside contractors to maintain assets built through design-build.
New York City spends $1.4 billion annually on pupil transportation, and proposed legislation would codify costly contract provisions that courts have previously deemed unlawful and anticompetitive. Maintaining flexibility in procurement is essential to controlling these expenses and securing savings for taxpayers.
Recommendations related to City Budget
The Governor should veto A7749/S6208, which would impose costly restrictions on school bus contracts in New York City.
The City must maintain flexibility to procure and negotiate pupil transportation contracts to secure savings for future taxpayers.
The proposed legislation, which would codify contract components that courts have previously struck down, should be rejected.
Key Data
$1.4 billion
— Annual cost of New York City pupil transportation.
New York City's budget has grown at an unsustainable pace, with City-funded expenditures rising 6.6 percent in fiscal year 2019 and headcount increasing by over 29,000 since 2014. To prepare for potential economic downturns, the city should restrain spending growth, keep headcount flat, and set more ambitious agency savings targets.
Recommendations related to City Budget
The city should restrain spending by offsetting new expenses with recurring commensurate savings to ensure budget growth remains sustainable.
The city should keep headcount flat, ensuring fiscal years 2020 and 2021 do not exceed the fiscal year 2019 year-end level of 326,739.
Agencies should be required to identify and implement budget savings from improved operational efficiency equal to at least 1 percent of their city-funded budget.
The city should increase budgetary reserves or make deposits to the Retiree Health Benefit Trust (RHBT) using additional resources generated by savings or higher than forecast revenues.
Key Data
6.6 percent
— Growth rate of City-funded expenditures in fiscal year 2019.
$92.0 billion
— Total City spending in fiscal year 2019.
326,739
— Number of full-time and full-time equivalent employees in the municipal workforce at the end of fiscal year 2019.
29,000
— Increase in municipal workforce headcount since fiscal year 2014.
$714 million
— Annual recurring savings produced by requiring agencies to identify 1 percent efficiency savings.
$20 billion
— Potential tax revenue shortfall below financial plan projections over three years in the event of a recession.
$15 billion is the CBC's estimate of the three-year revenue shortfall for New York City government in a recession. First Deputy Mayor Dean Fuleihan joined CBC President Andrew Rein for a wide-ranging discussion about the City's budget, closing Rikers, access to hydropower, NYC's competitiveness, and more.
First Deputy Mayor Dean Fuleihan joined CBC President Andrew Rein for a wide-ranging discussion about the City's budget, closing Rikers, access to hydropower, NYC's competitiveness, and more.
New York City voters are being asked to approve a charter amendment creating a "rainy day fund" to allow the city to save money during prosperous times to avoid service cuts or tax increases during economic downturns. This mechanism is intended to mitigate the impact of potential recessions, which could otherwise lead to multi-year revenue shortfalls of at least $15 billion.
Recommendations related to City Budget
Voters should vote yes to approve the change to the city charter that would allow the city to create a “rainy day fund”.
Voters should vote yes on Ballot Question 4 to create a rainy day fund to protect New Yorkers when they need it most.
Key Data
$15 billion
— Potential multi-year revenue shortfalls that could result from a recession.
The New York State Legislature passed 18 bills that would increase public employee pension and disability benefits, carrying a projected first-year cost of at least $71 million. These measures threaten to undermine previous fiscal reforms and should be vetoed to prevent unnecessary growth in personnel costs.
Recommendations related to City Budget
The Governor should veto all 18 bills passed by the Legislature to enhance pension or disability benefits, or provide other additional benefits, without providing enhanced services to New Yorkers or offsetting savings.
The Governor should continue the tradition of rejecting benefit sweeteners to ensure that past reforms, such as Tier 6 pension benefits and progressive health insurance contributions, are not overturned.
Key Data
$71 million
— The projected first-year cost of the 18 bills passed by the Legislature.
$5.6 million
— The annual cost to allow New York City police officers to receive retirement credit for time spent as cadets.
$41 million
— The first-year cost of the bill establishing a 20-year retirement plan for certain state law enforcement positions.
$15.7 million
— The first-year cost of the bill requiring New York City paraprofessionals to join the Teachers Retirement System.
$2.1 million
— The first-year cost of the bill granting enhanced disability benefits to Nassau County ambulance medical technicians.
$1.5 million
— The first-year cost of the bill allowing Nassau County sheriffs and correction officers to be eligible for performance of duty disability benefits due to civilian acts.
The New York City Housing Authority's NYCHA 2.0 plan faces significant implementation risks due to funding uncertainties, federal regulatory hurdles, and stalled development projects. Without securing the projected $16 billion in new revenue, thousands of units will remain unrepaired, exacerbating the physical deterioration of the city's public housing stock.
Recommendations related to City Budget
The federal monitor should work with the new Chair to increase funding for federal operating and capital subsidies to support NYCHA's turnaround efforts.
NYCHA must lift the cap on RAD conversions to allow for the conversion of additional units in the future.
The authority should lift the federal prohibition on design-build and best value procurement for federally-funded capital projects to complete work faster and for less money.
NYCHA must achieve collective bargaining reforms to modernize work rules and schedules, which are essential for efficient property management.
The City and State must devote a substantial share of their volume cap to NYCHA to allow for the use of private activity bonds in financing the PACT pipeline.
Key Data
$31.8 billion
— NYCHA's five-year capital needs.
$16 billion
— New revenue for capital repairs over 10 years that NYCHA 2.0 aims to raise.
$181,000
— Average per-unit capital need across NYCHA's portfolio.
$288 million
— Amount of City funds NYCHA's 2019 operating budget relied upon.
$101 million
— Fiscal year 2020 funding included for collective bargaining-related costs.
$450 million
— State capital funding appropriated in 2016 and 2017 that has not yet been released to NYCHA.
New York City's spending on leased space for public facilities has surged to over $1.1 billion annually, growing 40 percent since fiscal year 2014. To control these rising costs, the city must improve its management and transparency by systematically collecting and publishing data on lease costs and space utilization.
Recommendations related to City Budget
The Department of Citywide Administrative Services should accelerate efforts to improve its management, monitoring, and analysis of leased space to ensure its use is efficient and cost-effective.
The city must uphold its Charter-mandated obligation to collect, monitor, and publish data on its real estate holdings.
The city needs to evaluate whether agencies efficiently use their facilities, whether owning or leasing space is more cost-effective, and whether expiring leases should be extended or vacated.
Key Data
$1.1 billion
— Total spending on leased space for public facilities and offices in fiscal year 2018.
40 percent
— Growth in lease costs from fiscal year 2014 to fiscal year 2018.
$9.7 billion
— Total future rent obligations on the City’s existing leases.
22 million
— Square feet of real estate leased by the New York City government from private owners.
$829 million
— Amount of City spending on leased space overseen by DCAS in fiscal year 2018.
New York City's budget grew by $19 billion between fiscal year 2014 and fiscal year 2019, rising from $77 billion to $96 billion. This spending increase was driven primarily by education, health, and social services, with four specific agencies accounting for $10 billion of the $15 billion growth in agency budgets.
Key Data
$19 billion
— Total New York City budget growth from fiscal year 2014 to fiscal year 2019.
4.5 percent
— Average annual growth rate of the New York City budget between fiscal year 2014 and fiscal year 2019.
$10 billion
— Portion of the $15 billion agency budget increase accounted for by Education, Social Services, Homeless Services, and Police.
$6.2 billion
— Total spending growth within the Education sector.
$1.3 billion
— Total spending growth within the Social Services sector.
$1.1 billion
— Total spending growth within the Homeless Services sector.
The Opportunity Zone program, while intended to spur investment in low-income areas, creates significant fiscal costs for New York State and City by deferring or excluding capital gains taxes. To mitigate these impacts and ensure accountability, the state should implement mandatory reporting requirements for funds or consider decoupling from the federal program entirely.
Recommendations related to City Budget
The State can require Opportunity Funds operating in New York State to report on their activity in order to qualify for state tax benefits.
The State could require funds to report annually on the value of gains invested by New York State taxpayers in qualified opportunity funds.
The legislature could pass a bill that would limit benefits to residential projects that meet a minimum affordability threshold for a fixed set of time or to commercial projects that are consistent with an REDC strategic plan.
The State could limit benefits to zones that meet both the poverty and family income thresholds, or to those that meet the criteria based on the most recently available Census data.
New York State could decouple fully from the federal program.
Key Data
$63 million
— Annual revenue loss for New York State due to the Opportunity Zone program.
$31 million
— Annual revenue loss for New York City due to the Opportunity Zone program.
$2 billion
— Estimated annual cost of the Opportunity Zone program to the federal government.
$53 billion
— Amount that funds intend to raise to invest in Opportunity Zone projects as of August 2019.
$6 trillion
— Estimated amount of unrealized capital gains held by taxpayers nationally.
$49.2 billion
— Realized capital gains by individual taxpayers in New York City in tax year 2014.
The City Charter should be amended to establish a Rainy Day Fund, allowing New York City to accumulate resources during periods of economic growth to mitigate spending cuts and tax increases during downturns. This proposal includes specific legal language to ensure the fund's operations comply with balanced budget requirements and state financial emergency laws.
Recommendations related to City Budget
The city should establish a Rainy Day Fund to improve the city's financial management framework.
The city should specify that Rainy Day Fund deposit and withdrawal rules be codified in City law.
The city should permit use of the Rainy Day Fund without violating the City Charter and the State Financial Emergency Act for the City of New York balanced budget requirements.
The Charter Revision Commission should have the proposed language reviewed and modified as appropriate by those with deep expertise in drafting legislation.
Key Data
$100 Million
— Minimum amount required for the general reserve at the beginning of any fiscal year.
$3.2 billion is the amount NYC spends on homeless services, double what was spent in 2014, earning the agencies providing these services a spot on NYC Comptroller Scott Stringer's Agency Watch List. Learn more about this list and the Comptroller's assessment of the City budget, rent regulation reform, and more.
New York City's spending obligations in fiscal year 2019 exceeded collected revenues by $255 million due to the practice of 'surplus rolling,' where funds are prepaid for future expenses. This shortfall, combined with accelerating expenditure growth and a projected record-high city workforce, suggests that current spending levels are unsustainable even during periods of economic strength.
Recommendations related to City Budget
The Mayor and Council Speaker should continue to identify opportunities to restrain spending much more, particularly in ways that improve productivity so that priority services are preserved.
Key Data
$255 million
— The amount by which the City's spending obligations in fiscal year 2019 exceeded the revenues collected.
$4.576 billion
— The amount the City prepaid at the end of fiscal year 2018 for fiscal year 2019 expenses.
5.7 percent
— The rate at which City-funded expenditures grew in fiscal year 2019.
5.3 percent
— The projected increase in City-funded expenditures for fiscal year 2020.
333,433
— The number of authorized city workforce positions projected for fiscal year 2020.
$100 million
— The amount of the optional deposit made into the Retiree Health Benefits Trust in addition to the $255 million in spending obligations.
At a fireside chat with CBC President Andrew Rein, NYC Comptroller Scott Stringer discussed City fiscal policy, the need for rainy day reserves, and how to promote New York City’s competitiveness, among other topics.
The Budget Navigator tool has been updated to include fiscal year 2019 and 2020 data from the New York City and New York State budgets. Users can utilize this interactive feature to explore revenue and expense trends, compare long-term data, and visualize snapshots of financial information dating back to fiscal year 2008.
The Fiscal Year 2020 Adopted Budget increases spending, savings, and reserves, but new spending commitments exceed deposits to the City’s reserves. While the budget includes $329 million in new savings and deposits to the general reserve and Retiree Health Benefits Trust, more resources should have been set aside to bolster fiscal standing during the current economic expansion.
Recommendations related to City Budget
The City should place the vast majority of new resources in reserve rather than dedicating most funds to service expansion and new spending initiatives.
The Mayor and Council Speaker should bolster the City’s fiscal standing while the economy continues to thrive in order to protect New Yorkers when the rainy day arrives.
Key Data
$329 million
— New savings included in the budget agreement.
$45 million
— Creditworthy savings from headcount and Thrive NYC reductions.
$150 million
— Increase to the City's general reserve.
$100 million
— Increase to the Retiree Health Benefits Trust (RHBT).
New York City should amend its charter to establish a Rainy Day Fund, allowing the city to save revenue during economic growth to prevent service cuts and tax increases during downturns. This fund would address the current inability to save money under the city's strict balanced budget requirement, which currently forces the city to rely on problematic workarounds like pre-paying expenses or using retiree health benefit assets.
Recommendations related to City Budget
The charter commission should approve and advance the creation of a Rainy Day Fund (RDF) to voters in November.
The charter commission should leave the charter’s budgeting and financial management framework intact except to allow an RDF, well structured to preserve both long- and short-term stability.
The city should set the target size of the fund at 17 percent of tax revenues to mitigate a recession or emergency’s most damaging impacts.
The city should require annual deposits of 75 percent of all tax revenues in excess of 3 percent growth to allow spending on services to grow while generating substantial resources.
The city should ensure that withdrawals are limited to periods of recession or emergency, with economic triggers defined in law.
Key Data
$1.25 billion
— Annual amount currently included in the financial plan for reserves.
$15 billion to $20 billion
— Projected three-year revenue shortfall from a recession comparable to the past two.
17 percent
— Target size of the Rainy Day Fund based on past revenue trends to mitigate recessionary impacts.
75 percent
— Recommended annual deposits of all tax revenues in excess of 3 percent growth.
$9 billion
— Amount the city would have in its Rainy Day Fund had the recommended deposit policy been in place during the current record-long recovery.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills that would increase costs for state and local governments by expanding pension, disability, and health benefits for public employees. These proposed measures, if enacted, would create significant long-term fiscal liabilities for New York City and other municipalities, often without dedicated funding sources.
Key Data
$942.6 million
— Increase in costs for the teachers retirement system, state and local police and fire system, and New York City retirement systems.
$149 million
— Annual costs and immediate past service cost for increasing Tier 6 pension benefits.
$59.3 million
— Annual increase and immediate past service cost for calculating retirement benefits for elected or appointed judges.
$41.1 million
— Cost for establishing a 20-year retirement plan for law enforcement officers.
$13.1 million
— One-time past service cost for modifying the in-service death benefit for state correction officers.
$121.7 million
— Additional annual cost for increasing the salary used in the computation of the special accidental death benefit.
New York City faces a potential $15 billion to $20 billion revenue shortfall in the event of a recession, yet the proposed $92.5 billion executive budget fails to adequately bolster reserves. To prepare for economic uncertainty, the city should prioritize adding all newly identified funds to reserves and implementing efficiency measures like centralizing procurement and consolidating union welfare funds.
Recommendations related to City Budget
The two highest priorities should be to add all newly identified money to the city’s reserves and offset any added spending with dollar-for-dollar reductions.
The city should save the Retiree Health Benefits Trust fund for its designed purpose—to pay future retiree health costs—and not consider it a reserve to be used if the economy contracts.
The city should wipe out more of the 4,700 full-time vacancies still remaining in the budget.
The city should pursue a more extensive fleet reduction to save more than the $20 million identified in fiscal year 2020.
The city should save $80 million by centralizing procurement.
The city should save $160 million by consolidating and centralizing union welfare funds.
Any new initiatives proposed by the council or mayor should be funded only if spending offsets can be identified.
Key Data
$92.5 billion
— The executive budget proposed by Mayor Bill de Blasio in April.
$474 million
— Personal income tax revenues that came in higher than expected through the end of April.
$317 million
— Average amount freed up between the executive budget and the adopted spending plan due to spending underestimates over the last three years.
$800 million
— Potential additional funds available to the city going into budget adoption.
$15 billion to $20 billion
— Potential three-year revenue shortfall that a recession could cause.
$1.2 billion
— Total spending requests made by the City Council for its priorities.
New York City's budget has grown significantly, with total spending projected to reach $100.6 billion by fiscal year 2023 alongside a workforce of over 337,000 employees. The city faces substantial long-term liabilities totaling $257.3 billion and potential tax revenue shortfalls of up to $20.4 billion in the event of a recession similar to 2008.
Key Data
$100.6 Billion
— Projected total NYC spending in fiscal year 2023.
337,477
— Projected full-time and full-time equivalent headcount for fiscal year 2023.
$20.4 Billion
— Potential tax revenue shortfall based on the 2008 recession.
$15.4 Billion
— Potential tax revenue shortfall based on the 2001 recession.
$257.3 Billion
— Total largest long-term liabilities in fiscal year 2018.
New York City should amend its Charter to establish a Rainy Day Fund and properly structure the Retiree Health Benefits Trust to improve long-term fiscal management. The City should also maintain current budgetary powers, such as the Mayor's authority to impound funds and the existing process for estimating non-property tax revenues, while expanding the capital asset inventory.
Recommendations related to City Budget
The Charter should be amended to exclude from its balanced budget requirements a deficit that is funded by an RDF that adheres to the sound principles laid out in CBC’s recent report To Weather a Storm.
The Charter should be amended to properly structure the Retiree Health Benefits Trust (RHBT), which is now imprudently considered a de facto RDF.
The Commission should not propose to modify the process and timeline for estimating non-property tax revenues, since the current framework has served the City well.
The Commission should not propose to create independent or formula budgets for certain offices, since they would not ensure these offices’ independence and would undercut the City Council and Mayor’s role in setting budgetary priorities.
The Commission should not propose to narrow the Mayor’s power to impound funds, as this power rarely has been an impediment to good financial management.
The Commission should consider presenting proposed amendments as discrete groups of like proposals so that voters can consider the worthiness of each.
The Commission should expand the Charter-defined components of the capital asset inventory to include all assets that meet capital financing eligibility criteria that are owned by an agency or authority that the City controls.
Key Data
$15 billion to $20 billion
— Cumulative tax revenue shortfalls New York City would face over three years during a recession comparable to the prior two.
$35,000
— Current capital financing eligibility criteria for assets included in the capital asset inventory.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills that would expand public employee benefits, such as pensions, health insurance, and leave, often resulting in significant, unfunded fiscal liabilities for state and local governments. These proposed benefit enhancements frequently carry substantial past service costs and ongoing annual contribution increases that impact municipal budgets across New York.
Key Data
$942.6 Million
— Total estimated cost increase for New York City retirement systems from bill A7413/S5835.
$121.7 Million
— Additional annual cost for increasing the salary used in the computation of the special accidental death benefit.
$59.3 Million
— Annual increase and immediate past service cost for calculating final average salary for judges as the last year's salary.
$41.1 Million
— Total cost for establishing a 20-year retirement plan for law enforcement officers, including state and past service costs.
$1.5 Million
— Increase in Nassau County annual contributions and past service costs for performance of duty benefits for sheriffs and correction officers.
$92.5 billion is the size of the NYC Executive Budget for FY 2020, an increase of 29% in total spending since Bill de Blasio's first year as Mayor. Joining the podcast to review budget highlights is Yoav Gonen, City Hall reporter for The City.
The fiscal year 2020 executive budget increases city-funded spending by 3.6% while failing to implement sufficient efficiency measures to prepare for a potential $15 billion to $20 billion revenue shortfall during a recession. Although the 10-year capital strategy has grown to $116.9 billion, it requires more rigorous planning and a focus on state of good repair to be effective.
Recommendations related to City Budget
The 10-year capital strategy should undergo more comprehensive planning and prioritization focusing on state of good repair work.
The city should take steps to preserve services or forestall tax increases in preparation for eventual hard times.
The Program to Eliminate the Gap should prioritize savings from improved efficiency rather than relying on expense reestimates, increased revenues, and funding shifts.
Key Data
3.6%
— City-funded spending increase in the executive budget.
1,600
— Reduction in headcount of vacant positions on a recurring basis.
$1.25 billion
— Annual contingency and capital reserve funds budgeted.
$15 billion to $20 billion
— Potential three-year revenue shortfall that a recession could drive.
$12.8 billion
— Growth in the 10-year capital strategy from the Preliminary Budget.
$116.9 billion
— Total value of the 10-year capital strategy.
A new study by the Citizens Budget Commission finds that each trip costs taxpayers $10.73. That's more than 10 times the subsidy for a trip on the subway at $1.05. Watch the original segment here .
The NYC Ferry system requires high public subsidies, with per-ride costs significantly higher than other transit options, and its funding through the Economic Development Corporation limits transparency and oversight. City officials should reevaluate the ferry's operating strategy, pricing model, and expansion plans to ensure more efficient use of transportation funding.
Recommendations related to City Budget
City officials should reconsider the policy choices that contribute to the high subsidies, evaluate options that would reduce the level of subsidy, and consider whether alternative uses would meet the city’s transportation needs more efficiently and more effectively.
The high rate of leisure travel offers an opportunity to charge higher fares on weekends and for noncommuters to offset the cost of subsidies for daily commuters.
Dynamic pricing models could be more appropriate for long, low-productivity routes that require substantial subsidies and see demand spikes on weekends.
A different fare structure could also mitigate the need to charter vessels or purchase larger boats.
Key Data
$10.73
— The per-ride operating subsidy for the NYC Ferry system in fiscal year 2018.
$24.75
— The projected per-ride subsidy for the planned Coney Island ferry route.
$56.7 million
— The total operating costs for the NYC Ferry system in fiscal year 2018.
$638.5 million
— The total capital commitments for the NYC Ferry system as of February 2019.
22 percent
— The farebox operating ratio for the NYC Ferry system in 2018, indicating the share of operating costs covered by fare revenue.
$41.3 million
— The amount of revenue retained by the Economic Development Corporation in fiscal year 2017 that would otherwise have been remitted to the City.
The City Charter should be amended to eliminate specific capital budget allocations for Borough Presidents, as existing provisions already provide sufficient opportunity for them to identify needs and advise the city. This proposal includes removing requirements for dedicated capital appropriations and maintenance funding, as well as amending provisions for topographical bureaus.
Recommendations related to City Budget
The Commission should eliminate § 211 of the Charter, which sets aside 5% of the capital appropriations over which the City has substantial discretion for the five Borough Presidents.
The Commission should eliminate § 102-a, which requires the City’s expense budget to dedicate 0.9% of the cost of Borough Presidents’ capital projects to their maintenance.
The Commission should amend § 216 and § 249, which refer to the capital budget borough allocation.
The Commission should amend § 82, which requires Borough Presidents to maintain topographical bureaus to assist with capital projects in the borough.
Key Data
5%
— of the capital appropriations over which the City has substantial discretion are set aside for the five Borough Presidents.
0.9%
— of the cost of Borough Presidents’ capital projects is required to be dedicated to their maintenance in the City’s expense budget.
The New York City Charter should be amended to improve financial management by establishing a rainy day fund, mandating the Retiree Health Benefits Trust Fund, and expanding the capital asset inventory. Additionally, the city should refine the capital budget role of Borough Presidents and implement a regular, statistically valid resident feedback survey to enhance service delivery and accountability.
Recommendations related to City Budget
The Charter should be amended to allow for and create a Rainy Day Fund to help the City accumulate reserves during good economic times.
The Charter should be amended to mandate the Retiree Health Benefits Trust Fund (RHBT), require annual deposits, and limit disbursements to the PAYGO cost of retiree health and welfare benefits.
The Charter should be amended to make the City’s capital inventory and needs assessment more comprehensive by including all assets that meet capital financing eligibility criteria.
The Charter should be amended to focus the Borough Presidents’ roles on identifying borough-based needs and advising the Mayor and the City Council on how best to address those needs.
The Charter should be amended to require the City to solicit resident feedback on quality of life and City service delivery in a manner that produces statistically valid results at the community district level at least every four years.
Key Data
$15 billion and $20 billion
— Estimated tax revenue shortfall over three years in the event of a recession.
$103.3 billion
— Total OPEB liability at the end of fiscal year 2018.
$182 million
— Funding received by citywide elected offices, Borough Presidents, Community Boards, and the Civilian Complaint Review Board in fiscal year 2019.
5 percent
— Portion of proposed capital budget appropriations currently allocated to Borough Presidents.
5.3 percent
— Average annual growth of City-funded spending over the last 18 years.
2.3 percent
— Average annual rate of inflation over the last 18 years.
New York City faces a potential $30 billion cumulative budget gap over three years if a recession occurs, necessitating immediate action to increase reserves and reduce spending. Current budget reserves and the Retiree Health Benefit Trust are insufficient to cover these projected shortfalls, leaving the city vulnerable to service cuts and tax increases.
Recommendations related to City Budget
The Executive Budget for Fiscal Year 2020 should reflect constrained spending growth, greater budget reserves, and a substantial increase in recurring savings.
The City should take immediate action to reduce spending growth and increase reserves to prepare for an inevitable economic downturn.
The City must generate substantially larger savings to forestall drastic service cuts and counterproductive tax increases in the midst of a recession.
Key Data
$30 billion
— Cumulative three-year budget gaps projected under a potential recession scenario.
$15.2 billion and $20.2 billion
— Range of three-year tax revenue shortfalls if a recession begins in fiscal year 2020.
$750 million
— Amount of recurring savings announced in the Executive Budget, which would only reduce the cumulative three-year gap by 7.5 percent.
$1.25 billion
— Amount of existing annual budget reserves, which are deemed inadequate to forestall service cuts and tax increases.
$103.3 billion
— Estimated liability for other postemployment benefits (OPEB) at the end of fiscal year 2018.
$4.5 billion
— Current balance of the Retiree Health Benefit Trust (RHBT).
New York City's annual capital investments have grown significantly, reaching $11.8 billion in fiscal year 2018 with over $83 billion in commitments forecasted through 2023. Establishing a comprehensive, transparent online database for these construction projects is essential to improve oversight and allow for better tracking of project costs and delays.
Recommendations related to City Budget
The City should use the existing Capital Projects Dashboard as the basic platform for the new database to leverage an existing system.
The legislation should require a broader scope of projects, a downloadable format, and up-to-date data to improve transparency.
The database should include each project’s associated capital budget lines and project ID codes to allow for linkage to budget documents.
The database should retain data on completed projects to allow for retrospective assessment of performance.
Key Data
$7.4 billion
— The amount of capital commitments made by the City in fiscal year 2014.
$11.8 billion
— The amount of capital commitments made by the City in fiscal year 2018.
$83.8 billion
— The forecasted capital commitments for the City from fiscal years 2019 through 2023.
$25 million
— The current threshold for capital projects included in the existing Capital Projects Dashboard.
$10 billion
— The approximate annual capital commitments made by the City.
$92.2 billion is the size of the NYC's FY 2020 preliminary budget proposed by Mayor de Blasio. Sally Goldenberg, the City Hall bureau chief for Politico NY, joins the podcast to discuss the budget and what to expect as budget season kicks off.
Watch the original segment here . A day after Mayor Bill de Blasio ordered city agencies to cut from their own budgets , Errol Louis spoke with two experts — Ronnie Lowenstein, the director of the New York City Independent Budget Office, and Andrew Rein, the president of the Citizens…
New York City's fiscal year 2020 preliminary budget projects a 3.4 percent increase in city-funded spending, while the ten-year capital strategy has grown to $104.1 billion. To prepare for potential economic downturns, the city must limit spending growth to inflation, increase reserves, and prioritize recurring savings through operational efficiencies.
Recommendations related to City Budget
Greater recurring savings from making government more efficient are needed to bolster reserves and make certain that the City can provide critical services to New Yorkers in both good times and bad.
Spending growth should be limited to inflation and reserves should be increased.
The PEG announced today should be developed with an eye to making operations more efficient and generating recurring savings.
Key Data
3.4 percent
— City-funded spending growth projected in fiscal year 2020.
$104.1 billion
— Total of the Preliminary Ten-Year Capital Strategy for Fiscal Years 2020 to 2029.
8.7 percent
— Increase of the Preliminary Ten-Year Capital Strategy over the prior ten-year strategy.
New York City's budget has grown significantly, with spending increasing by $20 billion since 2014 and the workforce expanding to 332,000 employees, yet reserves remain insufficient to weather a potential recession. To ensure long-term fiscal health, the city must limit spending growth to inflation, reduce long-term liabilities, and implement more rigorous efficiency savings while stabilizing public authorities like NYCHA and the MTA.
Recommendations related to City Budget
Limit spending growth to inflation to ensure that City-funded spending increases do not exceed 2.5 percent in fiscal year 2020.
No additional headcount should be authorized, as improved productivity of existing personnel should accommodate new needs and initiatives.
The Citywide Savings Program should generate recurring operational savings equal to at least 1 percent of City-funded spending to fund new or expanded programs.
The City should plan for annual deposits to the Retiree Health Benefits Trust at higher levels to address the nearly $100 billion in unfunded liabilities.
The City should focus on priority projects and reduce the funding level in the upcoming Ten-Year Capital Strategy to align with a resource-constrained environment.
Key Data
$20 billion
— Increase in City spending since fiscal year 2014.
$16 billion
— Potential revenue shortfall in a recession similar in scope to the previous three.
$100 billion
— Long-term unfunded liability for retiree health insurance and other postemployment benefits.
$1.8 billion
— Overtime spending in fiscal year 2018.
$257 billion
— Aggregate long-term liabilities at the end of fiscal year 2018.
$32 billion
— NYCHA capital needs over the next five years.
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 disparate tax burdens between property classes and the lack of transparency in valuation methods. Implementing a market-value-based assessment system with a circuit breaker for lower-income homeowners would create a more equitable, transparent, and stable tax structure.
Recommendations related to City Budget
Move cooperatives and residential condominiums to Class 1 with one-, two-, and three-family homes.
Class 1 should face the lowest tax burden, as measured by the effective tax rate, with increasing rates for other property classes.
Valuation for tax purposes should reflect actual real estate market value using transparent methods.
The existing class share system should be eliminated to remove distortions in tax burdens.
Stability of the property tax should be achieved by phasing-in market value changes over three years for all parcels.
Rebates should be provided of owner-occupied residential property taxes based on household income through a 'circuit breaker' that replaces certain existing tax reduction programs.
The transition to the new system should occur over a five-year period.
Key Data
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.
four to five times
— Currently, effective tax rates of commercial and rental properties are four to five times those of owner-occupied homes.
2.25 times
— A report on the largest city in each of the 50 states indicates that effective tax rates on commercial properties are no greater than 2.25 times that of owner-occupied homes in 46 of 53 cities.
5 percent
— The circuit breaker could apply to property taxes on residential properties that exceed 5 percent of household income for households with income below $100,000.
20 percent
— The current 20 percent cap on assessed value growth over five years on Class 1 homes results in foregone revenue by delaying the recognition of growth.
New York City's emergency medical services system suffers from significant inefficiencies, including excessive resource allocation to non-emergency calls and the costly, often unnecessary, deployment of fire engines to medical incidents. Restructuring the system to prioritize life-threatening emergencies, optimize ambulance staffing, and reduce redundant fire engine responses could improve patient outcomes while generating substantial taxpayer savings.
Recommendations related to City Budget
Build on the experience of other cities to develop programs to reduce residents’ unnecessary or inappropriate requests for an ambulance.
Increase the number of and more efficiently staff the ambulances which are best able to respond to the life threatening incidents (known as Advanced Life Support or ALS ambulances) so they can arrive at relevant incidents more promptly.
Dramatically reduce the role of fire engines in responding to medical incidents; they should be dispatched to these incidents 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.
Reversing REMSCO’s policy that New York City ALS ambulances must have two paramedics would allow the City to assign one paramedic and one EMT, as is the practice in the rest of the state.
The City should 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
— Annual spending by the City of New York to provide emergency medical services.
$58.5 million
— Estimated annual savings from a 10 percent reduction in unnecessary or inappropriate ambulance requests.
$7.2 million
— Annual cost to operate one fire engine company, which could be reallocated if the company were closed.
$1,970
— Estimated average cost of a fire engine response to a medical incident in 2017.
$486
— Average cost of an ambulance run in 2017.
38.7 percent
— Share of medical incidents in 2017 that were considered potentially life-threatening.
The NYC Money Meter dashboard utilizes Budget Function Analysis and the Mayor’s Management Report to provide transparency regarding agency spending and performance metrics. Expanding the Budget Function Analysis to include more agencies would improve the usability of the city's budget, which is currently limited by reporting that excludes major departments.
Recommendations related to City Budget
The Budget Function Analysis should be expanded to cover more agencies, as it currently accounts for only 34% of the city’s fiscal year 2018 budget and excludes critical departments.
Key Data
34%
— Percentage of the city’s fiscal year 2018 budget accounted for by the Budget Function Analysis.
$89.16 billion is the size of the Adopted Budget for FY 2019. After adjusting for prepayments in prior years and other reserves and spending, the total value of spending is $92 billion. This episode features a panel of fiscal experts hosted by the Association for a Better New York. Listen…
$31.8 billion is the amount required to repair NYCHA's public housing units over the next five years. CBC Senior Research Associate Sean Campion discuss the findings and recommendations of CBC's recent report on NYCHA's capital needs and explains how NYCHA got into such a deep hole and and how it…
Uniformed overtime spending at the Fire Department and Department of Correction continues to exceed budget caps despite increased staffing levels, necessitating structural labor reforms. Addressing high absenteeism rates and renegotiating work rules in upcoming labor contracts are essential steps to curbing these persistent costs.
Recommendations related to City Budget
Labor and management must come to the table to develop better strategies to control uniformed overtime costs.
The high rate of absenteeism should be tackled with a comprehensive strategy and changes to the sick leave policy, which currently grants unlimited sick time to uniformed employees.
Work rule changes will need to be negotiated in the next round of labor contracts to address the root causes of excessive overtime.
Key Data
$1.2 billion
— Total uniformed overtime earnings in fiscal year 2016.
$59 million
— Increase in FDNY and DOC uniformed overtime budgets for fiscal year 2018.
$272 million
— FDNY uniformed overtime spending in fiscal year 2017.
$240 million
— DOC uniformed overtime spending in fiscal year 2017.
$250 million
— Revised FDNY fiscal year 2018 overtime budget.
$202 million
— Revised DOC fiscal year 2018 overtime budget.
The New York City Housing Authority faces a $32 billion capital funding gap over the next five years, with 90 percent of its housing units at risk of becoming irreparable by 2027. To address this crisis, the city must integrate the authority into its broader affordable housing strategy, leverage underutilized land assets, and transition to a more efficient management model to preserve the structural integrity of its housing stock.
Recommendations related to City Budget
Providing NYCHA with one-third of the City’s planned capital commitments for affordable housing over the next five years would give NYCHA an additional $1 billion through fiscal year 2022.
NYCHA should increase the pace of public-private partnerships to convert public housing units to the more stable Section 8 funding stream, which will address more than $2 billion in capital needs through 2022.
NYCHA should reduce the number of units it operates by transferring senior housing to qualified nonprofit organizations and selling its small, inefficient buildings with fewer than 200 units to address another $2.6 billion in capital needs.
Selling 10 percent of NYCHA’s air rights could raise $1.5 billion.
Accelerating the pace of infill development to build an additional 10,000 units could raise an additional $1.4 billion.
NYCHA should decentralize property management, modernize its collective bargaining agreements and staffing structures, increase the use of private maintenance contracts, and work with the City and State to use more flexible procurement arrangements.
Key Data
$32 billion
— Quantified capital needs for the New York City Housing Authority over the next five years.
90%
— Portion of New York City Housing Authority housing units at risk of deteriorating past the point at which they are cost-effective to repair by 2027.
$1 billion
— Additional funding for the New York City Housing Authority through fiscal year 2022 if provided one-third of the City’s planned capital commitments for affordable housing.
$2 billion
— Capital needs addressed through 2022 by increasing the pace of public-private partnerships to convert public housing units to the Section 8 funding stream.
$2.6 billion
— Capital needs addressed by transferring senior housing to qualified nonprofit organizations and selling small, inefficient buildings with fewer than 200 units.
$1.5 billion
— Potential revenue raised by selling 10 percent of New York City Housing Authority air rights.
The Fiscal Year 2019 budget for New York City features a 7.4 percent increase in City-funded operating spending and a $65 billion capital plan, raising concerns about fiscal sustainability and the adequacy of reserves. To address these challenges, the city should implement stricter labor negotiation policies, halt workforce expansion, and prioritize capital projects that emphasize state of good repair.
Recommendations related to City Budget
In negotiating new collective bargaining agreements, the City should hold firm on the following two items: raises in excess of the 1 percent per year the City has set aside must be funded through concessions or productivity increases and substantial health care savings must be secured.
Focusing on retiree health insurance benefits can help the City reduce its other postemployment benefits (OPEB) liability, and the City should develop a policy to increase the size of the RHBT to fund this liability.
The City must also halt the growth of the workforce, which has already grown by more than 33,000 positions and is projected to expand by an additional 7,000 employees.
Agencies should be required to find recurring efficiency savings equal to 1 percent of their City-funded spending and to fund new initiatives with commensurate savings in other program areas.
The Capital Plan should be reduced and refocused on strategic priorities that emphasize state of good repair and maximize the return on investment for new projects.
Using current resources as “pay-go capital,” instead of borrowing, would allow the City to invest in its infrastructure without increasing long-term liabilities.
Key Data
$4.7 billion
— The amount by which City-funded spending increased from fiscal year 2018.
$65.1 billion
— The projected capital spending for fiscal years 2019 to 2022.
$7.0 billion
— The amount budgeted for debt service in fiscal year 2019.
$1.8 billion
— The City's subsidy to New York City Health + Hospitals (H+H) in fiscal year 2019.
2 percent
— The portion of projected City-funded spending in 2019 held in budgetary reserves.
$25 billion
— The estimated capital needs for NYCHA developments.
$225 billion is the total amount added to reserves and the retiree health benefits trust fund in the recently adopted budget. In contrast, the City added more than $2 billion in new spending, far outpacing what was set aside. NYC Comptroller Scott Stringer joined the podcast to discuss the adequacy…
The Absent Teacher Reserve, a pool of teachers without permanent assignments who continue to receive full pay, cost New York City $136 million during the 2018 school year. To address this expense, the City should negotiate contract reforms to cap time in the reserve at six months or eliminate the program entirely.
Recommendations related to City Budget
The City should pursue reforms to the Absent Teacher Reserve, such as a six-month time limit, in upcoming labor negotiations with the UFT.
The City should use this round of negotiations to constrain, or preferably eliminate, the Absent Teacher Reserve.
Time in the Absent Teacher Reserve should be capped at six months.
Key Data
$136 million
— Cost of the Absent Teacher Reserve in the 2018 school year.
$98,126
— Average salary of teachers in the Absent Teacher Reserve.
$23 million
— Annual savings generated from the 2018 separation incentive for Absent Teacher Reserve teachers.
$119,472
— Maximum teacher salary following the June 2018 raise.
New York City's spending on homeless services has surged to $3.0 billion in fiscal year 2018, more than double the amount spent in 2014, despite efforts to reduce the shelter population. The administration must develop a clear, specific plan to control these escalating costs, which now exceed the budgets for entire departments like the Fire Department or Sanitation.
Recommendations related to City Budget
The Administration must provide a clear and specific plan to control the costs of homeless services.
Key Data
$3.0 billion
— Projected spending on services for New York City’s homeless population in fiscal year 2018.
$1.3 billion
— Amount spent on homeless services in fiscal year 2014.
$364 million
— Annual spending by the City on commercial hotels for homeless housing.
$100 million
— Estimated annual savings if the City could eliminate the use of hotels and shift to Tier II shelters.
$1.9 billion
— Shelter funding in fiscal year 2018.
$886.1 million
— Shelter funding in fiscal year 2014.
New York City's Fiscal Year 2019 Citywide Savings Program proposes $4.67 billion in savings, yet efficiency savings account for only 0.2% of total spending over the five-year period. The plan relies heavily on re-estimates, funding shifts, and debt service savings rather than operational efficiencies, which make up a smaller share of total savings than they did under the previous administration.
Recommendations related to City Budget
There must be more ambitious goals for efficiency savings.
To achieve lasting savings in city operations, Mayor de Blasio must set higher goals for more effective use of city resources.
Key Data
$4,670 million
— Total savings proposed in the Fiscal Year 2019 Citywide Savings Program.
$771 million
— Amount of savings attributed to efficiency in the Fiscal Year 2019 Citywide Savings Program.
0.2%
— Efficiency savings as a percentage of total spending proposed during the five-year period.
16%
— Share of total savings attributed to efficiency savings under Mayor de Blasio's Fiscal Year 2019 plan.
20%
— Minimum share of total savings attributed to efficiency savings under Mayor Bloomberg.
New York City's fiscal year 2019 executive budget proposes $90.8 billion in spending, with city-funded expenditures growing at 5.8%, more than twice the rate of inflation. To ensure long-term fiscal health, the City Council should scrutinize new spending proposals, prioritize high-return investments, and use surplus revenues to reduce long-term obligations like the Retiree Health Benefits Trust Fund rather than incurring new debt.
Recommendations related to City Budget
The City Council should limit growth in agency spending to ensure the city is on firmer footing for the long term.
The City Council should confine its own requests to those with the most significant impact.
The City Council should push to use additional city resources to make investments with a long-term payoff.
The City Council should carefully scrutinize spending proposals to ensure sound investments have positive returns.
Commissioners should justify new spending, account for the performance of existing programs and specify how they are saving on costs by improving operations.
The City Council should limit its own agenda to those items that provide the most return on investment.
The mayor and Council should devote any additional resources to uses that will reduce long-term fiscal burdens.
The mayor and Council should make a deposit to the Retiree Health Benefits Trust Fund to help defray the city’s $90 billion obligation for the health benefits of public retirees.
Surplus revenues should be used to purchase capital assets, such as equipment and vehicles, outright instead of incurring new debt.
Key Data
$90.8 billion
— Total spending proposed in the fiscal year 2019 executive budget.
5.8%
— The rate at which city-funded expenditures will grow between fiscal years 2018 and 2019, which is more than twice the rate of inflation.
$67.4 billion
— The total amount of city-funded expenditures for fiscal year 2019.
$90 billion
— The city's total obligation for the health benefits of public retirees.
$4.25 billion
— The current balance of the Retiree Health Benefits Trust Fund.
$76 billion
— The amount of debt repaid by city tax dollars expected next year.
5.8% - the increase in city-funded spending in the New York City Executive Budget for Fiscal Year 2019. Ana Champeny joins Ben and Maria to discuss increased spending, new initiatives, taxes, reserves, and more.
NY1 Errol Louis analyzed Mayor de Blasio’s $89 billion budget with Maria Doulis of the Citizens Budget Commission and Nicole Gelinas of the Manhattan Institute
New York City's Fiscal Year 2019 Executive Budget increases operating spending at more than twice the rate of inflation, with city-funded spending growing 5.8 percent and total headcount reaching a record high. Additionally, the city's five-year capital commitment plan has expanded to approximately $82 billion, necessitating greater scrutiny and reform of capital planning and budgeting processes.
Recommendations related to City Budget
Additions to the capital plan should be treated with the same caution and scrutiny as those to the operating budget.
Reforms to the city’s capital planning and budgeting processes should be part of the approval process for the capital commitment plan.
Key Data
5.8 percent
— The rate at which city-funded spending will grow in the Fiscal Year 2019 Executive Budget.
$82 billion
— The total amount the five-year capital commitment plan has ballooned to.
New York City faces nearly $1 billion in additional operating and capital expenditures for fiscal year 2019 due to state-mandated costs and prior budget actions. To manage these financial pressures alongside other anticipated shortfalls and spending priorities, the city must exercise fiscal restraint and maintain budgetary flexibility.
Recommendations related to City Budget
The City will need to exercise restraint in other areas to manage the additional fiscal burdens.
The City's budget should retain flexibility to address City Council priorities, such as the $212 million Fair Fares initiative.
Key Data
$970 million
— Total anticipated impact of State Budget actions on the New York City FY 2019 Executive Budget.
$418 million
— The City's required funding share for the Metropolitan Transportation Authority (MTA) Subway Action Plan.
$121 million
— The shortfall in education funding the City is facing compared to its Preliminary Budget forecast.
$200 million
— The estimated annual cost for the City to implement the State's Raise the Age initiative.
$150 million
— The remaining amount of sales tax revenue to be intercepted by the State in City fiscal year 2019 regarding STARC bonds.
$212 million
— The cost of the Fair Fares initiative to provide half-cost MetroCards to New Yorkers below the federal poverty line.
CUNY TV Channel 75 The City Council has presented a budget that includes reduced priced Metrocards for low-income New Yorkers and other ideas. Brian discusses this with Citizens Budget Commission president, Carol Kellerman and City Councilman Ydanis Rodriguez.
The 2018 Benefit Sweetener Scorecard tracks various legislative proposals that would have expanded pension and disability benefits for public employees, all of which were vetoed to avoid significant fiscal impacts. These vetoed measures represented potential long-term costs to the public retirement systems and municipal budgets.
Key Data
$13.20 Million
— One-time past service cost for enhancing in-service death benefits for state correction officers.
$2.42 Million
— Increased annual contributions and immediate past service cost for accidental disability retirement for law enforcement members.
$4.70 Million
— Annual costs associated with removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual costs and one-time retroactive cost for allowing Tier 6 uniformed court or peace officers to retire without early age reduction.
$168.3 billion is the size of New York State's Fiscal Year 2019 Budget. CBC's David Friedfel joined WT[D]P to discuss spending in this year's budget, as well as how the MTA, NYCHA, and New York City fared in the process.
New York State Comptroller Tom Dinapoli addressed CBC on March 26, 2018. His remarks covered Wall Street performance and the City economy, the State and City budgets, and State pension funds.
17% is the increase in the average bonus paid by Wall Street in 2017, bringing the average bonus to more than $161,000. NYS Comptroller Tom DiNapoli discusses Wall Street, the State and City budgets, State pension funds and more in remarks to CBC and a Q & A with Ben…
The Tax Cuts and Jobs Act creates significant challenges for New York City and State by capping local tax deductions, which threatens to reduce competitiveness and drive unplanned tax increases. To address these issues, the City and State must implement practical solutions that protect taxpayers and businesses while avoiding unsound tax policies driven by federal changes.
New York City's $79 billion Preliminary Capital Commitment Plan for fiscal years 2018 to 2022 is criticized for being overly ambitious, front-loaded, and lacking the necessary transparency to ensure efficient project completion. To improve capital planning, the city should implement rigorous needs assessments, adopt life-cycle cost analysis, and pursue procurement reforms like the repeal of the Wicks Law to control rising debt service costs.
Recommendations related to City Budget
The City should make smart and targeted capital investments by treating additions to capital plans with the same caution and scrutiny as additions to the operating budget.
The capital planning process should incorporate life-cycle cost analysis that includes the cost of operating, maintaining, and ultimately replacing capital assets.
The City should add performance metrics to the capital plan, such as per-unit costs or benchmarks to measure progress toward project milestones, to allow for better measurement of efficiency and effectiveness.
The City should pursue procurement reform, including the ability to use design-build and the repeal of Wicks Law, to reduce project costs and accelerate capital projects.
The City should use pay-go financing to offset the increasing costs of borrowing as interest rates rise.
Key Data
$79 Billion
— The total value of the Preliminary Capital Commitment Plan for Fiscal Years 2018 to 2022.
$9.5 billion is CBC’s estimate of the extra taxes New Yorkers will pay due to the cap on the state and local tax deduction, known as the SALT cap, enacted in the Tax Cuts and Jobs Act of 2017. Andrew Rein, director of CBC's Special Committee on Federal Tax Changes,…
New York City's capital commitment plan is consistently front-loaded and overly ambitious, leading to a buildup of excess appropriations and a failure to accurately project actual spending capacity. To improve transparency and oversight, the city must align its capital plan with realistic agency capacity and clearly defined priorities rather than relying on inflated projections.
Recommendations related to City Budget
The City should reduce the size of the capital commitment plan to force agencies to identify their capital priorities.
The commitment plan should reflect what agencies can reasonably commit and manage in a given year.
Reducing the size of the plan will prevent the buildup of excess appropriations and allow for better oversight of capital expenditures.
Eliminating the front-loading of planned commitments will allow for more accurate timing of future commitments.
A more realistic capital plan will force agencies to identify their capital priorities.
Key Data
$69.6 billion
— Total capital commitments called for in the Fiscal Year 2019 plan from fiscal year 2018 through fiscal year 2021.
$21.7 billion
— Amount planned for the first year of the Fiscal Year 2019 capital commitment plan.
$10.9 billion
— Actual commitments made during the fiscal year in the previous plan, despite a $20.0 billion projection.
54 percent
— Share of planned commitments the City actually achieved in fiscal year 2017.
$30.6 billion
— Level of available appropriations in fiscal year 2017, despite a planned commitment of $17.1 billion.
$3.2 billion
— Amount of prior appropriations rescinded in the Fiscal Year 2018 Executive Budget Capital Commitment Plan.
The School Bus Grant Program, which provides salary and benefit support to certain bus companies, circumvents competitive bidding and should be rejected to save taxpayer money. Instead, the city should rebid all pupil transportation contracts to foster competition and generate savings to offset the costs of reinstating employee protections.
Recommendations related to City Budget
The City Council should reject the grant program, which circumvents the public procurement process and increases costs to taxpayers without enhancing services.
The City Council should call for the de Blasio Administration to find savings in pupil transportation.
All new school bus contracts should be awarded with an eye toward realizing savings in the costs of pupil transportation.
Contracts should be rebid with the goal of generating savings to offset the increased costs incurred from the restoration of the EPPs.
The City should eliminate certain subsidies and costs, install GPS, and extend daily service periods without a fixed start time.
Key Data
$42 million
— Proposed spending in fiscal year 2018 to extend the School Bus Grant Program for a fourth year.
$1.1 billion
— Cost of pupil transportation in fiscal year 2018.
$1.2 billion
— Annual cost of pupil transportation.
$400 million
— Savings achieved by rebidding school bus contracts in 2012.
$28 million
— Cost of the School Bus Grant Program in its first year, fiscal year 2015.
$136 million
— Total four-year cost of the School Bus Grant Program.
New York City agencies have demonstrated inconsistent participation in preliminary budget savings programs across the Bloomberg and de Blasio administrations from fiscal years 2012 to 2019. To improve fiscal efficiency, the city needs to increase the scope and implementation of these savings initiatives.
Recommendations related to City Budget
The city needs to implement more savings programs to improve efficiency under Mayor de Blasio.
The New York City Teachers' Retirement System's Tax Deferred Annuity (TDA) fixed return fund guarantees a 7 percent return, which costs taxpayers $1.2 billion annually due to the gap between this guarantee and actual market interest rates. This arrangement creates a significant financial burden and risks the viability of the pension system by leveraging assets, necessitating reform to align the plan with market realities.
Recommendations related to City Budget
The unique, and uniquely expensive, arrangement for the teachers’ TDA plan should be reformed.
The most direct way to make the change would be to eliminate the TDA and transfer its assets and participants to OLR’s plan.
A more gradual change would be to require only newly hired teachers to use the OLR plan, but to reform the TDA plan serving current teachers and retirees.
The fixed income option should be converted to choices comparable to those offered in the OLR plan – a government bond fund and a corporate bond fund with returns based on prevailing interest rates.
Key Data
$1.2 billion
— Annual cost to New York City taxpayers for the guaranteed 7 percent investment return in the TDA fixed fund.
7 percent
— Guaranteed investment return rate for the TDA fixed fund.
$18.7 billion
— Amount of money in the TDA fixed fund as of 2015.
36 percent
— Taxpayer subsidy as a percentage of the total taxpayer contribution to the TRS QPP in 2015.
$418 million is the amount Governor Andrew Cuomo wants New York City to commit to the Subway Action Plan, the emergency plan to address repairs to the distressed subway system. Politico NY senior reporter Dana Rubinstein discusses this and other pressing transit issues.
New York City taxpayers contribute over $1 billion annually to union-administered benefit funds, which often suffer from excessive administrative costs, unnecessary reserves, and mismanagement. Consolidating these benefits under the City's health insurance program and utilizing a centralized cafeteria plan could improve efficiency and generate significant savings for the city budget.
Recommendations related to City Budget
The Office of the Comptroller should give higher priority to auditing benefit funds based on risk factors like excessive administrative expenses or unnecessary reserves.
The City should develop corresponding benchmarks and indicators for Directive #12 that can trigger enforcement powers.
The Office of Labor Relations, in negotiation with labor unions, should expand the Comptroller’s oversight and enforcement authority to include sanctioning funds and removing officials who fail to manage benefits properly.
The City should consolidate the provision of supplementary health care benefits, such as prescription drugs, dental, and optical coverage, within the City’s health insurance program.
The City should provide non-health related benefits through a centralized cafeteria plan, allowing eligible employees to choose from a list of benefits with a limit on the dollar value.
Key Data
$1.1 billion
— Projected taxpayer contribution to 108 union-administered benefit funds in fiscal year 2018.
$163.8 million
— Estimated combined administrative and benefit savings from consolidating the purchase of pharmaceutical and other benefits.
$109.3 million
— Total administrative expenses spent by 91 benefit funds in fiscal year 2014.
8.9 percent
— Share of all benefit fund expenditures that went toward administrative expenses in fiscal year 2014.
$122.9 million
— City contribution to 27 annuity funds in fiscal year 2014.
New York City's historical budget gap-closing initiatives, known as Programs to Eliminate the Gap (PEGs), have been updated to include the Citywide Savings Programs (CSPs) implemented under Mayor Bill de Blasio. This historical overview tracks the size of these proposed savings programs in preliminary budgets dating back to 1982.
Watch the original program here . Citizens Budget Commission President Carol Kellerman sat down with Errol Louis to share some of her concerns over Mayor de Blasio’s proposed budget.
$88.7 billion is the NYC Preliminary Budget for Fiscal Year 2019, released yesterday by Mayor Bill de Blasio. City-funded expenditures are up 4.3 percent over fiscal year 2018. Wall Street Journal City Hall reporter Mara Gay joined WT[D]P to wade into the preliminary budget's details.
New York City's Fiscal Year 2019 preliminary budget continues a passive approach that fails to address potential federal tax law impacts or state budget cuts. The plan lacks additions to city reserves and relies heavily on debt service savings rather than government efficiency, while spending growth continues to outpace inflation.
Recommendations related to City Budget
The Mayor should limit spending growth, bolster the savings plan, and add to reserves.
The City must contain spending growth to attain fiscal stability.
The City should build reserves to prepare for future financial challenges.
The City must adapt the capital plan to a resource-constrained environment.
The City needs to strengthen finances at the New York City Housing Authority (NYCHA) and NYC Health+Hospitals (H+H).
New York City's capital planning and spending during the Bloomberg administration resulted in significant asset growth but relied heavily on debt and lacked consistent maintenance policies. The next administration should implement a 'fix it first' strategy, improve asset management, and reform contracting practices to ensure fiscal responsibility and better infrastructure outcomes.
Recommendations related to City Budget
The next administration should enact clear guidelines or directives for performing routine maintenance and regular replacement of assets.
All city agencies and component units should undertake a comprehensive needs assessment that details the condition of major asset classes and the cost to fix those in disrepair.
The needs assessment should be used to develop a plan to achieve state of good repair that includes a detailed timeline with four-year and ten-year goals.
The next mayor should articulate a standard for keeping debt from becoming unaffordable.
The City should adopt a 'fix it first' strategy, in which state of good repair projects receive priority at each agency.
The City should renew its Project Labor Agreements to reduce labor costs and improve managerial flexibility.
City leaders should advocate for changes to contracting rules, including a repeal of Wicks Law and an expansion of the city’s toolbox for effective contracting.
Key Data
$100 billion
— The amount of debt outstanding held by the City.
$123 billion
— The total amount spent on capital projects under Mayor Bloomberg after adjusting for construction cost changes.
$87.7 billion
— The value of assets owned by New York City and its related public authorities as of fiscal year 2013.
$6.4 billion
— The amount of state of good repair requirements reported in the Asset Information Management System in fiscal year 2014.
$3.2 billion
— The projected cost to complete the Croton Water Filtration Plant.
$4.5 billion
— The stated funding gap for the resiliency and mitigation plan.
New York taxpayers could lose as much as $14.3 billion in federal tax deductions because of the capping of the state and local tax deduction in the new federal tax law. NYS Budget Director Robert Mujica and NYC First Deputy Mayor Dean Fuleihan discuss the potential impact and possible responses…
The federal tax overhaul passed last month may have enormous impacts in New York and could upend the relationship between the federal government and the states. CBC and the CUNY Graduate School of Journalism gathered experts to assess the impact and potential city and state responses in a special half-day…
NYC Health + Hospitals faces a projected baseline financial gap of $1.9 billion in fiscal years 2020 and 2021, driven by a growing reliance on city subsidies that reached $1.8 billion in 2016. To achieve fiscal stability, the system must implement aggressive cost containment and shift the burden of uninsured outpatient and psychiatric care more broadly across the city's healthcare market.
Recommendations related to City Budget
A strategy for improving H+H finances may require shifting selected services, notably uninsured outpatient visits, from the public to the private sector.
The source of fiscal stress from uninsured clinic visits can and should be shared more widely within the health care system.
Decreasing the concentration of psychiatric patients in H+H would potentially improve their care and enable H+H to improve its operations.
H+H likely will have to do more cost containment than was evident in Los Angeles.
Attention can be given to improving the outpatient payor mix.
Key Data
$607 million
— City subsidy to H+H in fiscal year 2011
$1.8 billion
— City subsidy to H+H in fiscal year 2016
$1.9 billion
— Projected baseline financial gap for H+H in fiscal years 2020 and 2021
$748 million
— Expenditure reduction target for H+H in fiscal year 2021
$1.1 billion
— Revenue raising initiative target for H+H in fiscal year 2021
$20,170
— Average cost per discharge at an H+H facility in 2015
New York City's fiscal monitors generally project a stable economic outlook, though these assessments overlook significant potential risks from federal and state policy changes. The Office of Management and Budget projects budget gaps of $3.2 billion, $2.3 billion, and $1.6 billion for fiscal years 2019 through 2021, figures that face uncertainty from expenditure risks such as overtime and homeless services.
Key Data
$700 million
— Revenue from new taxi medallions considered at risk over the financial plan period.
$500 million
— Annual revenue risks identified by the State Comptroller for fiscal years 2019 through 2021.
$75 million to $150 million
— Amount by which all monitors believe overtime expenditures are underestimated.
$125 million and $142 million
— Forecasted cost increase for homeless services.
$165 million
— Potential loss in reimbursement for fringe benefits and judgments and claims for New York City Health + Hospitals.
$3.2 billion, $2.3 billion, and $1.6 billion
— Budget gaps projected by the Office of Management and Budget for fiscal years 2019, 2020, and 2021 respectively.
New York City's economic development efforts, which cost $3.2 billion in 2016, require more rigorous management and cost-effectiveness to ensure public funds are used efficiently. While some progress has been made in targeting conduit financing and evaluating tax expenditures, further reforms are needed regarding discretionary tax benefit standards and program transparency.
Recommendations related to City Budget
Make as-of-right tax expenditures more cost-effective with continued reform.
Create more detailed standards for awarding discretionary tax expenditures.
Make capital investments in infrastructure to support job growth in underdeveloped neighborhoods.
Manage EDC programs with a focus on job creation and improving transparency.
Use conduit financing to support growth in the arts, health, and educational sectors.
Key Data
$3.2 billion
— The annual cost of the City’s economic development efforts in 2016.
$2.0 billion
— The portion of the 2016 economic development cost attributed to tax expenditures.
$622 million
— The amount of capital spending on economic development in 2016.
$534 million
— The operating costs for SBS, EDC, and various LDCs in 2016.
$8.9 billion
— The collective amount of conduit debt outstanding in 2016.
20 percent
— The goal for the share of jobs in innovation industries by 2040.
NYCHA's capital needs have grown significantly, with the 2011 assessment identifying $16.5 billion in required improvements and the forthcoming assessment expected to exceed $25 billion. Despite these massive requirements, the 2012-2016 capital plan totaled only $2.4 billion, leaving a substantial funding gap that is exacerbated by aging infrastructure and damage from Superstorm Sandy.
Key Data
$16.5 billion
— The total cost of bringing the system to a state of good repair identified in the 2011 Physical Needs Assessment.
$25 billion
— The likely amount of capital needs in the forthcoming Physical Needs Assessment, which dwarfs available resources.
$3 billion
— The estimated damage caused to the system by Superstorm Sandy.
$1.7 billion
— The amount spent on capital improvements between 2012 and 2016.
$2.4 billion
— The total size of the 2012-2016 five-year capital plan.
$1.6 billion
— The total federal capital subsidies received from 2006-2010.
Tax Increment Financing (TIF) allows municipalities to fund infrastructure projects by capturing future property tax revenue, but it carries significant risks if projects fail to generate the projected economic growth. To protect taxpayers, governments should rigorously evaluate whether a project truly requires public incentives, whether it will generate net new economic activity, and if the potential returns justify diverting funds from other essential services.
Recommendations related to City Budget
Governments should determine if the project passes the "but for" test, ensuring that development would not occur without the TIF-funded capital improvements.
Policymakers must assess whether the investment will generate new economic activity or simply shift existing activity from elsewhere in the region.
Officials should evaluate if the project’s expected return on investment is strong enough to justify diverting revenue from other prospective capital needs.
Cities must analyze whether the district will generate sufficient revenue to repay debt service and other costs, and establish a plan for covering potential shortfalls.
Governments should consider whether general obligation bonds are a better, less risky option than TIF bonds for financing the project.
Policymakers should implement strong transparency provisions to help protect future taxpayers against the risks associated with TIF projects.
Key Data
$3 billion
— The projected cost of the Hudson Yards project.
$359 million
— The amount New York City paid from its general fund to subsidize Hudson Yards’ interest payments after the Great Recession.
$266 million
— The amount of capital cost overruns incurred by the Hudson Yards project.
$14 million
— The amount of TIF debt the Troy Downtown Development Authority in Michigan defaulted on.
$75.4 million
— The total outstanding Pilot Increment Financing (PIF) debt in New York as of June 2017.
$10 million
— The amount that a majority of Chicago's TIF districts raised and spent over a 13-year period.
$26 billion is the amount of property taxes the City will collect this fiscal year-- it is the largest single source of revenue that funds NYC government. Special guest Martha Stark is a former Commissioner of the Department of Finance. She joined the podcast to discuss the complexities of the…
The November 2017 Financial Plan for New York City reflects a cautious approach that fails to account for potential economic slowdowns or federal policy uncertainties. While outyear budget gaps have been reduced by up to $708 million, these improvements rely on technical adjustments like debt service re-estimates rather than structural efficiency savings.
Key Data
$187 million
— Projected decrease in revenues for the current fiscal year.
$187 million
— Decrease in outyear budget gaps for fiscal year 2018.
$708 million
— Decrease in outyear budget gaps for fiscal year 2021.
44 is the number of days left in term-limited Council Member Daniel Garodnick's tenure. Council Member Garodnick has been a voice of reason in the City Council, having raised important questions about the city budget, economic development, and contracts. He chairs the City Council's Committee on Economic Development, is on…
95 is the number of days remaining in the second term of City Council Member Julissa Ferreras-Copeland. Julissa is the first woman, first person of color, and the youngest person to chair the Council’s powerful Committee on Finance, which oversees the adoption of the City’s $85 billion annual budget. This…
This week's data point is 30% - the share, based on dollar value, of city contracts to be awarded to minority- and women-owned businesses by fiscal year 2021, according to a goal set by Mayor Bill de Blasio in September 2016. New York City Deputy Mayor Richard Buery joins the…
CBC's Vice President Maria Doulis and Howard Cure of Evercore Wealth Management discuss New York City's finances, transportation issues, and its relationship with NY State with the Bond Buyer's Northeast Regional Editor Paul Burton.
New York City has significantly increased spending on preventive services for children, reaching $313 million in the fiscal year 2018 budget, yet current reporting fails to demonstrate whether these investments effectively reduce foster care placements or child maltreatment. Future funding increases should be contingent upon the implementation of rigorous, outcome-based performance metrics to ensure these services actually achieve their intended goals.
Recommendations related to City Budget
Further investment in preventive services should be contingent upon a more thorough public reporting on outcomes.
The City Council should work with the Administration for Children’s Services to expand the required indicators for preventive services to measure outcomes rather than just outputs.
The Administration for Children’s Services’ performance should be evaluated consistently, using data and metrics, rather than in response to headlines of tragic cases.
Key Data
$313 million
— Projected spending on preventive services in the New York City Fiscal Year 2018 Adopted Budget for the Administration for Children’s Services.
42 percent
— Increase in spending on preventive services from Mayor Bill de Blasio’s first year in office.
28 percent
— Planned increase in service capacity for preventive slots in fiscal year 2019, from 12,500 to 16,000.
17.0 percent
— Repeat substantiated maltreatment rate in the last 8 years, which significantly exceeds the New York State target of 7 percent.
$125 per day
— Average daily cost per child in foster care in fiscal year 2015.
$24 per child per day
— Average daily cost per child in preventive services in fiscal year 2015.
New York City's uniformed overtime spending has grown significantly, reaching $1.7 billion in fiscal year 2016, and consistently exceeds the adopted budget by an average of 42 percent. To address this fiscal challenge, the City should implement structural reforms, including labor-management committees, caps on overtime earnings, and changes to sick leave and work rules.
Recommendations related to City Budget
The City should establish a uniformed labor-management committee as part of the next round of collective bargaining to study the drivers of overtime and propose efforts to reduce costs.
The City should adopt a system in which routine sick leave usage is accrued and capped, similar to the system for civilian employees, to provide greater oversight.
The City should institute a per employee cap on overtime hours or overtime earnings, as currently exists for civilian employees.
The City should cap or eliminate overtime earnings in calculating final average salary for pensions to reduce long-term fiscal incentives for overtime.
The City should change certain work rules, such as eliminating overtime for travel to alternate work locations and guaranteed minimum overtime hours, to reduce unnecessary expenditures.
Key Data
$1.7 billion
— Total overtime spending in fiscal year 2016.
42%
— Average amount by which overtime has exceeded the adopted budget in each of the past nine years.
$19,400
— Average overtime compensation paid per uniformed employee in fiscal year 2016.
$1.4 billion
— Overtime expense included in the Adopted Fiscal Year 2018 budget.
62%
— Growth in overtime spending from fiscal year 2009 to fiscal year 2016.
$1.8 billion
— Projected overtime spending for fiscal year 2017 as of June 2017.
The Metropolitan Transportation Authority has prioritized system expansions over necessary capital improvements, leaving the subway system in a state of disrepair despite significant available funding. To address long-term needs, the agency should shift its funding framework to rely more heavily on motorist cross-subsidies, such as congestion pricing, rather than increasing the tax burden on New York City residents.
Recommendations related to City Budget
These uncommitted funds, and funds in the current 2015-2019 capital program can and should be re-tasked to work that can accelerate the process of bringing the subway to a state of good repair.
The MTA, and policymakers, should pursue a different funding framework for the transit agency, one that recognizes three types of revenue to support mass transit: fares, tax subsidies, and motorist cross-subsidies.
The MTA should seek additional motor vehicle use charges to cross-subsidize transit.
The MTA and its workforce should more aggressively pursue efficiencies at the agency to make the stabilization plan self-sustaining.
A cooperative arrangement between MTA management and the Transport Workers Union could provide significant productivity savings to help cover the cost of the added workers.
The funding stream or streams to support these long-term needs ought to come from motorists, either from congestion pricing or other charges for motor vehicle use.
Key Data
$16.1 billion
— The amount of continuing needs for the subway listed in the 20-year needs assessment.
$12.7 billion
— The amount of state of good repair and normal replacement investments included in the originally approved 2015-2019 capital plan.
$4.8 billion
— The amount included in the 2015-2019 capital plan for system expansions.
$835 million
— The amount the City contributed in operating subsidies for the MTA in 2016.
$4.7 billion
— The total of 'City' contributions to the MTA in 2016, including operating subsidies, capital contributions, and debt service.
2,700
— The number of permanent new workers the MTA stabilization plan supports hiring.
The New York City Housing Authority has improved its financial position through increased city and federal support, allowing it to achieve a surplus in 2015 and 2016. However, the agency's budget remains precarious due to potential federal funding cuts, necessitating more aggressive implementation of its long-term strategic reforms to ensure future stability.
Recommendations related to City Budget
NYCHA should ease work rule restrictions in the upcoming collective bargaining negotiations.
The Authority should come to an agreement for rent payment by non-profit tenants in NYCHA buildings.
The City should support NYCHA’s proposal to raise parking fees to market rates.
NYCHA should lobby the federal government against onerous changes to public housing operating and capital subsidies.
Key Data
$171.8 million
— The surplus achieved by NYCHA's public housing operations in 2015.
$36 million
— The surplus achieved by NYCHA's public housing operations in 2016.
$1.1 billion
— The cost of personnel for operating public housing in 2016, representing half of total operating costs.
$519 million
— The total utility costs for NYCHA in 2016, which fell by 9 percent.
$19.6 million
— The projected operating deficit for NYCHA by 2019.
$56.8 million
— The projected operating deficit for NYCHA by 2021.
Vice President Maria Doulis discusses issues such as New York State and local tax deductions, New York City’s $85 billion fiscal plan for 2018, and the inequity of New York City’s real estate property tax system. Original video can be found here .
New York City's addition of $1.9 billion in capital funding for affordable housing lacks necessary transparency regarding program specifics, productivity benchmarks, and per-unit cost estimates. Without updated spending reports and clear metrics, it is impossible to evaluate whether the city's housing plan is deploying capital in a cost-effective manner.
Recommendations related to City Budget
The City should include productivity benchmarks in the Ten-Year Capital Strategy to enable accurate estimation of unit financing and costs.
The City should increase the financial transparency of the affordable housing plan by regularly updating the public on spending progress.
The City should include information on program usage and subsidy values in its project database to allow for the evaluation of cost-effectiveness.
Key Data
$1.9 billion
— additional capital funding added to the City's capital plan in the Executive Budget for affordable housing.
$41 billion
— total public and private funds over 10 years required for the Housing New York plan.
$6.7 billion
— City capital funding allocated for the Housing New York plan over 10 years.
62,506
— affordable units financed through the end of 2016.
200,000
— planned units in the ten-year affordable housing plan.
New York City's fiscal year 2018 budget of $87.3 billion includes increased reserves and retiree health benefits, yet spending and headcount continue to rise despite a partial hiring freeze. The city faces rising compensation costs and looming labor negotiations, necessitating a focus on operational efficiencies and health insurance contribution reforms to manage future fiscal uncertainty.
Recommendations related to City Budget
Regular deposits to the Retiree Health Benefit Trust should be considered, and efforts to grow the fund should be guided by standards for deposits and withdrawals.
Any additional raises for labor contracts should be paid for with productivity gains, which also necessitate settling the contracts promptly.
The next round of labor negotiations should build on the savings generated from the City’s partnership with the Municipal Labor Committee.
Health insurance contributions from employees and retirees should be on the table during negotiations.
Agencies need to step up efforts to make their operations more cost-effective by implementing efficiencies.
The City should limit new spending and achieve more savings, tax reductions, and reserves.
Key Data
$87.3 billion
— The Adopted Budget for Fiscal Year 2018, adjusted for prepayments and reserves.
3.4 percent
— Spending growth over the fiscal year 2017 projected budget of $84.5 billion.
$4.2 billion
— The surplus the City expects to end fiscal year 2017 with, to be used to prepay fiscal year 2018 expenses.
329,055
— The expected headcount in fiscal year 2018 despite the hiring freeze.
$160,000
— The projected average compensation per employee by fiscal year 2021.
1 percent
— The annual raise amount the City budget has put aside funds for in upcoming labor negotiations.
The Open Budget Act proposes requiring the Office of Management and Budget to publish key budgetary documents on the city's website and the 'NYC OpenData' portal in machine-readable formats. This legislation aims to enhance transparency and accountability by ensuring the public and watchdogs have easier access to essential financial and performance data.
Recommendations related to City Budget
Add the Preliminary and Final Mayor’s Management Reports, produced by the Mayor’s Office of Operations, to the list of documents that should be available on these platforms so as to facilitate the link between agency performance and budgeting.
Require the Office of Management and Budget to make public a document reporting prior fiscal year actual spending in a format similar to the Supporting Schedule, providing data by agency, unit of appropriation and budget code.
New York City recently adopted an $85.2 billion budget. What are the largest aspects of spending, the most contentious parts of the budget deal, and the risks ahead?
The Fiscal Year 2018 Executive Budget faces economic uncertainty, necessitating fiscal prudence through increased efficiency savings, restrained spending growth, and improved capital planning. To ensure long-term stability, the city should prioritize bolstering reserves, curbing new initiatives, and securing productivity gains in upcoming labor negotiations.
Recommendations related to City Budget
The city should require productivity gains in exchange for raises during upcoming labor negotiations to ensure fiscal responsibility.
The administration should increase efficiency savings by making agency participation in the Citywide Savings Program mandatory.
The city should improve the capital planning process by better assessing capital needs and including metrics to evaluate performance.
The administration should restrain spending on new initiatives by postponing or curbing non-essential programs given the uncertain economic climate.
The city should direct savings to bolster reserves to reach levels sufficient to weather a potential recession.
Key Data
$1.1 billion
— The total cost of city-funded new needs in fiscal year 2018.
$1.3 billion
— The amount overtime costs are budgeted to exceed in fiscal year 2018.
$1.25 billion
— The current annual level of the city's reserves.
$400 million
— The amount that would be saved each year if efficiency savings reached 1 percent of city-funded agency budgets.
8.1 percent
— The projected annual growth rate for health insurance costs from fiscal years 2018 through 2021.
$4.0 billion
— The amount of assets currently held in the Retiree Health Benefit Trust.
New York City's Ten-Year Capital Strategy, while demonstrating administration priorities, suffers from unrealistic timelines that frontload spending and lacks clear programmatic indicators to measure progress. The city should improve transparency by aligning capital commitments with actual execution capacity and linking spending plans to specific infrastructure needs.
Recommendations related to City Budget
The City should adjust its strategy to acknowledge more appropriate commitment levels at the end of the ten-year period.
The Administration should work with the City Council to release a September Commitment Plan that reflects a more realistic allocation over the first four years.
The Administration should incorporate this rebalancing in future capital strategies.
The Strategy should clearly relate back to these statements of needs so that the City and the public can determine whether or not planned capital investment is adequate.
The Strategy should include other benchmarks to measure progress toward the project’s completion.
The City should include indicators such as the number of units expected to be rehabilitated or components fixed in the Strategy.
Key Data
$95.8 billion
— Planned commitments in the Executive Ten-Year Capital Strategy for Fiscal Years 2018-2027.
$20.7 billion
— Expected commitments in fiscal year 2018.
$51 billion
— Investments to keep assets in a state of good repair.
$20 billion
— Dedicated toward programmatic replacement of water and sewer components, public building components, vehicles, and equipment.
$1.9 billion
— Additional subsidy for 10,000 housing units.
$808 million
— Additional commitment to energy efficiency and sustainability retrofits.
New York City's workforce is projected to grow by over 31,000 employees between fiscal years 2014 and 2018, contributing to rising personnel costs. Average compensation for city workers reached $76,064 in 2016, with fringe benefits pushing the total average compensation per employee above $140,000.
Key Data
31,000
— City headcount is projected to increase by more than 31,000 from FY 2014 to FY 2018.
$140,000
— Fringe benefit costs increase average compensation to more than $140,000 per employee.
$76,064
— The average city worker was paid $76,064 in FY 2016.
331,605
— The total city headcount is projected to reach 331,605 by FY 2021.
The School Bus Grant Program, which provides supplemental funding to private bus companies to increase employee wages, undermines competitive bidding processes and increases city costs without providing additional benefits to taxpayers. The City Council should defund this program in upcoming budget negotiations to ensure the city adheres to fairly awarded contracts and avoids unnecessary expenditures.
Recommendations related to City Budget
The City Council should defund the School Bus Grant Program in the upcoming budget negotiations.
The city should abide by contracts that it has fairly and competitively awarded.
The City Council should step in, on behalf of taxpayers, and bring the School Bus Grant Program to a stop.
The administration should seek to renegotiate contracts at the appropriate time rather than awarding grants to increase payments to for-profit companies.
The city should not award grants to increase payments to for-profit companies that have already sought to provide a service for the previously specified amount.
Key Data
$1 billion
— Annual cost of school-bus transportation contracts prior to re-bidding.
$400 million
— Savings achieved by re-bidding school-bus transportation contracts without previous employee protections.
$30 million
— Projected cost of the School Bus Grant Program for the third year.
In fiscal year 2016, New York City's 283,000 full-time employees earned an average total pay of $76,064, with compensation varying significantly between uniformed, civilian, and pedagogical staff. Uniformed employees earned the highest average annual pay at $109,000, largely driven by substantial overtime and other additional payments.
Key Data
283,000
— Active full-time employees on New York City’s payroll in fiscal year 2016.
$76,064
— Average total pay for active full-time employees in fiscal year 2016.
$109,000
— Average annual pay for uniformed employees.
$66,500
— Average annual pay for civilian employees.
$70,000
— Average annual pay for pedagogical employees.
$10,000
— Average annual overtime for civilians in agencies including the Departments of Transportation, Correction, Citywide Administrative Services, and Fire.
New York City's capital construction process for libraries and cultural institutions is plagued by excessive delays and high costs, with projects often taking years longer and costing significantly more than those managed by the institutions themselves. The current system, characterized by complex multi-agency approvals, outdated procurement laws, and ineffective budgeting, requires fundamental reform to ensure that limited capital funds are used efficiently and effectively.
Recommendations related to City Budget
The mayor should convene a task force to examine the current capital construction approval and management system, ensuring that representatives of the city’s libraries and cultural institutions are at the table.
The city should leverage its existing Capital Projects Dashboard and expand it to systematically track the real costs and timelines of all capital construction projects, including DDC-managed projects and those managed by other agencies.
OMB should streamline project approval practices and reduce redundancies between OMB and DDC to avoid the current year-long wait times for approvals.
DDC should work with other relevant departments to simplify the design review process and establish achievable timetables for feedback and approval.
The city should fund an expanded agency-wide data and analytics team within DDC to analyze cost trends, predict potential overruns, and flag potential cost savings.
The city should institute a process for nonprofits to prequalify for discretionary capital funds to ensure they are equipped to manage major initiatives.
The Mayor’s Office should establish dependable funding for capital construction projects, including routine state-of-good-repair investments, to allow for long-term planning.
OMB should standardize and disseminate capital eligibility rules and requirements by creating a handbook that provides an easy-to-understand summary of all rules.
The city should allow appropriate capital projects to be contracted through a design-build process to reduce delays and control costs.
City agencies should expand the use of pass-through project management for libraries and large cultural organizations to reduce the burden on city agencies.
Key Data
144
— Number of DDC-managed capital projects at cultural institutions and libraries analyzed from fiscal years 2010 to 2014.
$930
— Median cost per square foot for new library and cultural buildings in the sample.
1,550
— Median number of days it took for a project to complete.
$523
— Average cost per square foot for new NYPL branches managed by the library itself.
$883
— Average cost per square foot for new NYPL branches managed by the DDC.
$1,272
— Average cost per square foot for ground-up construction projects managed by the city.
The Fair Fares proposal, which aims to provide discounted transit passes to low-income residents, is a reasonable policy that should be funded by New York City rather than through fare hikes or state revenue. At an estimated cost of $212 million, this initiative represents a small fraction of the city's $84.7 billion operating budget and aligns with broader goals to reduce income inequality and promote economic mobility.
Recommendations related to City Budget
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 Fair Fares policy, it should be a priority that is accommodated within the city’s financial plan.
A broad tax base that draws resources from all wealthier New Yorkers should back the commitment to broader opportunity rather than subsidizing services to the poor with higher fares for other riders.
Key Data
$212 million
— Estimated cost of the Fair Fares proposal in foregone fare revenue.
$84.7 billion
— Total operating budget of New York City.
$1 billion
— Annual operating funds provided by the city to the MTA.
$1,452
— Annual cost of a monthly MetroCard for a single worker.
$100 million
— Annual cost to the city for discounted MetroCards for students and senior citizens.
$130 million
— Yearly cost for the city to subsidize paratransit for disabled users.
New York's requirement for local governments to fund a significant portion of Medicaid costs creates an inequitable financial burden on less affluent counties and reduces incentives for cost containment. To address this, the state should phase out local funding responsibilities over four to five years, shifting the full cost to the state to better align with fiscal realities and improve program efficiency.
Recommendations related to City Budget
The state should take steps to fix a long-standing problem with how it pays for the program: its unusual requirement for substantial local government financing.
The State should assume responsibility for the local share liability over a period of four or five years.
Eliminating the local funding requirement would significantly improve the way New York State finances its Medicaid program.
Full state financing is the best way to achieve continued cost control in a program fully controlled by the State.
Key Data
$7.1 billion
— Amount New York's counties will pay for Medicaid in state fiscal year 2012.
$6.5 billion
— Amount New York's counties paid for Medicaid in fiscal year 2008.
$4.6 billion
— Total local payments for Medicaid in New York City in fiscal year 2008.
$555
— Per capita Medicaid cost in New York City in fiscal year 2008.
$11.07
— Medicaid cost per $1,000 of personal income in New York City in fiscal year 2008.
$7 billion
— New costs that would be required by full state assumption of the local Medicaid share.
ABNY Power Breakfast participants discuss the potential impact of proposed federal policies on the New York budget and the overall economy. Maria Doulis , Vice President, Citizens Budget Commission. Moderator Dean Fuleihan , Director, Mayor's Office of Management and Budget Latonia McKinney , Director, NYC Council Finance Division Preston Niblack , Deputy…
New York City's financial plan relies on $1.2 billion in projected revenue from future taxi medallion sales, despite a significant decline in medallion values caused by the rise of ride-sharing services. Given the market instability and the sharp drop in private transfer prices, the city should remove these unrealistic revenue projections from its budget until the industry stabilizes.
Recommendations related to City Budget
The City should adjust its budget assumptions to reflect this situation, with the most prudent action being removing this revenue from its financial plan until the industry stabilizes.
Trends in the industry suggest the City should, at a minimum, adjust its assumptions for how much can be earned from future sales.
A more prudent action is to remove the revenue from the financial plan until a more stable and realistic basis can be identified for the value of any future auctions.
Key Data
$1.2 billion
— Revenue expected from the sale of new taxi medallions from fiscal years 2019 to 2023.
$359 million
— Revenue generated from the auction of 350 medallions during fiscal year 2014.
$1.1 million
— Average winning bid for a corporate medallion during the 2014 auctions.
$480,000
— Average price of independent medallions in 2016 private transfers.
$600,000
— Average price of corporate medallions in 2016 private transfers.
$731 million
— Revenue included in the financial plan from taxi medallion sales during fiscal years 2019 to 2021.
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, driven largely by rising shelter costs and expanded prevention and re-housing initiatives. Despite official projections suggesting a decrease in future spending, historical trends of growing caseloads suggest that costs will likely continue to rise without clear milestones for sustainability.
Recommendations related to City Budget
The Administration should address how much more growth in the homeless population served is actually anticipated to better manage service expectations.
The Administration must provide milestones against which to measure progress towards more sustainable spending.
Any new strategy for service redesign or expansion 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 cost of preventive services in fiscal year 2017.
$216 million
— Total cost of housing voucher programs in fiscal year 2017.
$80.5 million
— Total spending on services for the street homeless in fiscal year 2017.
The de Blasio Administration identified $3.8 billion in savings for fiscal years 2017 through 2021, yet less than 10 percent of these savings stem from actual improvements in government efficiency. To better manage budget risks, the city should prioritize recurring productivity gains rather than relying on debt service savings and re-estimates to meet its financial goals.
Recommendations related to City Budget
To serve as a meaningful hedge against budget risks, all of the $500 million in additional savings should come from improving government productivity in ways that generate recurring savings.
City agencies should be required to identify efficiency improvements to generate the next $500 million in savings promised by the Administration.
Key Data
$3.8 billion
— Total savings identified by the de Blasio Administration to be achieved in fiscal years 2017 to 2021.
9.7%
— Portion of the $3.8 billion in savings that comes from improving the efficiency of government operations.
$500 million
— Additional savings the Office of Management and Budget has committed to finding for the Executive Budget.
$366 million
— Total efficiency savings identified in the Citywide Savings Program, comprising less than 10 percent of the total.
1.1%
— Total savings as a percentage of city-funded expenditures.
The program providing grants to school bus transportation companies to maintain employee wages and benefits undermines the integrity of the City's competitive bidding process. This supplemental funding, which was intended to be a one-time grant, has been renewed for a third year and should be discontinued to prevent setting a precedent for other vendors.
Recommendations related to City Budget
The administration should discontinue the program that provides grants to companies that provide school bus transportation.
New York City's fiscal year 2018 preliminary budget reaches a record $87.1 billion, marking a 17 percent increase from the previous administration's final budget. While the spending growth supports policy initiatives like pre-kindergarten and affordable housing, the city must address rising costs associated with homelessness and agency overtime by focusing on improved management and efficiency.
Recommendations related to City Budget
More should be done to better manage a range of municipal services.
The upcoming deliberations with the City Council should focus on how to better manage agencies with significant expenditure growth.
Key Data
$87.1 billion
— Total spending in the fiscal year 2018 preliminary budget.
17 percent
— Increase in spending from Mayor Michael Bloomberg’s last budget.
327,000
— Total municipal employment level.
9 percent
— Increase in municipal employment since January 2014.
18 percent
— Portion of the Citywide Savings Plan comprised of efficiency measures.
The New York City preliminary budget for fiscal year 2018 faces significant fiscal pressures, including a homeless shelter census exceeding 60,000 people and $17 billion in unmet capital needs for the New York City Housing Authority. These challenges raise critical questions about the sustainability of current funding levels, such as the $1.5 billion allocated for shelter in fiscal year 2017 and the $1.1 billion projected for future years.
Key Data
60,000
— The number of people in the homeless shelter census.
$1.5 billion
— The amount budgeted for homeless shelter funding in fiscal year 2017.
$1.1 billion
— The amount assumed for homeless shelter funding in years subsequent to fiscal year 2017.
$17 billion
— The amount of unmet capital needs for the New York City Housing Authority.
The New York City Teachers' Retirement System's Tax Deferred Annuity (TDA) fixed return fund guarantees a 7% return, costing taxpayers $1.2 billion annually due to the gap between this guarantee and actual market rates. This arrangement creates a significant financial burden and risks the viability of the pension system by leveraging assets, necessitating reform through state legislation.
Recommendations related to City Budget
The most direct way to make the change would be to eliminate the TDA and transfer its assets and participants to OLR’s plan.
A more gradual change would be to require only newly hired teachers to use the OLR plan, but to reform the TDA plan serving current teachers and retirees.
The fixed income option should be converted to choices comparable to those offered in the OLR plan – a government bond fund and a corporate bond fund with returns based on prevailing interest rates.
The current arrangement should be changed before the downside risks materialize and create a crisis.
If the city’s elected leaders and taxpayers want to provide teachers, and other municipal employees, with a more secure investment option for their deferred compensation than is available in the OLR plans, they should consider the approach used by the federal government.
Key Data
$1.2 Billion
— Annual cost to New York City taxpayers for the TDA fixed return guarantee.
7%
— Guaranteed investment return rate for the TDA fixed fund for most participants.
$18.7 Billion
— Amount of money in the TDA fixed fund in 2015.
36%
— Taxpayer subsidy in 2015 as a percentage of the total taxpayer contribution to the TRS QPP.
$4.5 Billion
— Potential loss on investments the QPP would have to make good on if the market declined by 24.3 percent.
The Metropolitan Transportation Authority's Access-A-Ride paratransit program is an expensive service that cost $461 million in 2015, with expenses projected to reach $621 million by 2020. To improve efficiency and reduce the heavy reliance on internal cross-subsidies from regular transit riders, the agency should implement strategies such as shifting ambulatory trips to lower-cost providers, increasing the use of feeder services, and seeking Medicaid reimbursement for eligible medical trips.
Recommendations related to City Budget
The MTA could shift ambulatory customers to its broker car service (BCS) program, which uses for-hire vehicles, to save the MTA up to $126 million annually.
The MTA could provide service more efficiently by offering a subsidy program that allows paratransit users the opportunity to use the City’s taxicab fleet and Transportation Network Companies like Uber and Lyft.
The MTA could consider an overhaul of the contracting relationships by altering its service design and contracting a single, full-service broker to consolidate multiple management layers.
The MTA should revisit the policy of doubling paratransit fares, which could save as much as $184 million annually by reducing trips and increasing fare revenue.
The MTA should increase the use of feeder service, which connects users with accessible fixed-route stops, as increasing this share to 5 percent could save up to $20 million annually.
The MTA should seek Medicaid reimbursement for non-emergency medical transport, as reforming federal and state policies to allow this reimbursement could generate significant annual revenue.
Key Data
$461 million
— The cost of the Access-A-Ride program in 2015.
$621 million
— The projected total program expenses for Access-A-Ride in 2020.
$126 million
— The potential annual savings from moving all ambulatory customers to the broker car service program.
$184 million
— The potential annual savings from doubling paratransit fares.
$71
— The cost per trip for Access-A-Ride in 2014, which was the highest in the nation.
$20 million
— The potential annual savings from increasing the share of feeder service trip requests to 5 percent.
The Bond Buyer Maria Doulis of the watchdog Citizens Budget Commission and Howard Cure of Evercore Wealth Management dissect New York City’s $82 billion budget with Bond Buyer Northeast regional editor Paul Burton. They explore efficiencies, debt management, reserves, the economy, the capital budget and Mayor Bill de Blasio’s plan…
Legacy costs, including debt service, pensions, and retiree health benefits, are consuming a growing portion of the New York City budget and are projected to exceed $20 billion by fiscal year 2020. To mitigate this growth, the city should implement reforms to retiree health benefits, such as requiring premium contributions, consolidating union welfare funds, and eliminating Medicare Part B reimbursements.
Recommendations related to City Budget
City-MLC negotiations should focus on reducing health care costs further and bringing retiree health costs in line with those of other state and local governments.
Retirees should share the cost of health premiums.
Reform of union welfare funds is needed.
Consolidating supplementary health care benefits under the city’s health plan would be more efficient.
Medicare Part B premium reimbursements should be eliminated.
Key Data
$20 billion
— Annual spending on legacy costs projected by fiscal year 2020.
20 percent
— Portion of the New York City budget claimed by legacy costs.
$17.4 billion
— Legacy costs in fiscal year 2016.
$20.9 billion
— Legacy costs projected for fiscal year 2020.
$6.1 billion
— Debt service for the City’s debt obligations in fiscal year 2016.
$8.4 billion
— Debt service for the City’s debt obligations by fiscal year 2020.
Municipal employee compensation in New York City is rising rapidly, with average costs per full-time employee projected to reach $158,000 by 2020, contributing to an $11.7 billion increase in total spending. The city's practice of fully funding health insurance premiums for employees and retirees without requiring contributions is a significant driver of these costs and creates a $70 billion liability.
Recommendations related to City Budget
The city government should require employees and retirees to contribute to their health insurance premiums to align with private and public sector standards.
Key Data
$11.7 billion
— increase in spending through fiscal year 2020 from the time the mayor and Council members were elected in 2014
$137,000
— average compensation per year per full-time employee
$158,000
— projected average compensation per year per full-time employee by 2020
$53,000
— median household income in 2014
$70 billion
— liability for retiree health insurance costs and other post-employment benefits
$2.1 billion
— savings realized through fiscal year 2017 from health cost initiatives
Mayor de Blasio's financial plan projects a $17.9 billion increase in spending through fiscal year 2020, driven primarily by rising personal service costs, including salaries, wages, and health insurance. While the pace of expenditure growth is slower than the first seven years of the Bloomberg administration, it is faster than the final seven years of that tenure.
Key Data
$17.9 billion
— planned spending increase from 2014 to 2020 among the major objects of expenditure.
$158,258
— compensation cost per employee in fiscal year 2020.
$2.8 billion
— planned spending increase for the Department of Education.
$669 million
— planned spending increase for the Police Department.
$8.2 billion
— debt service cost in fiscal year 2020.
$11.7 billion
— increase in personal service spending.
Tony Guida sits down with the CBC's Vice President, Maria Doulis, to discuss why New York City's mega-projects run over budget and how the public sector can build better.
New York City's financial plan includes projections for tax revenues, expenses, headcount, and debt service. It also details savings derived from the health savings agreement with the Municipal Labor Committee and the Citywide Savings Plan.
New York City faces a $70 billion liability for retiree health insurance costs, which are largely unfunded and threaten future financial stability. To address this, the city should establish explicit guidelines for the Retiree Health Benefits Trust that mandate consistent annual deposits and restrict withdrawals to special circumstances.
Recommendations related to City Budget
The city must ensure consistent contributions and a commitment to protect the gains made in the Retiree Health Benefits Trust to address the outstanding liability.
There should be explicit guidelines requiring annual deposits and limiting withdrawals from the trust only to special circumstances, such as unexpected spikes in retiree health insurance premiums.
Deposits into the trust should be calculated based on a share of the annual cost of retiree health benefits to ensure steady and predictable growth.
Mayor de Blasio and the City Council should adopt explicit guidelines for the trust as part of the imminent budget agreement.
Key Data
$70 billion
— The total liability for New York City retiree health insurance costs and other post-employment benefits.
$3.7 billion
— The projected balance of the Retiree Health Benefits Trust, representing the highest level ever.
4 percent
— The portion of the outstanding retiree health liability currently covered by the trust's resources.
$2.2 billion
— The amount depleted from the Retiree Health Benefits Trust by the City between 2010 and 2014.
$100 million
— The approximate deposit required in fiscal year 2017 if a 5 percent contribution rate were implemented.
$82 billion
— The total annual budget of New York City.
The Citywide Savings Program proposes $5.4 billion in multiyear savings, yet relies heavily on debt service reductions and spending re-estimates rather than operational efficiency. Only 16 percent of the total savings comes from agency efficiency measures, indicating a need for more strategic and creative approaches to government spending.
Recommendations related to City Budget
The administration should continue to build on the progress in the Citywide Savings Program by focusing more on efficiency initiatives.
The Citywide Savings Program's baby steps should become bolder strides to ensure government efficiency.
The City should prioritize generating savings from increasing productivity of city government rather than relying on debt refunding or spending re-estimates.
Key Data
$5.4 billion
— Multiyear savings proposed in the latest Citywide Savings Program.
$883 million
— Total savings derived from agency efficiency measures.
16 percent
— Portion of total savings coming from agency efficiency measures.
$1.5 billion
— Largest single source of savings, claimed from a reduced payment to the State for the City’s share of the Medicaid program.
$1.0 billion
— Savings derived from reductions in required debt service payments.
$1.8 billion
— Savings attributed to an amalgam of spending re-estimates, funding shifts, spending delays, and accruals.
The FDNY's current resource allocation is misaligned with its primary workload, as medical emergencies now vastly outnumber fire-related incidents. To address this inefficiency, the department should modernize its staffing models, increase medical training for firefighters, and fundamentally reorganize its service structure to better reflect actual demand.
Recommendations related to City Budget
The FDNY should apply again for permission to change ALS ambulance staffing to one paramedic and one EMT, as this change would yield about $5 million in savings that could be reinvested to expand the number of ambulance tours.
The FDNY should increase the medical training of firefighters so they can handle more situations without reliance on a separate ambulance and its staff.
The FDNY should require EMT qualifications for new applicants for firefighter jobs, which would also effectively create a career ladder for advancement among the EMS staff.
The FDNY should fundamentally reorganize the department to redefine the relationships between the two services and rebalance the financial and human resources provided for each type of service.
The FDNY should subsidize the training for all current firefighters to become EMTs, which would cost about $1,200 per person.
Key Data
$3.8 billion
— Total FDNY budget in fiscal year 2015.
$500 million
— Annual funding for EMS operations, representing just 13 percent of the total budget.
$5 million
— Estimated savings from changing ALS ambulance staffing to one paramedic and one EMT.
$1,200
— Estimated cost per person to subsidize EMT training for all current firefighters.
$6.8 million
— Estimated average annual cost of operating an engine company in fiscal year 2015.
$8.6 million
— Estimated average annual cost of operating a ladder company in fiscal year 2015.
Legislative proposals to enhance public employee and retiree benefits, such as disability payments, pension calculations, and early retirement plans, threaten to impose significant, unfunded costs on New York State and local government budgets. These measures risk undermining previous fiscal reforms that were projected to generate substantial long-term savings for taxpayers.
Recommendations related to City Budget
The Legislature should reject the bills detailed in the scorecard because they impose expensive mandates on New York State and local governments without improving services for taxpayers.
Policymakers should maintain existing reforms to employee benefits that yield significant savings rather than enacting proposals that would undermine them.
Key Data
$21 billion
— Projected savings over 30 years from reforms to disability benefits for recently hired New York City police and fire employees that would be rolled back by proposed legislation.
$46 million
— First-year cost of a bill allowing judges to use their most recent annual salary rather than a 36-month average to calculate pension amounts.
$21 million
— Annual cost to the New York City Transit Authority to decrease the employee contribution rate under the 25-year/55-age early retirement plan.
$16 million
— Annual cost to New York City to expand eligibility for variable supplement fund payments to those who retired between 1968 and 1987.
$36 million
— First-year cost of a bill enhancing in-service death benefits for State correction officers.
$13.9 million
— First-year cost of a bill enhancing in-service death benefits for State correction officers.
The fiscal year 2017 executive budget increases city-funded spending by $2.5 billion, driven by new agency allocations and debt forgiveness for the health system. While the plan maintains $1.5 billion in reserves, it relies on uncertain federal Medicaid waivers and re-estimates to achieve $1.25 billion in projected savings.
Key Data
$2.5 billion
— City-funded spending increase in fiscal year 2017 compared to fiscal year 2016.
$1.2 billion
— New agency spending added in fiscal year 2017.
$180 million
— Debt service payments forgiven for NYC Health + Hospitals in fiscal year 2017.
1.9 percent
— Projected tax revenue growth in fiscal year 2017.
$1.5 billion
— Reserves retained in the budget.
$3.7 billion
— Total balance of the Retiree Health Benefits Trust Fund.
The Department of Sanitation's operations and costs, including collection and disposal expenses and recycling and organic waste capture rates, are key components of the city's fiscal landscape. These operational metrics and their associated financial implications are essential to understanding the department's budgetary requirements.
The proposed fiscal year 2017 budget includes significant shifts in costs to New York City, including over $2.3 billion in expenses related to CUNY and Medicaid, while also proposing changes to STAR benefits and economic development funding. The budget should prioritize spending discipline and reject initiatives that lack clear economic returns or unfairly burden local governments.
Recommendations related to City Budget
The State should reject the use of settlement funds to support the operation of roads and bridges and economic development projects with unquantifiable returns on investment, instead using these funds for long-term benefits such as pay-as-you-go capital investments that replace borrowing, enhanced reserves, or accelerated debt payments.
The entire school aid funding increase should go to foundation aid, which targets aid to districts with the highest need and least ability to pay.
The authority to pursue complex contracting arrangements known as public-private partnerships should be extended to all State agencies and the City of New York.
Arbitrators should account for the full cost of a decision, including retroactive pay and the impact on fringe benefits, without increasing taxes, making service cuts, or employing fiscal gimmicks.
A moratorium should be declared on expansions in economic development spending until the benefits of existing programs can be examined carefully and unsuccessful programs terminated.
Key Data
$1.1 billion to $3.6 billion
— Projected growth of general fund budget gaps in fiscal years 2018 to 2020 without specified savings.
$2.3 billion
— Total expenses shifted from the State to New York City over three years regarding CUNY and Medicaid.
$3.4 billion
— Annual cost of the STAR program to state taxpayers.
$590 million
— Amount dedicated to capital housing projects from one-time financial settlements.
$24.2 billion
— Total school aid after a 4.3 percent increase.
The fiscal year 2017 budget proposal increased city-funded spending by $2.7 billion while offering a Citywide Savings Program that is too small to offset new initiatives or build necessary reserves. To prepare for potential economic uncertainty, the city needs to implement a more robust savings plan that focuses on operational efficiencies and recurring savings rather than one-time adjustments.
Recommendations related to City Budget
The Mayor should ask agencies to identify operational efficiencies that provide recurring savings to increase the budget cushion and guard against economic uncertainty.
The expanded Citywide Savings Program in the Executive Budget should include much more in the way of agency savings from initiatives that improve operations and provide recurring savings.
The City should exercise spending restraint and build reserves regularly and well in advance of a potential economic downturn.
Key Data
$2.7 billion
— Increase in city-funded spending in the fiscal year 2017 budget proposal.
$1.9 billion
— Total value of new savings initiatives proposed in the Citywide Savings Program over fiscal years 2016 to 2020.
0.6 percent
— Savings as a share of city-funded spending during the fiscal year 2016 to 2020 period.
$804 million
— Savings planned for the current year, fiscal year 2016.
45 percent
— Decline in China's stock market since its peak in June.
70 percent
— Drop in the price of a barrel of oil since June 2014.
The Citywide Savings Program, intended to improve municipal efficiency, is currently too small, with planned savings of $1.9 billion over four years representing only 0.6 percent of total city-funded spending. Less than one-quarter of these initiatives focus on recurring operational efficiencies, while the majority rely on debt service savings and funding shifts rather than structural improvements.
Recommendations related to City Budget
The Mayor should set a higher goal for the Citywide Savings Program in his Executive Budget due in April.
Agencies should be required to participate in the savings program, as several have not, including the Fire Department and the Department of Environmental Protection.
There should be more initiatives that achieve recurring savings by making agency operations more efficient.
The expansion of the Citywide Savings Program in the Executive Budget should be a high priority.
The Citywide Savings Program should be bigger and better.
Key Data
$804 million
— Savings yielded by the Citywide Savings Program initiatives in fiscal year 2016.
$1.9 billion
— Total planned savings over fiscal years 2016 to 2019, which equals 0.6 percent of total city-funded spending.
$270 million
— The portion of all initiatives in the Citywide Savings Program that achieve recurring savings by making agency operations more efficient.
$876 million
— Debt service savings resulting from lower interest rates, concentrated primarily in the current year.
$1.2 billion
— Spending re-estimates and funding shifts that substitute federal or state grants for local resources.
New York City's efforts to divert organic waste from landfills face significant financial hurdles, as citywide curbside collection could cost between $177 million and $251 million annually due to new truck routes. Targeted approaches, such as limiting curbside expansion to efficient districts or utilizing in-sink food waste disposers in specific neighborhoods, offer potential for environmental benefits without adding substantial new costs.
Recommendations related to City Budget
The City should expand curbside collections only where and when additional collection routes are not required to avoid significant new costs.
Municipal leaders should consider encouraging the use of in-sink food waste disposers in select neighborhoods with adequate wastewater treatment plant infrastructure and capacity to reduce garbage collection.
DEP and DSNY should collaborate to identify neighborhoods where in-sink disposers could be used without burdening existing wastewater treatment infrastructure and where trash collections could be reduced.
If wider diversion of organic waste is a high priority, collection costs must be brought down by fundamentally altering collection routes and practices.
Key Data
$1.7 billion
— Annual cost to taxpayers for managing residential trash.
1.8 million tons
— Amount of organic waste generated and carted away in New York City every year.
$177 million and $251 million
— Estimated annual cost to expand the City's residential curbside collection program citywide.
88,000
— Minimum number of new truck-shifts needed each year for citywide curbside organics collection.
$4 million
— Annual savings from implementing in-sink food waste disposers in four specific sanitation districts.
17,000 tons
— Amount of food waste that could be diverted by using in-sink disposers in four specific sanitation districts.
Expanding the city's organic waste program citywide would cost between $177 million and $250 million annually, significantly increasing the current $1.7 billion residential waste collection budget. To avoid these ballooning costs, the city should limit curbside expansion, utilize in-sink disposers, and pursue long-term efficiencies like private carter competition or contract renegotiations.
Recommendations related to City Budget
The city should expand curbside collections only where and when additional collection routes are not required to avoid unnecessary costs.
The city should collaborate with the Department of Environmental Protection to expand the use of in-sink disposers as an alternative to curbside collection.
The city should bring down the cost of all collections in the long-term by negotiating changes to sanitation worker contracts or opening residential waste collection to competition among private carters.
Key Data
$177 million to $250 million
— The estimated annual citywide cost increase if the organic waste curbside program is expanded.
$1.7 billion
— The current annual cost of residential waste collection and disposal.
$19 million
— The cost of the current organic waste program over two years.
88,000
— The number of new truck-shifts estimated to be needed each year for expanded collections.
10% to 15%
— The percentage increase on the current residential waste collection budget if the program is expanded.
1,000,000
— The number of tons in the annual organic waste stream.
New York City's property tax system is riddled with inequities, with effective tax rates varying significantly across property types due to assessment caps, phase-ins, and the undervaluation of co-ops and condos. To address these issues while raising $2 billion in additional revenue, the city should consider reforms such as eliminating assessment caps, revaluing properties based on market sales, and means-testing tax relief for vulnerable homeowners.
Recommendations related to City Budget
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 eliminate the caps for Class 1 properties and treat co-ops and condos identically to Class 1 properties.
The City should eliminate the cap on small rental properties and the phase-ins for large rental and commercial properties.
The City should value condos and co-ops based on market values using sales prices.
The City should assess co-ops and condos at the same 6 percent rate as 1-3 family homes.
Key Data
$21.1 billion
— The estimated baseline property tax levy in fiscal year 2015.
$2 billion
— The amount of additional revenue the proposed reforms are designed to raise.
$4.5 billion
— The estimated revenue foregone in fiscal year 2015 due to existing cap and phase-in rules.
$1.6 billion
— The amount of lost revenue accounted for by assessment caps applied to smaller rental properties.
$846 million
— The amount raised in fiscal year 2015 from the revaluation of condos and co-ops and the application of a 6 percent assessment ratio.
$936 million
— The amount raised in fiscal year 2015 from the elimination of assessment growth caps on 1-3 family homes.
New York City's $82 billion preliminary budget increases spending without a corresponding savings plan or boost in reserves, despite rising property values and economic growth. To ensure long-term financial stability, the city must aggressively pursue agency efficiencies and increase its $1.5 billion reserve fund.
Recommendations related to City Budget
Agencies should aggressively seek efficiencies to create savings that offset the costs of new programs.
Operations should be reviewed vigorously, with programs restructured or eliminated when necessary and opportunities for leveraging city dollars identified.
A strong savings program will be essential to boost reserves, which currently stand at $1.5 billion.
Additional deposits to the retiree health benefits trust fund should be made this year as well.
Key Data
$82 billion
— New York City Mayor Bill de Blasio's preliminary budget
4.5 percent
— Increase in city-funded spending
$400 million
— Agency savings in fiscal year 2016
$269 million
— Agency savings in fiscal year 2017
$1.5 billion
— Current city reserves
$3.4 billion
— Retiree health benefits trust fund balance
Raising the minimum wage to $15 for public sector and contracted social service employees would cost New York state and city taxpayers over half a billion dollars annually. This significant expenditure, which affects approximately 30,000 contracted workers, necessitates a focus on increasing productivity to ensure service delivery improvements accompany the higher labor costs.
Recommendations related to City Budget
If a sizable increase in the minimum wage is pursued, the city and state should focus on how simultaneously to increase productivity to improve service delivery.
Key Data
$20.3 million
— Annual cost to affect approximately 10,000 state workers with a $15 minimum wage.
$19 million
— Annual cost to the city to institute a $15 wage standard for New York City municipal workers.
30,000
— Number of workers at agencies contracting with the city that could be affected by a $15 minimum wage standard.
$300 million
— Approximate annual cost for wages and fringe benefits for 30,000 contracted workers under a $15 wage standard.
10,000
— Number of state workers affected by the governor's pledge to raise the minimum wage to $15.
The New York City Fire Department faces a significant mismatch between its resource allocation, which remains heavily focused on firefighting, and its actual workload, which is dominated by medical emergencies. To address this inefficiency and reduce costs, the department should implement strategies to better integrate fire and emergency medical services, including changing ambulance staffing models and increasing medical training for firefighters.
Recommendations related to City Budget
The FDNY should apply again to the NYC-REMSCO for permission to change ALS ambulance staffing to one paramedic and one EMT, which would yield about $5 million in savings that could be reinvested to expand the number of ambulance tours.
The FDNY should increase the medical training of firefighters so they can handle more situations without reliance on a separate ambulance and its staff, such as by training firefighters as EMTs.
The FDNY should require EMT qualifications for new applicants for firefighter jobs, which would effectively create a career ladder for advancement among the EMS staff.
The FDNY should fundamentally reorganize the department to redefine the relationships between the two services and rebalance the financial and human resources provided for each type of service.
The FDNY should subsidize the training for all current firefighters to become EMTs, which would cost about $1,200 per person.
Key Data
$3.8 Billion
— The FDNY's total budget in fiscal year 2015.
71 percent
— The portion of the FDNY budget devoted to staffing fire units.
13 percent
— The portion of the FDNY budget funding EMS operations.
$5 million
— Estimated annual savings from changing ALS ambulance staffing to one paramedic and one EMT.
10.1
— The average number of runs per day for engine companies.
75 percent
— The share of 2014 incidents to which FDNY vehicles responded that were medical incidents.
The 2015 New York City budget analysis highlights concerns regarding potential recession risks and the implementation of a citywide savings plan. This assessment focuses on fiscal stability and the strategic management of municipal expenditures during that period.
CBC compares the Mayor’s FY2016 budget savings agenda, called the Citywide Savings Program, or CSP, with the Program to Eliminate the Gap (PEG) in fiscal years 2010 to 2015.
Brooklyn Independent Media The Mayor's Executive Budget, which leaves unanswered how billions of dollars in much-needed transit improvements will be funded. The MTA is preparing its capital plan through 2019 which will determine the system's future condition.
The fiscal year 2016 adopted budget increases spending by approximately $200 million for police, social services, and other programs. While current revenue covers these costs, these additions threaten long-term fiscal health by increasing recurring expenses ahead of projected budget gaps and potential economic downturns.
Key Data
$200 million
— spending added in the FY 16 adopted budget for additional police, social service providers and other programs
The New York City Housing Authority faces a severe financial crisis with projected deficits reaching $194 million by 2019, driven by high operating costs and low revenue. To address this, the authority's "NextGeneration NYCHA" roadmap proposes operational reforms, increased rent collection, and residential infill development to ensure long-term financial stability.
Recommendations related to City Budget
NYCHA should increase rent collection rates to HUD's 95 percent target to generate an estimated $39 million in 2015.
The authority should generate more than $26 million annually in non-rental income by increasing parking fees, monthly appliance fees, and commercial activities.
Management should be streamlined to curtail the scope of responsibility for borough offices to non-redundant functions, saving $33 million annually by 2019.
NYCHA should eliminate responsibility for community and senior centers to rely on service provision by better-equipped City agencies and nonprofits.
The authority should negotiate work rule changes in collective bargaining to limit overtime compensation for work performed in the evenings and on weekends.
Key Data
$194 million
— Projected operating deficit for the New York City Housing Authority in 2019.
77 percent
— The average rent collection rate for the New York City Housing Authority.
$320
— The amount by which the New York City Housing Authority's monthly operating costs per unit exceed those of a private rent-stabilized unit.
$400 million to $800 million
— The total revenue expected to be generated over 10 years through residential infill development.
$68 million
— Annual savings achievable by reducing the operating cost gap between the New York City Housing Authority and rent-stabilized units by 10 percent.
New York City's $83.8 billion Ten-Year Capital Strategy lacks sufficient performance metrics and needs assessments, making it difficult to evaluate the effectiveness of proposed infrastructure investments. Furthermore, the city's debt burden is high, with $100 billion currently outstanding and debt service costs projected to reach $7.7 billion annually by fiscal year 2019.
Recommendations related to City Budget
The Strategy should incorporate information from those assessments and clearly spell out how much of state of good repair needs will be addressed by the proposed investments, and how quickly.
Specificity is necessary before dollars are appropriated for new OneNYC investments.
The Council should require improved reporting on the rationale for and performance goals of capital spending and should limit the capital budget to clearly defined projects with demonstrable benefits.
Investments should be undertaken based on clear analysis that demonstrates increased economic activity, improved operating efficiency, or enhanced service delivery.
Other agencies should improve their reporting on capital assets and their condition.
Key Data
$83.8 billion
— Total value of the Ten-Year Capital Strategy for Fiscal Years 2016 to 2025.
$100 billion
— Amount of debt currently outstanding for the City.
$7.7 billion
— Projected annual debt service cost by fiscal year 2019.
41 percent
— Growth in debt service since fiscal year 2005.
13 percent
— Debt outstanding in fiscal year 2016 as a percentage of personal income.
8 percent
— Debt outstanding in fiscal year 2016 as a percentage of real property values.
New York City's fiscal year 2016 executive budget benefits from $1,169 million in higher-than-anticipated tax revenues, allowing for a $1,030 million increase in reserves and $700 million in new social service and housing commitments. While the budget includes a new savings program to improve municipal service efficiency, the current initiative is relatively small and requires more significant action to ensure long-term sustainability.
Recommendations related to City Budget
The baby steps in the new savings program should become bolder strides as the budget process moves forward.
Key Data
$1,169 million
— Tax revenues anticipated in the budget for fiscal year 2016 that are greater than anticipated last June.
$218 million
— Tax revenues anticipated in the budget for fiscal year 2016 that are greater than the revisions made in February 2015.
$1,030 million
— Total increase in reserves for potential adverse developments.
$250 million
— Increase in the general reserve.
$1.0 billion
— Total amount of the general reserve.
$500 million
— Creation of a new capital program fund.
New York City faces projected budget gaps exceeding $1.0 billion in fiscal year 2017 and approaching $2.1 billion in fiscal year 2019, yet the current administration has abandoned the practice of setting efficiency targets for city agencies. Implementing a Program to Eliminate the Gap (PEG) is necessary to ensure fiscal discipline and prepare for potential economic downturns, as has been the standard practice for decades.
Recommendations related to City Budget
Mayor de Blasio should begin planning now for how to close the projected gaps and cope with any unexpected adverse conditions.
The administration should implement a Program to Eliminate the Gap (PEG) in anticipation of projected and possibly growing deficits to ensure efficiency.
Key Data
$1.0 billion
— Projected budget gap in fiscal year 2017.
$2.1 billion
— Projected budget gap in fiscal year 2019.
New York City faces projected budget gaps exceeding $1.0 billion in fiscal year 2017 and approaching $2.1 billion in fiscal year 2019, necessitating a proactive strategy to ensure fiscal balance. Regardless of the terminology used, the city must identify new efficiencies in service delivery to maintain a balanced budget and address potential economic downturns.
Recommendations related to City Budget
Mayor de Blasio should begin planning for how to close future budget gaps and cope with any unexpected adverse conditions as well as new needs that may emerge by implementing a strategy to improve the fiscal picture.
The Mayor should present a financial plan that includes significant savings from new efficiencies in service delivery.
The Mayor's next financial plan should be creative in identifying ways to keep the budget balanced and make service delivery more efficient in the future.
Key Data
$6.5 billion
— Savings in fiscal year 2014 resulting from PEGs implemented between fiscal years 2008 and 2013.
$1.0 billion
— Projected budget gap in fiscal year 2017.
$2.1 billion
— Projected budget gap in fiscal year 2019.
$4.8 billion
— The unprecedented PEG amount in Year 1 of Mayor Bloomberg’s first financial plan following the September 11, 2001 terrorist attacks.
New York City's revenue forecasting faces significant uncertainty due to the volatility of major tax sources and the concentration of tax payments among a small number of filers. Adopting overly optimistic revenue projections risks creating unsustainable spending levels that could lead to severe budget shortfalls if an economic downturn occurs.
Recommendations related to City Budget
The City must prioritize fiscal discipline by utilizing tax revenue forecasts that are rigorous and cautious to maintain a margin of error against potential shortfalls.
Policymakers should avoid estimating tax revenue optimistically, as this can lead to unsustainable spending levels during economic downturns.
The City should maintain sufficient reserves to cover potential revenue losses that exceed the current general reserve capacity in the event of a recession.
Key Data
$7.2 billion
— OMB's forecast for tax revenue growth over the fiscal years 2015-2019.
$15.8 billion
— Cumulative revenue shortfall relative to the OMB forecast if the 2001 recession were to repeat.
$750 million
— The current size of the City's general reserve.
70%
— Peak-to-trough decline in real estate transaction taxes during the past decade.
1%
— Proportion of tax filers who pay half of personal income taxes.
$24.1 billion
— Cumulative revenue shortfall relative to the IBO forecast if the 2001 recession were to repeat.
New York City's health insurance costs doubled to $5.3 billion in fiscal year 2015, prompting an agreement to achieve $3.4 billion in savings through 2018. However, current savings are being credited based on lower-than-expected premium increases rather than specific initiatives to improve health care delivery, risking a scenario where $2.5 billion of the target is met without actual reform.
Recommendations related to City Budget
Initiatives should "bend the cost curve" and achieve recurring savings for City taxpayers by establishing premium-sharing with employees and retirees, reducing per enrollee utilization of services, better managing chronic conditions, or lowering provider payments.
Savings should be counted clearly and honestly, meaning lower national and regional health care inflation, temporary premium rate "freezes," and unusually low premium increases should not be credited as savings gained under the agreement.
The City should pursue initiatives such as reducing emergency room utilization and improving chronic disease management to improve health outcomes for the workforce and save money for taxpayers.
Key Data
$5.3 billion
— The cost of the City's health insurance plan in fiscal year 2015, which doubled from $2.6 billion in fiscal year 2005.
$3.4 billion
— The total savings target agreed upon by the City and the Municipal Labor Committee between fiscal year 2015 and 2018.
2.89 percent
— The City's actual health insurance rate increase for fiscal year 2016, compared to the 9 percent annual increase projected in the financial plan.
$1.2 billion
— The amount of savings credited to the Municipal Labor Committee agreement in the November modification.
$2.5 billion
— The potential total savings attributed to the Municipal Labor Committee agreement without affirmative actions to improve the delivery of health care.
6.7 percent
— The portion of the 2015 budget comprised by the City's health insurance plan costs.
New York State's economic development spending grew to an estimated $8.1 billion by 2014, yet many programs lack sufficient accountability, standardized metrics, and evidence-based targeting. To improve cost-effectiveness, the state should standardize performance metrics, implement comprehensive disclosure requirements, and reevaluate program effectiveness before expanding or creating new initiatives.
Recommendations related to City Budget
All investments should be coordinated and aligned to regional strategies.
Performance metrics should be standardized for all programs and across all regions.
More comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed.
All programs should be reevaluated for effectiveness before existing programs are increased or new ones are added.
The framework for designing and evaluating economic development programs identified by the Citizens Budget Commission in 2011 should be utilized.
Key Data
$8.1 billion
— Annual economic development investments in 2014.
$2.8 billion
— Amount the State expects to have spent on economic development tax expenditures in fiscal year 2014.
$427 million
— Estimated cost of the film production tax credit in 2014.
$1.2 billion
— State's unused Investment Tax Credit (ITC) liability as of 2013.
$1.3 billion
— Total ESD spending on Tech Valley projects.
$150 million
— Projected annual cost of START-UP NY by fiscal year 2017.
New York City spends $1.5 billion annually on residential and public trash collection, a system that could be improved by implementing variable fees to incentivize waste reduction and support disposal infrastructure. Adopting a phased approach, such as a voluntary pilot program or bag and sticker systems, would align fees with usage and help the city meet its ambitious environmental goals.
Recommendations related to City Budget
A key step would be the implementation of a variable fee for residential trash removal to provide an economic incentive to reduce non-recyclable and non-compostable waste.
City officials should craft a plan for phased implementation of garbage fees before moving to wider expansion.
A good way to start is with a voluntary pilot program.
For example, bag or sticker programs could be used for large apartment buildings, and rebates could offset the new fees.
Another approach would be to allocate a certain number of garbage bags or tags, and residents who need less could sell the bags while residents who need more would pay extra.
Key Data
$300 million
— Annual cost of landfilled trash managed by New York City's Department of Sanitation.
1 million tons
— Annual greenhouse gas emissions produced by landfilled trash managed by New York City's Department of Sanitation.
80 percent
— Goal to reduce greenhouse gas emissions by 2050.
$7
— Estimated monthly cost of disposal for the average New York City household.
$1.5 billion
— Annual amount New York City taxpayers spend to pick up residential and public trash.
$500
— Annual amount per household New York City taxpayers spend to pick up residential and public trash.
New York City's Preliminary Budget for Fiscal Year 2016 utilizes a thriving economy to address service needs and priorities while maintaining reserves for potential risks. However, the city should pair new spending with a review of past commitments to identify inefficiencies and ensure fiscal preparedness for future economic downturns.
Recommendations related to City Budget
Additional expenditures should be accompanied by a review of past spending commitments to assess performance and reduce inefficiencies.
Key Data
$68 billion
— The Preliminary Ten-Year Capital Strategy for Fiscal Years 2016 - 2025.
The city's health insurance savings agreement with the Municipal Labor Committee requires rigorous measurement standards to ensure that only structural reforms, rather than temporary freezes or fund transfers, are credited toward savings targets. To achieve genuine fiscal efficiency, the city must implement specific mechanisms for recouping shortfalls and exclude external factors like national health inflation from savings calculations.
Recommendations related to City Budget
The city should establish an objective system for measuring savings to ensure they are recurring and efficient.
Reform should be associated with specific changes in the plan benefit structure that either reduce provider payment levels or reduce utilization.
The city should have a reliable mechanism for recouping amounts of planned savings not actually achieved during a fiscal year.
Savings calculations should be based on an agreed upon baseline number of people covered, unaffected by demographic trends or headcount changes.
The city should study moving retirees to the New York State Health Exchange with federal subsidies as a significant source of potential savings.
Temporary 'freezes' or low premium rate increases should not be credited as savings because they are merely deferrals of payments.
Additional funding taken from the Health Insurance Stabilization Fund beyond the $1 billion already agreed upon should not count as savings.
Savings from centralized purchase of prescription drugs should not be counted if they are not offset by reductions in related union welfare fund contributions.
National and regional trends in health care inflation should not affect the calculation of savings.
Reductions in the number of people covered due to eligibility audits should be credited toward savings targets.
Key Data
$1 billion
— The amount of funding already agreed upon in the Health Insurance Stabilization Fund.
1,000,000
— The baseline number of enrollees used in the hypothetical radiation services centralization model.
$100
— The fiscal year 2014 average payment per service in the hypothetical radiation services model.
3.0 percent
— The annual historical trend increase in payment per service for radiation services.
5.0 percent
— The annual historical trend increase in utilization per 1,000 enrollees for radiation services.
$2,736,126
— The projected baseline cost for radiation services in fiscal year 2018.
The New York City Health and Hospitals Corporation faces a growing financial deficit, with projected budget gaps reaching $1.7 billion by fiscal year 2018, threatening to exhaust its cash reserves by 2017. To ensure fiscal stability, the city must establish more rational funding guidelines, incentivize cost-effective service delivery, and better distribute the financial burden of caring for the uninsured.
Recommendations related to City Budget
Municipal leaders should develop more rational and stable guidelines for funding HHC in its efforts to meet its mandates.
The new approach should seek to improve HHC’s financial stability, its ability to engage in long-term financial planning, and its incentives for cost-effective service delivery.
City leaders should consider capitated payments for the uninsured that reflect the actuarially-based cost of providing care to them.
City leaders should implement incentive payments for state-of-the-art care management models that improve quality and reduce costs.
City leaders should begin a dialogue with HHC and other national health care experts about the best way to rationalize the financial relationship.
Key Data
$1.7 billion
— Projected budget gap for the New York City Health and Hospitals Corporation in fiscal year 2018.
$3.2 billion
— Accumulated cash shortfall projected for the New York City Health and Hospitals Corporation by fiscal year 2018.
$4.8 billion
— Accumulated GAAP deficit projected for the New York City Health and Hospitals Corporation by fiscal year 2018.
$668 million
— Deficit run by the New York City Health and Hospitals Corporation in fiscal year 2013.
$323 million
— Cash reserves held by the New York City Health and Hospitals Corporation at the close of fiscal year 2014.
$742 million
— Payments made from MetroPlus to the New York City Health and Hospitals Corporation in fiscal year 2013.
New York City spends $2.3 billion annually on public and private garbage collection, a system that is significantly more expensive than private-sector alternatives and other cities. Implementing a series of short- and long-term reforms, including route redesigns, increased automation, and competitive bidding, could save the city hundreds of millions of dollars annually.
Recommendations related to City Budget
The City should redesign routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons to save $72 million annually.
The Department of Sanitation should expand the use of one-worker, automated trucks from 8 percent to 18 percent to save $20 million annually.
The City should eliminate 'unproductive' productivity bonuses for sanitation workers, which would save $4 million a year.
The City should implement pay-as-you-throw fees for garbage producers to discourage waste creation and save an estimated $57 million annually.
The City should subject all Department of Sanitation collections to competition to potentially save $220 million a year.
The City should create a franchise system for commercial garbage to limit the number of carters in a given area and save $26 million annually.
The City should diversify its snow removal workforce to include other public employees, private contractors, and retired sanitation employees to improve staffing efficiency.
Key Data
$2.3 billion
— Annual spending on both the public and private systems of handling trash in New York City.
$300 million
— Estimated annual savings from implementing four long-term reforms to the garbage collection system.
$96 million
— Estimated annual savings from implementing three short-term reforms to the municipal Department of Sanitation.
$72 million
— Annual savings if routes were redesigned to increase the average amount of refuse collected per truck-shift from 10 to 12 tons.
$20 million
— Annual savings if the Department of Sanitation expanded the use of one-worker, automated trucks from 8 percent to 18 percent.
$220 million
— Potential annual savings if all Department of Sanitation collections were subject to competition.
New York City could save over $300 million annually by modernizing its solid waste collection system through measures like implementing pay-as-you-throw fees, introducing managed competition for residential waste, and diversifying snow removal capacity. These reforms, which include increasing collection flexibility and expanding automated truck usage, would reduce the city's reliance on expensive, labor-intensive practices and improve overall operational efficiency.
Recommendations related to City Budget
The City should promote flexibility in service arrangements to meet neighborhood needs, such as altering collection frequency and redesigning routes to ensure every truck-shift picks up at least 12 tons.
DSNY should expand the use of automated trash collection, specifically one-worker, roll-on/roll-off trucks and automated side-loading trucks, to reduce injury rates and improve productivity.
The City should eliminate unproductive 'productivity' bonuses for meeting tons-per-truck-shift targets and for dumping on shift, as these are primarily dependent on route characteristics rather than worker behavior.
Municipal policy should implement financial incentives to reduce refuse generation, such as pay-as-you-throw fees, to encourage residents to produce less waste and recycle more.
The City should introduce managed competition to promote more efficient public waste collection by soliciting public and private-sector bids for smaller waste streams and eventually residential collection.
The City should create franchises for more efficient commercial waste collection to limit the number of carters in a given area, thereby reducing truck congestion and improving operational efficiency.
The City should diversify capacity for snow removal by including other public employees, private contractors, and retired DSNY employees to reduce reliance on sanitation workers for year-round staffing decisions.
Key Data
$275 million
— Annual savings from redesigning municipal waste collection policies.
$220 million
— Annual savings from subjecting all DSNY collections to competition.
$57 million
— Annual savings from implementing pay-as-you-throw fees.
$72 million
— Annual savings from redesigning routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons.
$20 million
— Annual savings from expanding the use of one-worker, automated trucks from 8 percent to 18 percent.
$4 million
— Annual savings from eliminating unproductive 'productivity' bonuses.
The New York City Health and Hospitals Corporation faces significant fiscal challenges that are detailed in a budget profile. This profile provides an overview of the financial situation facing the city's public hospital system.
The New York City Department of Environmental Protection's budget profile and the governance of the city's water and sewer system were published in a partnership with City & State. This profile provides an overview of the department's financial structure and management.
Proposed legislation to provide additional grants for school transportation employees would undermine the integrity of the City's competitive bidding process and require cuts to other municipal services already accounted for in the financial plan. This measure would effectively provide supplementary payments to contractors beyond the terms of existing, legally binding agreements.
Recommendations related to City Budget
The City Council should reject proposed legislation that would provide grants to pay higher wages and benefits to certain school transportation service employees than those required by the City's contracts with the private bus companies that employ them.
The City Council should not adopt the proposed measure, as it is an ill-advised measure.
New York City can reduce the high costs of settlements and judgments by shifting financial responsibility directly to individual agencies, as demonstrated by the Health and Hospitals Corporation's successful risk management strategies. Incorporating these legal costs into agency budgets would incentivize commissioners to identify and address the specific practices or units that generate liability.
Recommendations related to City Budget
The City should include the cost of settlements and judgments in agency budgets to incentivize better risk management.
Settlement costs should become a more explicit part of each City Commissioner’s responsibility.
The NYPD should increase accountability at the precinct level to reduce legal liability costs.
The NYPD should examine claims filed to identify practices, shifts, precincts, units, or officers that open the department to legal liability.
The NYPD should act quickly to address any issues that are identified through ClaimStat analyses.
Key Data
$674 million
— Total expense for settlements and claims in the fiscal year 2015 budget.
54 percent
— Share of total settlements and judgments in fiscal year 2013 attributed to the Health and Hospitals Corporation and the NYPD combined.
$82.7 million
— HHC malpractice settlements and judgments in 1992.
$195.4 million
— HHC malpractice settlements and judgments in 2003.
$28.6 million
— NYPD settlements and judgments in 1992.
$86 million
— NYPD settlements and judgments in 2003.
New York City's fiscal year 2015 budget increases spending and reserves while addressing labor costs, yet it lacks a program to eliminate budget gaps projected to reach $3.1 billion by 2018. To ensure long-term fiscal stability, the city must implement recurring health care savings, improve operational efficiencies through labor negotiations, and reinstate a program to identify agency-level spending reductions.
Recommendations related to City Budget
The Administration and the Municipal Labor Committee should agree to changes that provide recurring savings on rapidly-growing health care costs.
The unsettled contracts present an opportunity to make city operations more efficient by eliminating archaic work rules, adopting new technologies, and reinventing service delivery.
City leaders should exercise restraint in adding new spending to the budget.
The City should implement a renewed emphasis on finding efficiencies within agency operations through a Program to Eliminate the Gap (PEG).
The Administration should develop guidelines for regular deposits to and potential withdrawals from the Retiree Health Benefits Trust to prevent future raids on the fund.
Key Data
$75 billion
— The total size of New York City's fiscal year 2015 budget.
$1.9 billion
— The amount expenses grew in fiscal year 2014 since the budget was adopted in June 2013.
$2.3 billion
— The amount expenses grew in fiscal year 2015 since the budget was adopted in June 2013.
$13.6 billion
— The projected gross cost of negotiating labor agreements with the entire municipal workforce between fiscal years 2014 and 2018.
$2.6 billion
— The projected budget gap for fiscal year 2016.
$1.9 billion
— The projected budget gap for fiscal year 2017.
NY1 The City Council and the mayor shook hands on a $75 billion budget deal Thursday night, and as we wait for the fine print, some fiscal watchdogs are calling the agreement prudent.
The proposal to hire 1,000 new police officers at an annual cost of nearly $100 million is questionable given that the city already maintains one of the most well-staffed police departments in the nation. Instead of increasing headcount, the city should focus on controlling overtime expenditures and reassigning the 730 officers currently performing administrative roles to patrol duties.
Recommendations related to City Budget
The city should focus negotiations on ways to control overtime rather than hiring new officers.
The department should move officers performing civilian roles to patrol to increase presence without new hiring.
The city should pursue administrative restructuring within the department to improve efficiency.
The city should hire police administrative aids to free up 500 officers for patrol duty at a lower cost than hiring new officers.
The city should revise overtime protocols to ensure that new hiring actually results in a reduction of overtime expenditures.
Key Data
$100 million
— Estimated annual cost of hiring 1,000 new police officers.
41.7
— Number of police officers per 10,000 New Yorkers in the NYPD.
$635 million
— Total NYPD overtime expenditures in fiscal year 2013.
$26.3 million
— Annual cost of hiring police administrative aids to free up 500 officers for patrol duty.
730
— Number of police officers currently performing civilian functions.
13.6%
— Percentage of the NYPD's $4.6 billion budget accounted for by overtime expenses in fiscal year 2013.
CUNY City Talk James Parrott, of the Fiscal Policy Institute and Charles Brecher, of the Citizens Budget Commission, discuss the complexities and the uncertainties of the New York City budget.
Proposed legislation A9594/S7326 threatens to reverse 2012 pension reforms, potentially increasing city costs by hundreds of millions of dollars annually. Maintaining these reforms is essential for fiscal responsibility, as the 2012 changes are projected to save the city $31 billion over 30 years.
Recommendations related to City Budget
The City Council should oppose the supporting home rule message under consideration regarding bill A9594/S7326.
The Mayor should oppose the bill itself, which would reverse recent pension reforms and increase future pension fund contributions.
The Mayor should affirm his commitment to fiscal responsibility by opposing the legislation that would reverse pension reforms.
Key Data
$8.2 billion
— Pension costs in fiscal year 2013.
235 percent
— Increase in pension costs from fiscal year 2004 to fiscal year 2013.
$31 billion
— Estimated savings over 30 years from the 2012 pension reforms.
$35 million
— Increase in the City's costs in fiscal year 2015 due to the proposed changes.
$266.4 million
— Actuarial value of contributions required by the City to fund the new benefit in fiscal year 2015.
$617.9 million
— Actuarial value of contributions required by the City to fund the new benefit in fiscal year 2019.
The agreement regarding New York City's health insurance for municipal employees relies on temporary, one-time savings rather than structural reforms that would improve system efficiency. These accounting methods, which calculate savings against financial plan projections rather than actual results, fail to provide meaningful long-term fiscal benefits for taxpayers and union members.
Recommendations related to City Budget
The city should prioritize initiatives that lower health care costs by making the system more efficient to achieve substantial, recurring savings.
Agreements should exclude one-time or temporary savings measures like artificial rate caps or adjustments to the City's contribution to the Health Insurance Stabilization Fund.
Savings calculations should be based on actual results of specific initiatives rather than projections relative to the City Financial Plan.
The 2014 legislative session included numerous proposals for public employee benefit enhancements that would impose significant fiscal burdens on state and local budgets. These "sweetener" bills, if enacted, would collectively cost over $1.8 billion, creating substantial long-term liabilities for taxpayers.
Key Data
$1.1 Billion
— Past service cost associated with bill 4890, which increases the pension benefit formula for certain Tier III, IV, and V members.
$617.9 million
— Increase in the Actuarial Present Value of benefits for bill 9594 in fiscal year 2019, which conforms disability retirement benefits for New York City police.
$374 million
— One-time costs for bill 5324, which allows members of various retirement systems to purchase additional service credit.
$98.9 million
— One-time cost for bill 4920, which allows certain employees to include unused vacation time in final average salary calculations.
$13 million
— Annual contributions required by bill 4914 to provide a 75% disability benefit to certain state correction employees.
$1,699 Million
— Total estimated state-level costs for the listed benefit sweetener bills.
Mayor de Blasio's 2014 budget agreement with the teachers' union carries a total cost of $17.7 billion, including $13.4 billion over the next four years and $4.3 billion in subsequent payments. While the agreement relies on $3.4 billion in projected health insurance savings, the budget faces a significant fiscal gap in 2018 that has ballooned to $3.2 billion.
Recommendations related to City Budget
The city must ensure that health insurance savings are certain rather than relying on uncertain projections.
The city should avoid extended time frames for paying back pay that conflict with sound principles of public finance.
The city should adhere to the principle that this year's taxes should pay for this year's services rather than deferring costs.
Key Data
$13.4 billion
— Cost of applying the teachers' deal pattern to all workers and giving the teachers back pay in the next four years.
$4.3 billion
— Subsequent payments for the teachers' deal pattern and back pay.
$17.7 billion
— Total cost of applying the teachers' deal pattern to all workers and giving the teachers back pay.
$3.4 billion
— Total savings in health insurance costs the unions have committed to help find over the next four years.
$370 million
— The gap in fiscal year 2018 as projected in February.
$3.2 billion
— The gap in fiscal year 2018 in the new budget.
The tentative agreement between New York City and the teachers union provides wage increases of 1% to 3% over five years, costing approximately $4 billion. To maintain fiscal stability, the city must secure $3.4 billion in new health care savings, potentially by requiring employees and retirees to contribute to their health insurance premiums.
Recommendations related to City Budget
The city must ensure the agreement's affordability by securing concrete savings from health care costs.
The city should achieve more predictable savings by requiring employees and retirees to share in the cost of their health insurance premiums.
Key Data
1% to 3%
— The range of wage increases provided to teachers from 2013 through 2018.
$4 billion
— The estimated cost of the teachers' contract over the next four years.
$400 million
— The additional cost of employees' salaries in fiscal year 2015.
$1.5 billion
— The additional cost of employees' salaries in fiscal year 2018.
$3.4 billion
— The estimated amount of new health care savings needed to help defray contract costs.
New York City's health insurance costs for employees and retirees have more than doubled over the last decade, reaching $4.8 billion in fiscal year 2012 and creating a significant, growing burden on the municipal budget. To address this, the city should implement premium-sharing for active employees and retirees, as well as eliminate the full reimbursement of Medicare Part B premiums, which would generate billions in savings by fiscal year 2016.
Recommendations related to City Budget
The City should implement premium-sharing for employees to align with practices in the private sector and other state and local governments.
The City should require premium-sharing by retirees to reduce the taxpayer burden and bring costs closer to those of other municipal employers.
The City should eliminate the reimbursement for Medicare Part B premiums for retirees and their spouses to achieve significant annual savings.
Key Data
$4.8 billion
— The cost of health insurance for New York City municipal employees and retirees in fiscal year 2012.
$83 billion
— The estimated unfunded liability for retiree health insurance and other post-employment benefits (OPEB).
$2.2 billion
— The projected annual savings by fiscal year 2016 if the proposed health insurance reforms are adopted.
$280 million
— The cost to the City in fiscal year 2013 for reimbursing retirees and their spouses for the full out-of-pocket cost of Medicare Part B premiums.
$1.8 billion
— The projected annual savings by fiscal year 2014 if the proposed health insurance reforms are adopted.
$2.0 billion
— The cost of health insurance for New York City municipal employees and retirees in fiscal year 2002.
The Fiscal Year 2015 Preliminary Budget utilizes additional tax revenue to restore $1 billion to the Retiree Health Benefits Trust Fund, which addresses a portion of the city's $92.5 billion retiree health liability. Additionally, the financial plan increases annual reserves from $300 million to $600 million to help mitigate risks from municipal labor contract settlements and the financial instability of the Housing Authority and Health and Hospitals Corporation.
Recommendations related to City Budget
No further withdrawals from the Retiree Health Benefits Trust Fund should occur unless and until clear guidelines for its use have been established.
Key Data
$1 billion
— Amount of tax revenue restored to the Retiree Health Benefits Trust Fund.
$92.5 billion
— Total estimated retiree health liability for the city.
$300 million
— Previous annual amount of reserves set aside in the financial plan.
$600 million
— New annual amount of reserves set aside in the financial plan.
New York City can fund its ambitious agenda by reforming the property tax system, which currently sacrifices $4 billion in annual revenue, and by broadening the sales tax base to include more non-essential services. These measures, alongside ending wasteful corporate subsidies, offer more sustainable revenue streams than relying solely on a tax on millionaires.
Recommendations related to City Budget
The city should end wasteful corporate subsidies to help fund new initiatives.
The next administration should take the lead in fixing a broken, inequitable and often inscrutable property tax system.
The city should subject more non-essential items to the sales tax to generate additional revenue.
Key Data
$930 million
— Cost of business property tax expenditures in the last fiscal year.
$30 million
— Estimated annual savings from cutting corporate tax breaks.
$4 billion
— Annual revenue sacrificed by the current property tax system.
$3.1 billion
— Annual value of the 2004 property tax hike.
$440 million
— Annual revenue raised by the 2009 sales tax increase.
$1 billion
— Potential annual revenue from broadening the sales tax to include more non-essential items.
New York City's economic development programs have grown significantly, with annual tax expenditures reaching $1.6 billion and capital spending nearly tripling to $751 million by 2012. To improve future performance, the city should prioritize infrastructure investments in high-potential neighborhoods, reform tax expenditure programs for cost-effectiveness, and enhance transparency in discretionary benefit awards.
Recommendations related to City Budget
The next administration should use capital investments to enhance infrastructure in neighborhoods with job growth potential.
The city should encourage growth in the cultural, medical and educational sectors by enhancing access to capital through conduit financing.
The city should continue reform of as-of-right tax expenditure programs to make them more cost-effective.
The city should establish clearer standards for awarding discretionary tax expenditure benefits.
The city should continue rezoning and expand special mixed use districts to facilitate diversified job growth in areas currently limited to industrial use.
The city should better manage the Economic Development Corporation by focusing on job creation and enhancing transparency.
Key Data
$1.6 billion
— Annual tax expenditures in 2012.
$751 million
— Annual capital spending on economic development in 2012.
$9.7 billion
— Total conduit debt outstanding in 2012.
$368 million
— Relevant operating expenditures in 2012.
$682 million
— Annual value of ICIP exemptions in 2012.
$2.8 million
— Annual value of ICAP abatements in 2012.
New York City's capital planning requires a shift toward a "fix it first" strategy that prioritizes state of good repair projects over new expansions to manage the city's high debt burden. The next administration should implement clear asset management guidelines, adopt cost-effective contracting practices, and establish an investment standard that balances debt with pay-as-you-go funding.
Recommendations related to City Budget
The next administration should enact clear guidelines or directives for performing routine maintenance and regular replacement of assets to prevent the state of good repair backlog from growing.
All city agencies and component units should undertake a comprehensive needs assessment that details the condition of major asset classes and the cost to fix those in disrepair.
The City should adopt a “fix it first” strategy, in which state of good repair projects receive priority at each agency.
The City should renew its Project Labor Agreements to reduce labor costs and improve managerial flexibility.
City leaders should advocate for changes to contracting rules, including a repeal of Wicks Law and an expansion of the city’s toolbox for effective contracting.
The next administration should articulate a standard for keeping debt from becoming unaffordable.
The administration should develop criteria for paying for some capital expenses from the operating budget to help keep the long-run debt burden manageable.
Key Data
$111 billion
— Total capital commitments registered since fiscal year 2003, including authorizations in the current fiscal year.
$6.4 billion
— State of good repair requirements as reported in the Asset Information Management System in fiscal year 2014.
$300 million
— Estimated capital budget savings over four years from Project Labor Agreements.
$3.2 billion
— Projected cost of completing the Croton Water Filtration Plant.
15 percent
— Level at which debt service remained relative to total city tax revenues during the Bloomberg Administration.
$100 billion
— Amount of debt outstanding for the City as of fiscal year 2014.
This presentation was given by Maria Doulis, CBC’s Director of New York City Studies, at “The Measured City: Using Data to Improve New York City Government” Conference, on Oct. 30, 2013.
Expanding universal prekindergarten to all three- and four-year-olds in New York would cost between $2 billion and $4.2 billion annually, depending on the funding model and whether three-year-olds are included. This significant fiscal commitment would place a substantial new tax burden on residents, particularly given the state's existing structural budget gaps and high local tax rates.
Recommendations related to City Budget
New York’s leaders should review the history of such efforts and take stock of some key realities before raising public expectations for universal prekindergarten.
Policymakers should avoid underfunding services for those students who could benefit most for the sake of achieving universality.
Investments in high quality pre-k deliver the best long-term returns when they are made in intensive, high-quality programs for disadvantaged children.
Key Data
$4.2 Billion
— The estimated incremental cost for providing universal pre-k to all three- and four-year-olds in New York using K-12 general education spending norms.
$1.4 Billion
— The estimated annual added cost of providing Abbott-quality pre-k programs for all four-year-olds in New York.
$385 Million
— The total amount allocated for Universal Prekindergarten (UPK) programs in New York for the 2012-13 school year.
232
— The number of school districts in New York that had not yet begun a Universal Prekindergarten program as of the 2013-14 school year.
44.2%
— The percentage of four-year-olds in New York who attended state-funded pre-k in 2012.
$80.60
— The local tax burden per $1,000 of personal income in New York, which is 72 percent higher than the national average.
New York City's fiscal year 2014 budget is balanced using $2.8 billion in surplus funds from the previous year and a $1 billion withdrawal from the Retiree Health Benefits Trust Fund. This depletion of the trust fund leaves the city without resources to address its $85 billion liability for retiree health benefits.
Key Data
$2.8 billion
— Surplus funds from fiscal year 2013 used to balance the 2014 budget.
$1 billion
— Amount withdrawn from the Retiree Health Benefits Trust Fund to balance the 2014 budget.
$85 billion
— The city's unfunded OPEB liability for retiree health benefits.
The Port Authority of New York and New Jersey should adopt more transparent and rigorous budgeting practices, including the implementation of multi-year financial and capital plans. These improvements should prioritize public accountability and long-term infrastructure investment through regular reporting and clear performance metrics.
Recommendations related to City Budget
The PANYNJ should have a detailed annual operating budget and a four-year financial plan.
The operating budget should be adopted only after opportunities for public review and should be revised and updated during the fiscal year.
The PANYNJ’s capital budgeting should be guided by a long-term (a period of 10 to 20 years) capital strategy that is revised every four years.
The capital budget should include an annual and a four-year commitment plan revised annually.
Regular and frequent (quarterly) reports should be made to the Board and the public on the status of each capital project relative to the scheduled milestones and planned costs for the project.
Performance measures of activities and accomplishments should be specified for each major agency activity, and regular and frequent (quarterly) reports should be presented to the Board and the public comparing actual and targeted performance.
The next mayor faces a significant fiscal challenge in negotiating expired municipal labor contracts, which could cost over $7 billion in one-time payments and nearly $3 billion annually in recurring expenses. Without careful management, these costs threaten to force sharp tax increases and significant spending cuts to the city's $72 billion budget.
Recommendations related to City Budget
Taxpayers should pay attention to how candidates handle their courtship of union members' votes regarding municipal labor contracts.
New Yorkers should take the time to understand the issue of municipal labor contracts, as they will be paying the bill.
Key Data
$72 billion
— The total size of the city's budget, of which personnel costs make up more than half.
$7 billion
— The potential one-time cost of granting retroactive pay for past years.
10 percent
— The portion of the operating budget that would be consumed by the one-time cost of retroactive pay.
$3 billion
— The amount of future recurring costs annually if retroactive pay is granted.
New York City faces a significant fiscal challenge as all municipal labor contracts have expired, leaving no budgetary reserves to cover potential retroactive wage increases. Settling these contracts could create a multi-billion dollar budget gap, as each 1% raise for the workforce costs approximately $300 million annually.
Recommendations related to City Budget
A more holistic approach to contract negotiations would consider reforms to health insurance, salaries, work rules, productivity and cross-agency collaboration.
Key Data
$300 million
— The approximate annual increase in operating costs for every 1 percent raise awarded to the city workforce.
$7 billion
— The potential budget gap in fiscal year 2014 that would open if labor contracts are settled under the proposed scenarios.
$3.5 billion
— The cost of retroactive pay in fiscal year 2014 if two 4 percent raises are awarded to teachers and principals.
$3.7 billion
— The cost of providing 2 percent wage increases to the entire workforce in each year for the 2010-2013 round of bargaining.
$1.8 billion
— The amount of ongoing expenses resulting from providing 2 percent wage increases to the entire workforce.
$30 million
— The cost of a one percent raise to members of the Patrolmen’s Benevolent Association.
New York City's legacy costs, including pension contributions, retiree health benefits, and debt service, are projected to consume nearly 25 percent of the city's budget by fiscal year 2015. These obligations, which grew from $8.5 billion to $17.8 billion between 2005 and 2015, are outpacing other spending and reducing the resources available for current public services.
Key Data
$17.8 billion
— Total legacy costs projected for fiscal year 2015.
25 percent
— Share of the New York City budget claimed by legacy costs by fiscal year 2015.
$8.2 billion
— Annual pension contributions projected for fiscal year 2015.
$2.4 billion
— Annual cost of retiree health benefits projected for fiscal year 2015.
$7.2 billion
— Debt service payments projected for fiscal year 2015.
New York City's health insurance costs for employees and retirees have more than doubled in the last decade and are projected to reach nearly $7 billion by 2016, driving a significant portion of the city's budget gap. To address this, the city should implement premium-sharing for employees and retirees and eliminate the reimbursement of Medicare Part B premiums, which would generate billions in savings.
Recommendations related to City Budget
The City should implement premium-sharing for employees to align with private sector and other government standards.
The City should require premium-sharing by retirees to reduce the taxpayer burden and address the unfunded liability.
The City should eliminate the reimbursement of Medicare Part B premiums for retirees and their spouses to generate significant annual savings.
Key Data
$1.8 billion
— Projected savings in fiscal year 2014 if premium-sharing and Medicare reimbursement reforms are adopted.
$2.2 billion
— Projected savings in fiscal year 2016 if premium-sharing and Medicare reimbursement reforms are adopted.
$83 billion
— Estimated unfunded liability for retiree health insurance and other post-employment benefits.
$4.8 billion
— Total cost of health insurance for municipal employees and retirees in fiscal year 2012.
$7 billion
— Projected cost of health insurance for municipal employees and retirees by fiscal year 2016.
$280 million
— Cost to the City in fiscal year 2013 for full reimbursement of Medicare Part B premiums.
New York City's reliance on temporary revenue sources and failure to address structural cost drivers like health insurance and debt service necessitates ongoing budget gap-closing programs. Future fiscal stability remains at risk due to unresolved labor contracts, potential costs from Hurricane Sandy, and the continued use of non-recurring resources to balance the budget.
Recommendations related to City Budget
The City must prioritize rightsizing capital investment to reduce the long-term trajectory of debt service costs.
The City should pursue reforming health insurance premium arrangements to address one of the largest and fastest-growing expenditure items.
The City needs to implement larger recurring expenditure cuts rather than relying on temporary measures to close budget gaps.
The City should move away from balancing the budget with one-shots, which masks structural problems and delays necessary, enduring solutions.
Key Data
$1.5 billion
— Total savings from the November 2012 Program to Eliminate the Gap (PEG) over two years.
$8.0 billion
— Annual cost of pension contributions, a major expenditure item.
$6.3 billion
— Annual cost of Medicaid payments, a major expenditure item.
$6.2 billion
— Annual cost of debt service, a major expenditure item.
$5.2 billion
— Annual cost of health insurance, a major expenditure item.
$4 billion
— Amount of non-recurring 'one-shot' resources used to close the fiscal year 2013 budget gap.
NY1 The 2013 mayor's race is just starting to take shape. While the burgeoning field is busy staking out positions on the NYPD's stop-and-frisk policy and Mayor Bloomberg's push to ban the sale of large sugary drinks, it is possible that a debate over a decidedly more wonky issue -…
New York City should prioritize funding for child care and after-school programs by phasing out the reimbursement of Medicare Part B premiums for retired municipal workers and their spouses. This shift would redirect resources from an overly generous benefit that is rare in both the public and private sectors toward essential services for the city's children.
Recommendations related to City Budget
The City should specifically focus on phasing-out the reimbursement of Medicare Part B premiums for some retired municipal workers.
The City should begin a phase-out of this reimbursement in next year’s budget.
The City should reduce the reimbursement by 50 percent in each of the next two years to generate savings.
It is time to consider redirecting budget resources toward the needs of our city’s children and away from areas of overspending.
Key Data
$100
— The monthly standard premium for Medicare Part B benefits covering physician services.
$85,000
— The annual income threshold for individuals to pay a larger Medicare Part B premium.
$170,000
— The annual income threshold for married couples to pay a larger Medicare Part B premium.
$320
— The monthly Medicare Part B premium amount for higher income earners.
$280 million
— The cost to New York City taxpayers for providing Medicare Part B reimbursement in fiscal year 2013.
$380 million
— The projected cost to New York City taxpayers for providing Medicare Part B reimbursement by fiscal year 2016.
NY1 For the past five years, City Hall has cut from the budget because it says it can't afford those programs. Those cuts are based on complicated revenue forecasts done by City Hall and others.
NY1 CBC President Carol Kellermann debate current City budget negotiations with James Parrot, Deputy Executive Director and Chief Economist of the Fiscal Policy Institute on NY1's Inside City Hall.
New York City's fiscal outlook is constrained by slowing revenue growth and rising costs, necessitating structural changes rather than reliance on temporary "one-shot" budget fixes. To achieve long-term stability, the city must implement measures such as extending wage freezes, reforming retiree health benefits, and exercising greater scrutiny over capital spending.
Recommendations related to City Budget
The Council should sustain the three-year wage freeze to avoid a significant budget gap.
The City should phase out the reimbursement of Medicare Part B premiums for retirees to reduce long-term health insurance costs.
The City should seek premium-sharing arrangements for employees and retirees to align contributions with other large cities and the State.
The City should phase in premium contributions for retirees under age 65 over the course of the financial plan.
The Council should reexamine the level and nature of capital investments to ensure projects are prioritized based on condition, need, or return on investment.
Key Data
$90 billion
— The City's unfunded liability for retiree health benefits.
$40 billion
— Capital spending planned over the next five years.
$3.6 billion
— "One-shot" resources relied upon to close the fiscal year 2013 gap.
$280 million
— Savings in fiscal year 2013 from phasing out the reimbursement of Medicare Part B premiums.
52 percent
— Portion of state-of-good-repair needs that will be funded in fiscal years 2013 to 2016.
$700 million
— Annual savings if employee contributions of 10 percent for single coverage and 25 percent for family coverage were implemented.
New York City spends over $2 billion annually on waste management, with a significant portion going toward expensive, environmentally harmful long-distance exporting of garbage to landfills. By shifting toward local waste-to-energy facilities and implementing better recycling and waste reduction policies, the city could save hundreds of millions of dollars and significantly reduce its environmental footprint.
Recommendations related to City Budget
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 shift two million tons of garbage from landfills to nearby waste-to-energy plants.
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.
The City should require prospective companies to demonstrate a record of meeting fiscal and environmental benchmarks to be eligible for public financing.
Key Data
$2 billion
— Annual cost for New York City to throw out its garbage.
$95 per ton
— Cost to export garbage to landfills.
$66 to $77 per ton
— Cost of sending a ton of garbage to a regional waste-to-energy plant.
$119 million
— Annual savings if new and expanded facilities accommodate two million tons of New York City waste.
$2 billion
— Present value savings over 30 years if new and expanded facilities accommodate two million tons of New York City waste.
35 percent
— Reduction in annual greenhouse gas emissions if two million tons are diverted from landfills.
CUNY-TV CityWide series host Ken Fisher continues the 18th season on CUNY-TV, talking with Carol Kellermann, President of the New York City Citizens Budget Commission.
New York City's economic development reporting often fails to capture the full scope of public spending, as significant portions of incentive packages and capital commitments are excluded from cost-benefit analyses. Improving transparency by including all relevant costs, such as debt service on capital commitments, is essential for ensuring accountability and justifying the use of government funds.
Recommendations related to City Budget
The Economic Development Corporation should include the debt service associated with project-related capital commitments in its cost-benefit analysis.
The methodology recommendation committee should be appointed and convened to discuss necessary adjustments to reporting measures.
The city should increase transparency regarding the costs and benefits of economic development projects to promote better accountability.
Key Data
$125 million
— Total incentive package provided to FreshDirect for its move to the Bronx.
$1.4 billion
— Total assistance provided to more than 620 development projects over their lifespans as of 2011.
$265 million
— Average annual capital commitments made by the Economic Development Corporation over the past decade.
$8,000
— Cost per job created based on the $700 million in assistance provided by the Economic Development Corporation through 2011.
38 to 1
— Ratio of direct tax revenue to reported city assistance in fiscal year 2011.
$16.4 million
— Amount of the FreshDirect incentive package excluded from the cost-benefit analysis due to program definitions.
The $500 million CityTime settlement should be directed toward the City's capital program rather than being used for short-term budget relief. These funds should specifically be used to retire existing technology debt or to provide pay-as-you-go capital financing to minimize future borrowing.
Recommendations related to City Budget
The City should use the recouped funds to defray the costs of the City’s capital program rather than for short-term budget relief.
The City should retire debt issued to finance technology projects using the settlement funds.
The City should use the funds as pay-as-you-go capital financing to reduce the need for additional borrowing.
Key Data
$500 million
— The value of the CityTime settlement announced in March 2012.
New York City's budget, which historically relied on significant tax revenue surpluses to balance, now faces a tighter fiscal reality where tax collections are barely exceeding projections. To address this, the city is increasingly relying on temporary one-shot revenue sources and may soon need to implement structural changes, such as reforming generous municipal employee health insurance policies.
Recommendations related to City Budget
The City should tackle spending arrangements that drive budget growth and out-year deficits.
The City should reform generous health insurance policies for municipal employees and retirees to address long-term fiscal challenges.
The City may need to raise taxes if revenue surpluses continue to disappear.
The City may need to impose additional cuts on services and personnel to balance the budget.
Key Data
$5.3 billion
— High of unanticipated tax revenues reached in fiscal year 2007.
$114 million
— Amount fiscal year 2012 tax collections are running above the initially budgeted sum.
$42.2 billion
— Total tax revenues for fiscal year 2012.
$7 billion
— Amount Wall Street profits are running below what was assumed when the budget was adopted.
$1 billion
— Revenues from the sale of taxi medallions used to balance the fiscal year 2013 budget.
$1 billion
— Revenues from the retiree health insurance trust fund used to balance the fiscal year 2013 budget.
New York City's reliance on unanticipated tax revenues to balance the budget has ended, as fiscal year 2012 collections are only $114 million above projections compared to previous years of multi-billion dollar surpluses. With Wall Street profits falling $7 billion below assumptions and the city resorting to $2 billion in one-time resources to balance the budget, officials must now consider fundamental changes to the city's fiscal planning.
Recommendations related to City Budget
The Mayor and the City Council must consider fundamental changes in the City’s budget if large unanticipated tax revenues are no longer a recurring part of the annual budget process.
Key Data
$114 million
— FY2012 tax collections above the initially budgeted sum.
$42.2 billion
— Total tax revenues for fiscal year 2012.
$7 billion
— Amount by which Wall Street profits are running below assumed levels.
$1 billion
— Revenue from the sale of taxi medallions used to balance the fiscal year 2013 budget.
$1 billion
— Funds drawn from the retiree health insurance trust fund to balance the fiscal year 2013 budget.
$5.3 billion
— High point of unanticipated tax revenues reached in fiscal year 2007.
New York's current policy requires local governments to cover a disproportionate share of Medicaid costs, creating a financial burden that conflicts with property tax caps. While a proposed state takeover of future cost growth offers relief, the state must eventually pursue more comprehensive reforms to eliminate the inequitable local funding requirement entirely.
Recommendations related to City Budget
The Governor and legislative leaders should begin planning for more far-reaching, longer-term initiatives that will fully solve the problem of the inequitable local Medicaid burden.
Key Data
$7.1 billion
— amount counties are required to pay for Medicaid in the 2011-12 state fiscal year
$54 billion
— projected total Medicaid expenditures in the 2011-12 state fiscal year
13 percent
— local government share of total Medicaid expenditures in New York
3 percent
— statutory cap on the annual growth in localities' Medicaid expenses since 2005
5 percent
— average annual growth in total Medicaid costs since 2005
2 percent
— property tax growth cap adopted in June 2011
New York's public employee pension costs are among the highest in the nation, with New York City's pension expenses projected to reach $8.6 billion by fiscal year 2014. Proposed reforms, including a 401(k)-style option and increased employee contributions, aim to save taxpayers an estimated $123 billion over 30 years while ensuring long-term benefit sustainability.
Recommendations related to City Budget
Future employees who opt for the traditional defined benefit plan will contribute between 3% and 6% of their paychecks toward their pensions, depending on their income.
The retirement age would rise from 62 to 65, consistent with national trends.
Overtime would be barred from pension calculations as it is for all but 6% of all public employees in the country.
New employees would be given the opportunity to enroll in a 401(k)-style plan, as most private-sector workers do.
Employees would be able to have up to 10% of their salary deposited in a retirement account if they opt for the full matching program.
Key Data
$8.6 billion
— New York City’s projected pension costs by FY 2014.
$123 billion
— Estimated savings for taxpayers throughout New York State over the next 30 years.
$2.4 billion
— New York City’s pension costs in FY 2004.
$574
— Amount New Yorkers pay per person per year in taxes for public employee pensions.
30%
— Portion of MTA payroll that pension costs will total by FY 2014 without reform.
19%
— Portion of fare and toll revenue that pension costs will total by FY 2014 without reform.
New York's high tax burden is driven by rapidly escalating public employee pension costs, which are projected to reach billions of dollars for the city, state, and MTA by fiscal year 2014. Implementing a new pension benefit package for new employees is essential to align with national norms and achieve significant long-term savings for state and local governments.
Recommendations related to City Budget
The governor should use his strong hand in the budget process to bring about more affordable pension benefits at all levels of government.
A pension reform proposal should be included in the governor's budget.
The Legislature should swiftly adopt a pension reform proposal.
New York should implement a new package of pension benefits for new employees to bring the state more closely in line with national norms.
Key Data
$143 per $1,000 of personal income
— New York's state and local tax burden in fiscal year 2009.
$12 per $1,000 of personal income
— New York's pension costs in fiscal year 2009.
$574
— The amount per person New Yorkers pay annually in taxes for public employee pensions.
$2.4 billion
— New York City's pension costs in FY 2004.
$8.6 billion
— New York City's projected pension costs by FY 2014.
$123 billion
— The amount New York state and local governments could save over the next 30 years with a new package of pension benefits for new employees.
New York's public employee pension costs have grown significantly, creating a competitive disadvantage and placing a severe financial squeeze on the budgets of the State, New York City, and the MTA. Implementing the proposed Tier VI pension reform is essential to align benefits with national norms, contain future cost growth, and achieve substantial long-term savings for taxpayers.
Recommendations related to City Budget
The Governor should include the Tier VI pension reform plan in the Executive Budget, and the Legislature should adopt it in a timely manner.
New York State should implement Tier VI pension reforms to align benefits with national norms and contain the future growth of pension costs for the State, New York City, the MTA, and other local governments.
The State should consider extending the defined contribution plan option to other groups of employees to provide more portable retirement benefits or serve as a foundation for a hybrid combination plan.
Key Data
$123 billion
— Total projected savings from the proposed Tier VI pension reforms over 30 years.
$93 billion
— Projected savings for New York State and local governments from Tier VI pension reforms over 30 years.
$30 billion
— Estimated savings for New York City pension systems from Tier VI reforms over 30 years.
$7.0 billion
— New York City's annual pension payments in fiscal year 2011, which grew from $2.4 billion in fiscal year 2004.
4.1 percent
— Share of total state and local spending accounted for by employer contributions to pension funds in New York.
$143
— New York's state and local tax burden per $1,000 of personal income in fiscal year 2009.
Regional distribution of revenues and expenditures within the New York State budget for fiscal year 2009-10 highlights the fiscal relationship between New York City and the state, where the city contributes 45.1% of state revenue but receives 40.0% of expenditures. This imbalance suggests the city would have received $4.1 billion more if its share of expenditures matched its share of revenues.
Key Data
45.1%
— New York City's share of state revenue payments under the residence-based allocation method in fiscal year 2010.
40.0%
— New York City's share of total state-funded expenditures in fiscal year 2010.
$4.1 billion
— The estimated amount New York City would have received in additional state-funded expenditures if its share matched its share of state-funded revenues.
The Office of the New York City Actuary is expected to lower the Actuarial Interest Rate for pension funds, a move that would increase annual pension costs by between $750 Million and $1.4 Billion. This adjustment is considered a prudent step to ensure the long-term solvency of the pension funds, aligning the city's practices with those of other major public pension systems.
Recommendations related to City Budget
The City should proceed with the adjustment to the Actuarial Interest Rate because it would be prudent in order to keep the City’s pension funds fully funded.
Key Data
$750 Million and as much as $1.4 Billion
— The projected increase in the City’s annual pension costs if the Actuarial Interest Rate is reduced.
8%
— The current Actuarial Interest Rate used for the investment of pension fund assets.
7.5% or 7.0%
— The expected new Actuarial Interest Rate that would be used for the investment of pension fund assets.
15% to 30%
— The increase in the share of public pension funds with an Actuarial Interest Rate below 8%.
New York City's current method of defining a balanced budget relies on a unique set of accounting rules that masks significant long-term liabilities, such as retiree health benefits and asset depreciation. Adopting a more comprehensive accounting standard, which currently reveals a deficit of nearly $9.6 billion for fiscal year 2011, is necessary to ensure current residents do not unfairly burden future generations.
Recommendations related to City Budget
New York City should abandon its unique set of accounting rules that allow operating expenses to be labeled as capital investments and paid for with borrowed funds.
New Yorkers should give much more attention to the financial results disclosed under the new, more comprehensive GAAP rules.
Municipal leaders should adopt a new standard for local financial management that reflects modern fiscal realities rather than outdated definitions.
Key Data
$9.6 billion
— The deficit reported for fiscal year 2011 under the new GAAP standard.
$282 million
— The deficit the City would have faced in fiscal year 2011 if GAAP were strictly applied.
$53.3 billion
— The added expense recognized in fiscal year 2006 when the accumulated liability for retiree health insurance was first reported.
$5 million
— The surplus reported for the City's fiscal year 2011 General Fund based on the statutory exemption from GAAP rules.
New York City's waste management system costs approximately $4 billion annually, with significant potential savings available through more efficient collection, increased recycling, and greater reliance on waste-to-energy facilities. Implementing these improvements could prevent further budget cuts to essential services like education by reducing the high costs associated with current disposal and collection practices.
Recommendations related to City Budget
New York City should test the effectiveness of “pay to throw” fees for collection and the tax on plastic bags to signal the fiscal and environmental cost of waste management.
The Department of Sanitation should aggressively pursue new options to send garbage to expanded or newly constructed waste-to-energy facilities within the city or region to achieve budgetary savings.
The Department of Sanitation management should work cooperatively with the Uniformed Sanitationmen’s Association to reverse the trend of rising collection costs for solid waste.
The city should prioritize generating less garbage, recycling more of it, collecting it more efficiently, and disposing of it in cheaper and more environmentally friendly ways to end wasteful practices.
The city must achieve greater economies of scale in recycling collection to make recycling cost-effective and reduce overall expenses.
Key Data
$4 billion
— The total annual cost of solid waste management for New Yorkers.
$440 per ton
— The average cost of collecting and disposing of waste by the Department of Sanitation.
$241 per ton
— The current collection cost per ton of refuse.
$575 per ton
— The cost for handling recycled material.
$392 per ton
— The cost for collection and disposal of non-recycled materials.
$208 per ton
— The current cap on fees charged by private haulers.
New York City spends $1 billion annually on union welfare funds that suffer from limited accountability and inefficient management, leading to unnecessary costs. Consolidating these supplementary health and non-health benefits into centralized city-managed plans could generate approximately $146 million in annual savings for the city budget.
Recommendations related to City Budget
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.
A new centralized plan should be developed to provide non-health related benefits through a 'cafeteria plan' model.
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.
$146 million
— Total estimated annual savings from consolidating supplementary health benefits and administrative functions.
$12.7 million
— Estimated annual administrative savings from consolidating welfare funds.
$90 million
— Estimated savings from using formularies for pharmaceutical 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.
Corporation Counsel Michael A. Cardozo discusses legal and financial issues affecting New York City and outlines key legal initiatives critical to the City's continued economic health, including highlighting glaring fixes needed to reform state tort laws.
New York's economic development programs, costing approximately $6.6 billion annually, require a unified budget and standardized performance metrics to ensure accountability and effectiveness. Rather than creating new, unfunded initiatives, the state should consolidate existing programs and tie financial incentives strictly to verified performance outcomes.
Recommendations related to City Budget
To be fully effective, the councils should have responsibility and authority over all state economic development resources, not just a subset of selected programs.
A solution to the proliferation of Industrial Development Agencies may be to consolidate them into one per region and place them within the Regional Councils’ purview.
Performance should be gauged only by new activity created in addition to baseline payroll and/or property value.
Benefits should be paid retroactively based on firm performance.
The ultimate goal should be the creation of a Unified Economic Development Budget that includes tax expenditures, direct subsidies, and benefits conferred by local entities.
Key Data
$6.6 billion
— Estimated annual cost to the State of all economic development programs in lost tax revenues, power subsidies, and direct spending.
$2.5 billion
— Annual reduction in state tax receipts caused by more than a dozen separate state tax credit programs.
$1.8 billion
— Annual spending by seven state public authorities and six state agencies on capital investments and debt service.
$1.0 billion
— Annual expenditure by Industrial Development Agencies and the City of New York in tax breaks.
$554 million
— Cost to the State in 2010 in lost tax receipts from the Empire Zone program.
$586 million
— Amount invested by the State from 1997 to 2006 trying to establish the Centers of Excellence.
New York City's fiscal year 2012 budget agreement avoided immediate teacher layoffs and fire company closures but failed to address the structural growth of health insurance, pension, and debt service costs. Consequently, the city faces a projected $4.8 billion budget gap for fiscal year 2013 and continues to rely on service cuts and layoffs to balance its finances.
Recommendations related to City Budget
The City’s leaders must work with the Municipal Labor Committee to reform health insurance arrangements by requiring employees and retirees to pay a share of their premiums.
The City Council should join the Mayor in backing the pension reform bill that has been introduced by the Governor to adjust eligibility and benefits for future employees.
The Mayor and City Council should make slowing the growth of debt service a higher priority by downsizing the capital budget and focusing on essential infrastructure.
Key Data
$4.8 billion
— Projected budget gap for fiscal year 2013.
$23.1 billion
— Projected spending on health insurance, pension contributions, and debt service in 2015.
$30 billion
— Total savings from pension reform over the next 30 years.
$5.4 billion
— Projected spending reduction in fiscal year 2012 achieved through agency cuts.
$625 million
— Savings generated in 2012 by adopting a health insurance premium-sharing arrangement.
New York City could avoid thousands of layoffs and service cuts by adopting a labor agreement template similar to the state's, which includes wage freezes, employee furloughs, and health insurance premium contributions. Implementing these measures would generate $1.4 billion in savings for the city in fiscal year 2012, providing a sustainable alternative to temporary fiscal gimmicks.
Recommendations related to City Budget
The City should extend the wage freeze to a third year to generate $388 million in savings in 2013.
The City should implement a five-day furlough for all municipal employees to save $400 million in 2012.
The City should require employees to contribute to the cost of their health insurance premiums to save $735 million, growing to $915 million by 2015.
The City should adopt the State’s long-standing policy for retiree premium-sharing to save an additional $290 million in fiscal year 2012.
The City’s leaders and the Municipal Labor Committee should consider these changes seriously to avoid layoffs and service cuts.
Key Data
$1.4 billion
— Potential savings for New York City in fiscal year 2012 by following the state's labor agreement template.
$735 million
— Savings the City would realize if employees made the same health insurance contributions required by CSEA employees.
$400 million
— Savings from a five-day furlough for all municipal employees in 2012.
$388 million
— Savings in 2013 from extending the wage freeze to a third year.
$290 million
— Savings in fiscal year 2012 from adopting the State’s long-standing policy for retiree premium-sharing.
$915 million
— Savings from employee health insurance contributions by 2015.
New York City has implemented multiple rounds of budget cuts since 2008 to address revenue declines, yet the city still faces a $2.4 billion deficit for the upcoming fiscal year. To avoid further damaging cuts to essential services like education and social programs, the city must pursue structural reforms to pension fund contributions and employee health insurance premiums.
Recommendations related to City Budget
Anticipated State actions will require substantial new cuts in agency budgets unless ways are identified and approved to reduce spending for pension fund contributions and health insurance premiums for employees and retirees.
The 'all other' category consisting largely of pension fund contributions and health insurance premiums should be reduced with new initiatives.
Unions must be willing to accept changes in collective bargaining over health benefits.
Wide support must be garnered to push the State Legislature to authorize changes in future pension benefits.
Key Data
$3.4 billion
— Total budget balancing actions proposed in the last two fiscal years.
$2.0 billion
— Actual agency expenditure reductions achieved from the proposed budget balancing actions.
$2.4 billion
— Projected deficit for the next fiscal year.
274,061
— Number of full-time city employees at the end of fiscal year 2010.
$926 million
— The single largest agency cut, which was applied to the Department of Education.
$395 million
— Amount of proposed expenditure cuts that were restored through negotiations.
New York City's capital budget commitments have reached record highs despite multiple rounds of announced cuts, as unfinished projects are continuously rolled over and new initiatives are added. To achieve fiscal austerity, the city must apply the same rigorous prioritization to the capital budget that it has successfully implemented for the operating budget.
Recommendations related to City Budget
The Mayor must become more determined about establishing priorities in the capital budget the way he has for the operating budget.
Key Data
$12 billion
— Projected 2011 capital commitments, representing a new record high.
$12.2 billion
— Average yearly capital commitments since the Mayor began cutting the capital plan.
26%
— Increase in average yearly capital commitments compared to the period between fiscal years 2006 and 2008.
$1.3 billion
— Capital commitments for parks in fiscal year 2011.
$1.2 billion
— Capital commitments for technology and equipment in fiscal year 2011.
$1.1 billion
— Capital commitments for economic development in fiscal year 2011.
New York City faces significant fiscal pressure from Other Postemployment Benefits (OPEB), with expenses rising to $9.4 billion in fiscal year 2010 due to health insurance liabilities for retirees. To manage these growing costs, the city must implement premium-sharing for retirees and establish a responsible, restricted funding policy for future liabilities.
Recommendations related to City Budget
The City should require greater retiree contributions toward health insurance premiums to control fiscal impacts.
The City should establish a program for funding the future liabilities associated with retiree health insurance.
The City should institute premium-sharing for retirees, with an appropriate goal of retirees paying 50 percent of their premiums.
The City should develop a policy for responsibly funding the costs of OPEB liabilities.
The Mayor and the City Council should agree to a policy that determines the basis for future contributions and limits the conditions and purposes of future withdrawals from the Retiree Health Benefits Trust.
Key Data
$9.4 billion
— Expense recognized by New York City for other postemployment benefits (OPEB) in fiscal year 2010.
$2.3 billion
— OPEB expense incurred by New York City in fiscal year 2009.
$1.6 billion
— Total premium payments made by the City for retiree health insurance in fiscal year 2010.
$2.4 billion
— Projected premium payments for retiree health insurance in fiscal year 2014.
$11 billion
— Actuarially determined contribution needed for the City to fully fund its 2010 OPEB obligation.
$2.5 billion
— Total amount deposited into the Retiree Health Benefits Trust (RHBT) fund over fiscal years 2006 and 2007.
Rising pension costs for municipal workers have forced significant budget cuts to youth services in New York City, including staff reductions in child-serving agencies. Reforming the current pension system and increasing cost-sharing for health insurance could eliminate the need for these cuts and allow for more equitable fiscal management.
Recommendations related to City Budget
The Legislature must enact a new pension system for future uniformed workers that includes a minimum retirement age, bases pensions on salaries without overtime, and requires higher employee contributions.
Union leaders must agree to more cost-sharing for health insurance premiums to align with private and nonprofit sector arrangements.
Retirees should be paying for a share of their health benefits to reduce the burden on taxpayers.
Key Data
$8.1 billion
— Projected annual pension fund contributions in fiscal year 2012.
$6.6 billion
— Total pension contributions cost to New York taxpayers last year.
$1.6 billion
— Total budget cuts announced by the Mayor.
$3 billion
— Amount of planned spending reduced for fiscal year 2012.
21%
— Staff reduction in the Agency for Children's Services.
11%
— Staff reduction in the Department of Youth and Community Development.
New York's public pension and retiree health systems face significant financial strain, with state and local employers contributing 88 percent of pension funding and facing $55.9 billion in liabilities for retiree health insurance. Addressing these fiscal challenges requires reforms such as adjusting contribution ratios, capping overtime in pension calculations, and exploring defined contribution plans to ensure long-term sustainability.
Recommendations related to City Budget
The state should reform retiree health benefits to require employee contributions on a sliding scale that would determine cost-sharing in inverse proportion to length of service.
Policymakers should consider moving toward defined contribution plans, which place the investment risk on the employee rather than the employer.
The state should eliminate the practice of including overtime in the calculation of final average salary to prevent pension padding.
The state should increase employee pension contributions to align with the national average of 6.4 percent.
The state should implement policies to prevent the underfunding of pension systems and make retirement benefits more fair and affordable.
Key Data
$55.9 billion
— State liability for retiree health insurance and other benefits.
88 percent
— Share of total pension contributions provided by State and local employers in 2009.
$2.1 billion
— Projected state pension fund contributions by fiscal year 2014.
$33,270
— Average annual pension received by employees retiring in 2010.
6 percent
— Percentage of all full-time State and local employees across the country eligible to include overtime in the calculation of final average salary.
$200 billion
— Estimated total State and local unfunded actuarial liabilities for retiree health.
A proposed legislative mandate requiring 80 hours of additional training for firefighters would impose an unnecessary $29.5 million financial burden on the city. This unfunded mandate would increase overtime and pension costs, exacerbating existing fiscal pressures without providing justified benefits to the public.
Recommendations related to City Budget
Governor Paterson should veto A9885/S6784, as the bill mandates an arbitrary addition to existing preparation that is unnecessary and financially burdensome.
The State should not mandate that the City create further increases to the budget due to non-essential training.
Key Data
$29.5 million
— Estimated cost of the legislation requiring additional firefighter training.
222,114
— Total inspections conducted by the FDNY in fiscal year 2010.
180
— Hours of specialized training already received by civilian inspectors.
16
— Hours of training on new codes already received by all fire officers.
$19 million
— Added current year wages and fringe benefits resulting from the training mandate.
20 percent
— Projected growth of pension costs by 2014.
Granting charter-mandated formula budgets to city agencies undermines the democratic budget process by shielding offices from public scrutiny and limiting fiscal flexibility. Maintaining annual budgetary discretion by the mayor and city council is essential to ensure funding aligns with current needs rather than rigid, automatic formulas.
Recommendations related to City Budget
The Charter Revision Commission should reject establishing formula budgets for any City agencies or offices besides the Independent Budget Office.
The City should maintain the current budgetary discretion exercised annually by the mayor and the council to ensure appropriate funding levels.
Policymakers should avoid permanently earmarking dollar amounts or formulas for specific agencies, as this shields them from public input on budgetary priorities.
Key Data
12.5 percent
— The formula budget allocation for the Independent Budget Office was raised to this amount to cover increased costs for public school performance analysis.
two-thirds
— A 2002 report estimated that this portion of California’s general fund revenues are earmarked for specific purposes.
one-third
— In practice, California has discretionary control over far less than this portion of the budget due to mandatory spending.
New York City faces a $5.6 billion backlog in infrastructure repair needs, with the current capital budget allocating only about half of the required funding to maintain assets in a state of good repair. Because maintenance is funded through the expense budget and competes with other agency programs, the city consistently underfunds these requirements, leading to increased long-term costs.
Recommendations related to City Budget
The city should make full funding of maintenance requirements an explicit priority.
The city should use the AIMS condition assessments as the starting point for developing the next 10-year capital plan.
The city should develop a strategy for upgrading all assets to a state of good repair.
The city should consider a reasonable time-horizon for upgrading each class of assets and identify specific steps to make progress against those goals.
Key Data
$5.6 billion
— The amount of state of good repair work needed for existing facilities.
36 percent
— The increase in the estimated cost of needed repairs since 2000.
$2.9 billion
— The funding allocated for AIMS capital work in fiscal year 2011.
53 percent
— The portion of required funding allocated for AIMS capital work in fiscal year 2011.
70 percent
— The portion of maintenance needs funded in the operating budget across all facilities.
$1.2 billion
— The annual amount of capital program funding that, if devoted to state of good repair between 2006 and 2009, would have eradicated the identified need.
New York City's capital planning and budgeting processes need to be better integrated with long-term initiatives like PlaNYC to ensure infrastructure is maintained in a state of good repair. The city should adopt more rigorous economic analysis for expansion projects and fund asset replacements through operating revenues rather than relying on debt.
Recommendations related to City Budget
The City should institutionalize and expand the PlaNYC approach to ensure long-term strategic planning is integrated into capital budgeting.
The City should develop a systematic plan for bringing all City-owned assets to a state of good repair by expanding condition assessments.
The City should place capital assets on appropriate replacement cycles and fund their replacement with operating revenues rather than relying on debt.
The City should pursue expansion projects based on clearly explained priorities and data demonstrating benefits that will accrue to the public.
Key Data
$60.5 billion
— Total value of City-controlled capital assets.
$18.4 billion
— Value of the City's water and sewer system infrastructure.
$11.8 billion
— Value of the City's 1,040 public school buildings.
$2.4 billion
— Value of the City's parks, playgrounds, and related recreational facilities.
$3.0 billion
— Investment in Hudson Yards, the only expansion project with a clear justification.
$24 billion
— Total new capital investments planned by the City over the next ten years.
New York City's fiscal year 2011 budget relies on $3.6 billion in surplus funds from the previous year to cover a $4.3 billion gap, highlighting the end of multi-billion dollar surpluses and the need for structural spending reforms. To address unsustainable expenditure growth, the city must reform public employee fringe benefits and scale back the $43.5 billion capital commitment plan rather than relying on agency cuts and pork barrel spending.
Recommendations related to City Budget
The City should require employee contributions to health care premiums of 10 percent for individuals, 25 percent for families and 50 percent for retirees, which would save the City over $1 billion annually.
The City should create a new pension tier that would require greater employee contributions and a longer vesting period to save $200 million annually.
The City should scale back the capital commitment plan to focus on key priorities, such as state-of-good-repair work on the City's aging infrastructure, and trim back on development projects that are less urgent.
Key Data
$1 billion
— Recurring savings achieved in agency spending in the fiscal year 2011 budget.
6.3 percent
— The rate at which expenditures in fiscal year 2011 are higher than the previous fiscal year, after adjusting for prepayments and drawdowns.
$4.3 billion
— The budget gap the City would be facing in fiscal year 2011 without the surplus from fiscal year 2010 and money from the Retiree Health Benefits Trust Fund.
$3.6 billion
— The amount of surplus from fiscal year 2010 used to balance the fiscal year 2011 budget.
4,200
— The number of jobs lost as part of the Program to Eliminate the Gap, including about 1,100 layoffs.
$43.5 billion
— The total value of the capital commitment plan for fiscal years 2010-2014.
New York City should maintain its commitment to Generally Accepted Accounting Principles (GAAP) and only grant a temporary, one-year deferral for the implementation of GASB Statement No. 49. The City must prioritize compliance with these accounting standards rather than seeking exemptions, ensuring that remediation costs are addressed through the standard budget process.
Recommendations related to City Budget
The Financial Control Board should make clear on the public record that any deferral of GASB Statement No. 49 will be temporary.
The Financial Control Board should make clear that it supports the application of all current GAAP requirements.
Any deferral granted for the implementation of GASB Statement No. 49 should be as brief as is necessary and practical, specifically for one year.
The City should use its budget process to address the difficult tradeoffs among multiple services to taxpayers, rather than using compliance costs as an argument against adherence.
The City and its consultants should be able to develop a method for reasonable compliance for the fiscal year beginning July 1, 2009.
Key Data
July 1, 2008
— The effective date for the City to implement GASB Statement No. 49.
July 1, 2009
— The target date for the City to achieve reasonable compliance with GASB Statement No. 49.
1975
— The year of the City's brush with bankruptcy, after which it adopted sound financial management practices.
December 2006
— The date GASB Statement No. 49 was promulgated.
New York City's fiscal plan for 2011 requires structural reforms to public employee fringe benefits and a reduction in the capital program to manage rising debt service costs. By implementing higher employee health insurance contributions and pension reforms, the city could achieve significant annual savings to address deficits and avoid service reductions.
Recommendations related to City Budget
The Council should support the Mayor’s efforts to bargain with municipal labor unions for contributions to health insurance premiums and to lobby the State Legislature for pension reform.
The Council should support reforming the pension package for new employees—commonly referred to as a new tier—to require greater employee contributions and a longer vesting period.
The City should reject the drawdown from the retiree health benefits trust and reserve those funds for their original purpose of paying for retiree health benefits.
The City should downsize the capital program to lower debt service costs, preserving key priorities like infrastructure repair while limiting non-essential items.
The City should require employee contributions to health insurance premiums that are comparable to other public and private sector employers.
Key Data
$1.3 billion
— Recurring expenditure savings included in the program to eliminate the budget gap.
$3.8 billion
— The projected deficit in fiscal year 2012.
815 percent
— The growth in pension costs between fiscal years 2000 and 2009.
$65 billion
— The accrued future liability associated with retiree health benefits.
$13.4 billion
— The record high level of capital commitments for the current year.
$43.5 billion
— The total capital commitment plan for fiscal years 2010-2014.
Rent regulation in New York City provides significant but poorly targeted benefits, while simultaneously imposing substantial costs on the city, including $283 million in lost annual property tax revenue and higher rents for those in the unregulated market. The report recommends phasing out rent protections for high-income households and shifting toward more effective, better-targeted programs to promote affordable housing.
Recommendations related to City Budget
Reduce inequities and expand the unregulated housing stock by phasing out benefits for all higher-income households.
Develop and expand effective programs to promote affordable housing.
Key Data
$2.6 billion
— Total annual rent discount associated with rent regulation.
$1.9 billion
— Annual rent increase for households in the unregulated sector due to rent regulation.
$283 million
— Annual loss in property tax revenue for the City of New York due to rent regulation.
$5,500
— Average annual rent reduction per housing unit provided by rent regulation.
$2,800
— Average annual rent increase per household in the unregulated sector.
New York City and State retirement benefits for public employees have become a significant and rapidly growing fiscal burden, far exceeding the generosity of benefits provided by large private employers and other public systems. To address this, the report recommends shifting to defined contribution plans for new hires and implementing structural reforms to health insurance and pension calculations to ensure long-term fiscal sustainability.
Recommendations related to City Budget
Require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
Stop reimbursing retirees for Medicare Part B premiums.
Increase required employee contributions to the pension system.
Raise the minimum age requirement for retirement to align with federal standards.
Base pension benefits on the more standard definition of final average salary, excluding overtime.
Define work-related disabilities more rigorously to prevent abuse.
Eliminate the variable supplements available to some retired New York City uniformed workers.
Convert from defined benefit to defined contribution plans for all new City and State workers.
Key Data
$4.7 Billion
— Projected City pension contributions in fiscal year 2008.
$1.5 Billion
— Combined cost to the City and State of health insurance for retirees in 2004.
$35.16
— Average total compensation cost per hour among public employers in 2004.
$23.90
— Average total compensation cost per hour among private employers in 2004.
$12,000
— Annual variable supplement payment for certain retired New York City uniformed workers in 2007.
$615 Million
— Required contributions to City pension funds in fiscal year 2000.
Between fiscal years 2002 and 2009, New York City committed $63.4 billion to capital projects, significantly increasing the value of city-owned assets like schools and water infrastructure. Despite this investment, the city faces a $5.6 billion backlog in maintenance needs, with some infrastructure like roads and water mains showing signs of deterioration or lagging improvement.
Key Data
$63.4 billion
— Total capital commitments made by New York City through the end of fiscal year 2009.
$5.6 billion
— Estimated capital work needed to bring surveyed city assets to a state of good repair for fiscal year 2011.
$2.3 billion
— Depreciation expense for City-owned assets recorded in fiscal year 2009.
$33.9 billion
— Value of capital assets owned by New York City in fiscal year 2009.
$2 billion
— Total spending on economic development projects between fiscal years 2002 and 2009.
$16.4 billion
— Total depreciation costs for City-owned assets between fiscal years 2002 and 2009.
New York City faces unsustainable growth in retirement benefits, with pension contributions projected to exceed $7.9 billion by fiscal year 2014 and future retiree health premiums carrying an actuarial value of $65 billion. To address these fiscal pressures, the city should enact pension reform, stop using the Retiree Health Benefits Trust to balance operating budgets, and require retirees to contribute to their health insurance premiums.
Recommendations related to City Budget
The city must make pension benefits less lavish to avoid an unaffordable burden in coming years' budgets.
The city should enact pension reform in the current legislative session, with savings from Tier 5 beginning on July 1.
The imprudent diversion of funds from the Retiree Health Benefits Trust should be eliminated from the Executive Budget.
The city should require retirees to pay a substantial share of their health insurance premiums.
Key Data
$3.9 billion
— City pension contributions in fiscal year 2006.
$6.3 billion
— City pension contributions in fiscal year 2009.
$7.9 billion
— Projected city pension contributions in fiscal year 2014.
$65 billion
— Actuarial value of future retiree health insurance premiums.
$2.5 billion
— Amount deposited into the Retiree Health Benefits Trust from surplus revenue over two years.
$1.2 billion
— Amount from the Retiree Health Benefits Trust used to balance the budget in fiscal years 2011 to 2013.
New York City's debt service costs are rising rapidly due to an expanding capital program, with total debt service projected to reach $8.8 billion by fiscal year 2014. To control these costs, the city must implement significant cuts to the capital budget, prioritizing essential infrastructure repairs over non-essential economic development projects.
Recommendations related to City Budget
A downsized capital program will be necessary if the Mayor is serious about restraining debt service growth.
The same belt-tightening that has occurred with the operating budget should apply to the capital budget, as well.
Cuts should be made starting in fiscal year 2011, and should be made with an eye toward abandoning non-essential items, including over $1.0 billion in economic development projects, and preserving key priorities such as repairs of essential infrastructure like roads, bridges, water mains and sewer pipes.
Smarter, more targeted investment will also produce real savings in debt service by the end of the Mayor's term.
Key Data
$5.2 billion
— Debt service costs in the current fiscal year.
12.4 percent
— Portion of all city-funded spending dedicated to debt service in the current fiscal year.
$8.8 billion
— Projected total debt service costs by fiscal year 2014.
$38.6 billion
— Capital commitments for fiscal years 2006 to 2009.
$14.5 billion
— Expected capital commitments in fiscal year 2010.
$36.3 billion
— Updated capital commitment plan for fiscal years 2010-2013.
Facing a $4.1 billion budget gap, New York City must reform teacher compensation and tenure rules to ensure taxpayer dollars are spent effectively. These changes include ending indefinite pay for teachers not in classrooms, implementing merit-based pay, and eliminating the "last in, first out" layoff policy.
Recommendations related to City Budget
End compensation for teachers who aren't teaching by limiting the time they spend in the "Absent Teacher Reserve" to six months.
Implement quick termination for unsatisfactory teachers to avoid paying them for years while their cases are considered.
Use financial rewards to attract qualified teachers in hard-to-fill fields like special education, math, and science.
Ensure merit pay replaces seniority rewards to save approximately $285 million annually.
Kill the "last in, first out" rule to ensure layoffs are not based solely on seniority.
Key Data
$4.1 billion
— The size of the city's budget gap necessitating job cuts and reforms.
$285 million
— The estimated annual savings from ending pay hikes solely based on seniority.
$74 million
— The annual cost of paying approximately 1,400 teachers in the 'Absent Teacher Reserve'.
$100 million
— The annual outlay on teachers who are not currently teaching.
1,400
— The number of teachers paid to be in the 'Absent Teacher Reserve'.
640
— The number of teachers currently charged with poor performance or other infractions.
Mayor Bloomberg's preliminary budget for fiscal years 2010 through 2014 addresses a $4.1 billion gap through a combination of revenue projections, union contract negotiations, and agency spending cuts. The plan raises concerns regarding the realism of state aid assumptions, the preferential treatment of the Department of Education, and the continued depletion of the Retiree Health Benefits Trust.
Recommendations related to City Budget
The City should plan more realistically for the prospect of reduced State aid rather than assuming aid increases in the baseline budget.
The City should re-evaluate the highly favored status of teachers and the Department of Education given the current difficult fiscal situation.
The City should reconsider the decision to draw down funds from the Retiree Health Benefits Trust and instead link withdrawals to growth in the current year liability for retiree health insurance premiums.
Key Data
$4.1 billion
— Gap in the budget for fiscal year 2010-11 that the City plans to close.
$1.3 billion
— Estimated fiscal year 2011 impact of the Executive Budget as a loss in State aid.
$1,149 million
— Total amount scheduled to be used from the Retiree Health Benefits Trust in fiscal years 2010 through 2012.
$2.9 billion
— Surplus generated in the current year used to pay for expenses in fiscal year 2010-11.
$11.9 billion
— Amount of aid the City expects from the State in the current fiscal year.
$241 million
— Amount of revenue generated through new taxes in the proposed budget plan.
Retired police and firefighters in New York City receive annual 'Christmas bonuses' known as Variable Supplement Fund payments, which totaled $405 million in fiscal year 2010. These payments, which are not constitutionally protected and can be adjusted by the State Legislature, are funded by taxpayers and can necessitate transfers from the City's pension systems if fund assets are insufficient.
Key Data
$405 million
— Total benefits paid from Variable Supplement Funds in fiscal year 2010.
$164 million
— Total benefits paid from Variable Supplement Funds in fiscal year 2001.
$1.7 billion
— Assets held by Variable Supplement Funds in fiscal year 2010.
$12,000
— Annual Christmas bonus payment amount for eligible retired police and firefighters.
New York City's projected $4.1 billion budget gap may be narrowing due to higher-than-expected tax revenue, but the budget still relies on problematic one-shot measures and fails to account for significant mandated expenses. Officials must prioritize structural cost-cutting rather than using temporary revenue gains to avoid necessary fiscal discipline.
Recommendations related to City Budget
The city should avoid one-shot measures, such as the $395 million drawdown from a retiree health insurance trust fund.
The city must not let additional tax revenue be an excuse to avoid needed cost-cutting.
The city should recognize mandated items, such as the $200 million in new pollution-remediation operating expenses that were previously capitalized.
Key Data
$4.1 billion
— The currently projected budget gap for New York City.
$395 million
— The amount of the drawdown from a retiree health insurance trust fund used as a one-shot budget measure.
$200 million
— The cost of new pollution-remediation operating expenses that were previously capitalized and are not currently recognized in the budget.
$500 million
— The amount of future concessions from labor unions assumed in the mayor's budget plan.
To preserve fiscal stability, New York City must reduce the escalating costs of its municipal payroll by limiting wage growth, reforming fringe benefits, and increasing employee contributions to health and pension plans. Additionally, the City needs to lower its debt burden by prioritizing the maintenance of existing infrastructure over new, less essential capital projects.
Recommendations related to City Budget
Wage increases must be kept below inflation.
Fringe benefits must be reformed to be more in line with those of other public and private-sector entities.
Every employee should contribute to his or her health insurance premiums.
The retirement age should be increased for new employees, and they should contribute more to their pensions.
The City needs to borrow less money and reduce the amount of debt service paid out of its operating budget.
A smarter capital budget will focus on better use and maintenance of existing assets rather than ambitious plans for expansion.
Key Data
$15 billon
— The increase in the cost of compensating City employees, including pension and fringe benefits, from fiscal year 2000 to 2009.
80%
— The percentage increase in the cost of compensating City employees from fiscal year 2000 to 2009.
$100,000
— The average compensation of a New York City municipal worker.
6,838
— The number of full-time municipal workers added from 2000 to 2009.
$6.5 billion
— The projected interest on the City's debt by 2013.
9%
— The projected portion of the budget that will be spent on debt interest by 2013.
New York City faces unprecedented budget gaps ranging from $6.6 billion in fiscal year 2010 to $9.6 billion by fiscal year 2013 due to the economic recession. To address this structural imbalance, the city should prioritize cost-cutting measures like wage freezes, pension reform, and health insurance premium sharing rather than implementing new tax increases or relying on non-recurring revenues.
Recommendations related to City Budget
The City should implement no new or higher taxes that harm prospects for economic recovery and growth.
The City should reduce operating expenditures in ways that lower the cost of producing services rather than cut the availability of services.
The City should target capital investments to support existing facilities and lower future debt service burdens.
The City should implement a 25 percent contribution by current employees and a 50 percent contribution by retirees toward their health insurance premiums.
The City should implement a one-year wage freeze for civilian and uniformed employees to produce $1.2 billion in recurring savings.
Key Data
$6.6 billion
— The projected budget gap for fiscal year 2010.
$9.6 billion
— The projected budget gap for fiscal year 2013.
$1.2 billion
— The recurring savings generated by a one-year wage freeze.
$1 billion
— The annual savings generated by proposed health insurance premium sharing.
$13 billion
— The record level of capital commitments reached in the current year.
$1.1 billion
— The amount of the drawdown from the Retiree Health Insurance Trust Fund over three years.
New York City's pension and retiree health care costs are rising rapidly, with pension funding costs growing by $4 billion since 2003 and retiree health care spending projected to reach $1.9 billion by 2013. To address this fiscal pressure, the city must implement structural reforms, including creating a new, less costly pension tier for future employees, requiring retiree contributions to health premiums, and eliminating supplemental "Christmas bonuses" for police and firefighters.
Recommendations related to City Budget
The city should implement legislative changes to create a new "tier" for future workers that would provide less costly benefits to ensure future fiscal health.
The city should apply the concept of employee contributions to health premiums to retirees, similar to the proposal for current municipal employees.
The city should work to lower or end the police and firefighter "Christmas bonuses", which are unusually generous and not protected by the state Constitution.
Key Data
$4 billion
— The amount by which the annual cost of funding pensions has grown since fiscal year 2003.
$5.7 billion
— City pension-fund contributions in fiscal year 2008, which are projected to reach $7.6 billion by fiscal year 2013.
$10.2 billion
— The amount paid annually in benefits to New York City's retirees.
$42,100
— The average pension for a new retiree in 2006.
$1.1 billion
— The amount the city spent on health care for retirees in fiscal year 2008, which is projected to grow to $1.9 billion by fiscal year 2013.
New York City's pension costs for public employees have experienced significant growth, necessitating a closer examination of retirement benefit structures. Understanding these financial obligations is essential for evaluating the long-term fiscal health of the city's budget.
New York City faces significant infrastructure maintenance backlogs, including $3.2 billion for CUNY and $1.7 billion for SUNY facilities, which could be addressed through public-private partnerships (PPPs) that prioritize lifecycle cost efficiencies. By adopting pilot programs and reforming restrictive procurement laws like the "Wicks Law," the city could leverage private sector expertise to improve project delivery and long-term asset maintenance.
Recommendations related to City Budget
PPPs should be focused on achieving efficiencies in the life cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public sector operation.
New York’s leaders should give high priority to assets that are currently in poor condition and have a history of poor maintenance.
PPPs should be initiated as pilot programs and viewed as benchmarks for project delivery times and maintenance standards.
The public sector must develop an enhanced capacity for contract design, performance measurement and monitoring.
New York State should enact significant changes to public procurement procedures, such as reforming the "Wicks Law," to allow for the expansion of PPPs.
Public officials should negotiate with the private partner to establish contractually compensation or work conditions similar to that provided to public employees to address labor concerns.
Key Data
$1.6 trillion
— Estimated investment necessary in the next five years to bring the nation’s infrastructure to a good condition.
$3.2 billion
— Critical maintenance backlog identified for the City University of New York (CUNY) system.
$1.7 billion
— Critical maintenance backlog identified for the State University of New York (SUNY) system.
$999 million
— Total value to be paid to New York City by Cemusa, Inc. over the life of the 20-year street furniture partnership.
$1.8 billion
— Total value of the contract to build the Airtrain from John F. Kennedy International Airport to the Jamaica Station.
$1.4 billion
— Total cost of rebuilding JFK Terminal Four.
New York's local governments face significant financial strain due to state-imposed mandates that prevent local officials from managing retiree health insurance costs, which include a $57.8 billion liability for New York City. Governor Paterson is urged to veto legislation that would further restrict local control over these expenses, thereby protecting taxpayers from additional tax burdens.
Recommendations related to City Budget
Governor David Paterson should veto the legislation (A9393A/S6457A) to prevent further restrictions on local officials' ability to manage retiree health insurance costs.
Local government leaders need flexibility in negotiating with unions to better manage the escalating expenses of retiree health insurance.
Local governments should have a say in the costs that they must bear regarding retiree health benefits.
Key Data
79%
— New York's high local taxes are this much above the national average statewide.
$49.7 Billion
— The state's estimated liability for government retiree health insurance.
$57.8 Billion
— New York City's estimated liability for government retiree health insurance.
The City of New York should maintain its commitment to Generally Accepted Accounting Principles (GAAP) and only grant a temporary, one-year deferral for the implementation of GASB 49. This approach ensures that remediation expenses are treated as operating expenditures rather than being financed through long-term borrowing, forcing the City to prioritize these costs within its existing budget framework.
Recommendations related to City Budget
The Financial Control Board should ensure that any deferral of accounting standards is temporary and not a permanent or long-term exemption.
Any granted deferral for the implementation of GASB 49 should be as brief as is necessary and practical, specifically limited to one year.
The City and the Financial Control Board should continue to accept GASB rules as the basis for defining a balanced budget rather than picking and choosing accounting rules.
The City should use its budget process to address the difficult tradeoffs among multiple services rather than financing remediation expenses through long-term borrowing.
The Financial Control Board should ensure that only the minimum necessary delay is granted for the City to comply with GASB 49.
A Panel Discussion A forum discussion on the efficacy of New York City's infrastructure plan and what steps it should take to ensure that current infrastructure is kept in a state of good repair. Mayor Michael Bloomberg delivers the keynote speech and CBC President Carol Kellermann gives the presentation on…
New York City's capital planning and budgeting processes are currently fragmented and lack the long-term strategic perspective needed to maintain the city's vast infrastructure. To ensure the city's future competitiveness, the government must institutionalize a comprehensive planning approach, systematically assess asset conditions, and fund regular maintenance through operating revenues rather than borrowing.
Recommendations related to City Budget
The City should improve its needs assessments and develop a systematic plan or timetable for bringing all capital assets to a state of good repair.
The City should place all its capital assets on regular replacement cycles and fund their replacement with operating revenues, not from the capital budget.
Expansion projects should be clearly explained and justified with data that demonstrates economic and other benefits, or a high rate of return on the investment of public funds.
Efforts to institutionalize PLANYC should be pursued through City Council approval of legislation establishing the Office of Long-Term Planning and Sustainability as a mayoral office and through revision of the City Charter.
The City should develop a systematic plan to eliminate deferred maintenance and bring all its capital assets and infrastructure systems to a state of good repair.
Key Data
$23 billion
— Total cost of planned expansion projects for the next ten years.
$83.7 billion
— Total capital investments called for in the recently adopted Ten-Year Capital Strategy.
$3.0 billion
— Investment in Hudson Yards, the only expansion project with a clear rationale.
$24 billion
— Total new capital investments to be pursued by the City in the next ten years.
$60.5 billion
— Total value of capital assets controlled by the New York City government.
New York City's current budget structure fails to align with program performance, making it difficult to track how public resources are spent on specific agency goals. To improve accountability and transparency, the city should reorganize its budget to better track programs and incorporate outcome-based performance measures.
Recommendations related to City Budget
Connect money and performance in the budget – the budget should be reorganized to better track programs and program performance.
Focus on efficiency measurement – measuring and reporting unit costs should be a high priority in every service area.
Improve outcome measurement and reporting – leaders should push to develop and track desired results for every service area.
Develop and present comparative performance measures – New Yorkers should be able to compare the caliber of their services to those provided by other competitor cities.
Expand the use of citizen-derived outcome measures – public perception of City services should not just be measured by complaints but also by satisfaction survey measures.
Key Data
$54 billion
— New York City is a $54 billion dollar enterprise.
24 out of 30
— 24 out of 30 countries participating in a 2005 OECD study were reporting performance results to the public.
24 out of 30
— 24 out of 30 largest U.S. cities publish performance metrics in their budgets.
1,000
— The MMR includes more than 1,000 statistics on performance.
2,500
— The City reports about 2,500 supplementary measures online.
13.2 million
— In fiscal year 2006, 3-1-1 handled 13.2 million calls.
New York City's government needs to improve its accountability by better aligning its budget with program performance and adopting more rigorous outcome and efficiency measures. By integrating performance data into the budget process and comparing service quality with other cities, the city can ensure taxpayers receive better value for their money.
Recommendations related to City Budget
The city should reorganize the budget to better align with programs and program performance.
Measuring and reporting unit costs should be a high priority in every service area.
Leaders should push to develop and track desired results measures for every service area.
The city should develop and present comparative performance measures so New Yorkers can compare the caliber of their services to those provided by other competitor cities.
The city should expand the use of resident perception measures so that public perception of city services is measured not just by complaints, but also by satisfaction surveys.
Key Data
$54 billion
— The size of the New York City enterprise, raising the question of whether the public is getting its money's worth.
13.2 million
— The number of calls handled by the 3-1-1 system in fiscal year 2006.
150
— The number of cities and counties that participate in the International City/County Managers Association Center for Performance Measurement.
40
— The number of city agencies covered by the Mayor's Management Report.
1,000
— The number of performance statistics included in the Mayor's Management Report.
33%
— The percentage of local governments that use survey data to make policy decisions.
New York State faces significant fiscal challenges, including high local tax burdens driven by state-mandated Medicaid and pension costs, as well as excessive debt and a lack of budget transparency. To address these issues, the state must implement structural reforms such as reducing state-mandated local costs, improving debt management, and adopting more rigorous, multi-year financial planning.
Recommendations related to City Budget
Reduce State-mandated local government Medicaid costs more than authorized by the 3 percent cap on local growth enacted in 2005.
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Redesign the State-mandated pension benefits for future state and local government workers through changes such as raising the minimum retirement ages, increasing the required employee contributions, eliminating inclusion of overtime in benefit calculations, and eliminating variable supplements for uniformed workers.
Lower Medicaid expenditures by eliminating long-term care eligibility loopholes that extend benefits to middle-class residents.
Discontinue issuance of State-funded debt to cover operating deficits.
Integrate public authorities’ proposed borrowing for capital investments with the State’s capital plan in order to prevent inefficient use of borrowing capacity.
Subject public authority borrowing to more rigorous financial review by an enhanced Public Authorities Control Board or by the Division of Budget.
Reduce the State’s future debt by lowering capital spending and/or increasing pay-as-you-go financing.
Prepare more extensive multi-year financial plans.
Require that lump-sum appropriations meet specific program criteria and be subject to sunshine provisions.
Key Data
$1.1 billion
— Estimated savings for local governments from Medicaid measures in the current fiscal year.
$5.8 billion
— Estimated annual savings from changing Medicaid policies, including reducing non-competitive rates and rationalizing utilization.
$105.8 billion
— Total debt outstanding for the State and its authorities at the end of fiscal year 2004–05.
$11.5 billion
— Amount of outstanding State-supported debt used to pay for operating expenses.
$4.2 billion
— Projected budget gap for the next fiscal year based on the budget enacted for the current year.
$12,000
— Amount of variable supplement payments or 'Christmas bonuses' per retiree in 2007.
New York City and State retirement benefits for public employees have become a significant and rapidly growing fiscal burden, with pension contributions for the City projected to reach $4.7 billion by fiscal year 2008. To address these costs and align benefits with those of other large employers, the current system should be reformed by shifting to defined contribution plans and adjusting pension and health insurance terms.
Recommendations related to City Budget
Require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
Stop reimbursing retirees for Medicare Part B premiums.
The City and State should seek to place all new workers in defined contribution plans.
Increase required employee contributions.
Raise the minimum age requirement for retirement.
Base pension benefits on the more standard definition of final average salary.
Define work-related disabilities more rigorously.
Eliminate the variable supplements available to some retired New York City uniformed workers.
Key Data
$4.7 billion
— Projected City pension fund contributions in fiscal year 2008.
$2.3 billion
— City pension fund contributions in fiscal year 2004.
$6.3 billion
— Combined cost of health insurance for City and State in 2008.
$1.5 billion
— Combined cost to the City and State of health insurance for retirees in 2004.
43 percent
— Percentage of retired firefighters receiving additional benefits due to a job-related disability.
$12,000
— The amount of the annual variable supplement for certain uniformed workers by 2007.
New York's Medicaid program, which cost $36 billion in fiscal year 2003 and accounts for nearly 40 percent of state expenditures, could save $4.6 billion annually by tightening eligibility, lowering provider payment rates, and rationalizing service utilization. These reforms aim to bring New York's per-enrollee costs, currently at $7,646, closer to the national average of $3,936 while maintaining access to care for low-income residents.
Recommendations related to City Budget
More careful design and better enforcement of eligibility rules for the elderly and disabled will reduce the number of such people receiving Medicaid funded nursing home and home care services by about 24,000 or 8 percent of the current 300,000 individuals in New York State receiving long-term care.
Limiting Medicaid provider payments to rates based on competitive costs would save about $2.5 billion annually.
Efforts should be made to build the capacity among managed care organizations to manage care for elderly and disabled groups effectively, as they are the most expensive beneficiaries.
Bringing use of personal care services more in line with national norms would save about $1.0 billion annually by reducing the average number of hours of personal care authorized for clients.
The policy objective to which hospital leaders should adjust is a smaller role for New York hospitals in graduate medical education, rather than continued extra financial support in order to play the bigger educational role.
Key Data
$4.6 billion
— Annual savings possible by reversing the trend in Medicaid spending without reducing the program’s effectiveness in helping low-income New Yorkers obtain needed care.
$7,646
— Annual cost per person enrolled in the Medicaid program in New York, which is nearly double the national average of $3,936.
$36 billion
— Total spending for Medicaid in New York in fiscal year 2003, representing nearly 40 percent of total State expenditures.
64,000
— Estimated number of jobs statewide that would be reduced as a result of non-eligibility-related savings in the health care industry.
30 hours
— Average number of hours of home care paid for by Medicaid in New York per week, compared to 11 hours per week in the rest of the country.
47 percent
— Medicaid managed care participation rate in New York as of September 2003.
The City of New York faced an $8.8 billion budget gap for fiscal year 2004 due to rising expenditures and declining revenues following the September 11 attacks and the national recession. To address this, the City relied heavily on revenue increases, such as property tax hikes, while actual service cuts accounted for only a small portion of the gap-closing measures.
Key Data
$8.8 billion
— The projected fiscal year 2004 budget gap without offsetting actions taken since June 2001.
$3.1 billion
— The amount by which expenses have risen, contributing to the fiscal year 2004 budget gap.
$2.4 billion
— The amount by which tax revenues are expected to be lower in fiscal year 2004 than previously projected.
$4.8 billion
— The amount of revenue increases, accounting for 54 percent of the City's gap-closing plan.
$600 million
— The total amount of actual cuts in services identified by City agencies to close the budget gap.
$6,954
— The increase in compensation per employee in fiscal year 2004 compared to what had been planned in June 2001.
New York City faces an unprecedented $6.4 billion budget gap that cannot be solved by borrowing or relying on economic recovery, necessitating structural changes to government operations. Implementing reforms such as a 40-hour work week for civilian employees, streamlining procurement, and restructuring special education could generate over $1 billion in annual savings.
Recommendations related to City Budget
Those civilians not working a 40-hour week should be required to do so to save $498 million annually.
The City should implement an advanced e-procurement system to lower transaction costs and vendor prices.
The City should move 30,000 students from the most restrictive special education settings to less restrictive environments.
The Police Department should reschedule the work day to increase time in law enforcement and decrease paid time for changing uniforms.
The City should centralize responsibility for energy conservation within the Office of the Mayor to increase efficiency and negotiate savings targets.
Key Data
$6.4 billion
— Projected budget gap for fiscal year 2003-04.
$498 million
— Annual savings from a 40-hour work week for civilian employees.
$197 million
— Annual savings from streamlined procurement.
$267 million
— Annual savings from restructuring special education.
$251 million
— Annual savings from more rational staffing at the Police Department.
$47 million
— Annual savings from energy conservation at municipal agencies.
New York City's procurement process is hampered by excessive bureaucracy, reliance on paper, and fragmented oversight, resulting in long delays and unnecessary costs. Implementing a centralized "one-stop" procurement entity, adopting an advanced e-procurement system, and updating legal frameworks could yield annual savings of at least $135 million.
Recommendations related to City Budget
Replace the Mayor’s Office of Contracts with a new procurement entity that offers “one-stop” oversight, a central place for vendors to interact with the City, and improved agency support services.
Implement an advanced e-procurement system similar to those functioning in several other jurisdictions.
Change the legal framework for procurement to give the Procurement Policy Board more independence and to permit new, cost-effective procurement techniques.
Small purchase limits for all goods and services should be increased to $100,000.
Public hearings for non-competitively bid purchases should be required only for procurements above $500,000.
Permit the use of reverse auctions for some commodities.
Key Data
$8.6 billion
— Amount spent by the City on construction, goods, and services in fiscal year 2001.
12 million
— Estimate of the number of sheets of paper produced to execute procurements.
$135 million
— Minimum annual savings projected from implementing the recommended procurement reforms.
$200 million
— More likely annual savings payoff from implementing the recommended procurement reforms.
$75
— Estimated savings per transaction with an advanced e-procurement system.
$549 million
— Amount spent on contracts for goods in fiscal year 2001.
New York State's fragmented health insurance subsidy programs, including Medicaid and Child Health Plus, suffer from inefficient administrative structures that increase costs and prevent eligible residents from receiving coverage. The state should implement an integrated eligibility system, managed by the Department of Health, to streamline enrollment and reduce the administrative burden currently placed on local social service offices.
Recommendations related to City Budget
The Governor should give the Health Commissioner primary responsibility and authority for redesigning the health insurance subsidy system and its supporting information systems.
Eligibility determination for major health insurance programs should be integrated into a new system independent of the current public assistance eligibility bureaucracy.
The administration of the new system should rely on community-based organizations following the model of "facilitated enrollment" for interviewing clients and reviewing documentation.
The State should begin a longer-term process of integrating eligibility determination for all major means-tested programs, including non-health programs.
Public assistance recipients should not be automatically terminated from Medicaid when they lose cash benefits, but should be presumed eligible for Medicaid until a separate review is completed.
Key Data
$68 million
— The cost of 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
$21,248 million
— Total annual Medicaid expenditures in New York State in 1999.
51.6%
— The rejection rate for public assistance applications in New York City in 2000.
$248 million
— The administrative costs of public assistance in New York City in fiscal year 2000.
$117
— The administrative cost per recipient for 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
New York City's fiscal year 2002 budget reflects a structural imbalance characterized by rising headcount and spending that outpaces inflation, while failing to address long-term debt and productivity improvements. Despite efforts to reduce local tax burdens, the city relies on short-term fixes rather than comprehensive reforms to manage its $36 billion capital plan and growing out-year budget gaps.
Recommendations related to City Budget
The City should enact significant productivity improvements and invest wisely in its infrastructure to deliver more competitive services.
The City should use existing facilities more intensively, better maintain its assets, work to repeal the burdensome Wicks Law, and set effective limits on borrowing to improve its five-year $36 billion capital plan.
The City should pursue a comprehensive reform of the City’s debt practices to limit debt service growth.
Key Data
$36 billion
— The size of the City's five-year capital plan.
8 percent
— The annual growth rate of debt service payments over the next four years.
2 days
— The amount of time the legal deadline for passing the budget was extended.
25 years
— The timeframe over which City headcount has increased to its highest levels.
Municipal labor contracts, which account for half of the city's budget, require reform to improve service efficiency and fiscal sustainability. The proposed strategy involves restructuring pay to reward performance, modernizing health insurance through cost-sharing, and transitioning new hires to defined contribution pension plans.
Recommendations related to City Budget
Set pay levels in response to labor market conditions, with shortage occupations receiving greater wage increases than those for which there are abundant applicants.
Change work processes in ways that lower the unit cost of services.
Shift the emphasis in pay scales from longevity to performance by adding a merit pay component to wages.
Modernize the health insurance program for municipal workers and retirees by incorporating changes already prevalent in the private sector.
Streamline the administration of fringe benefits provided through union welfare funds and share the savings in administrative costs with the workers.
Restructure the pension system for newly employed workers to provide a defined contribution rather than a defined benefit plan.
Key Data
$19.2 billion
— Compensation of workers in fiscal year 2000, representing half of all municipal expenditures.
$3.2 billion
— The surplus achieved by the City in fiscal year 2000.
$3.5 billion
— The projected budget gap in fiscal year 2004 if raises equal to the projected rate of inflation are factored into the projections.
$1.4 billion
— The net savings in fiscal year 2004 from implementing the recommended labor and budget reforms.
$3.0 billion
— The combined savings from productivity initiatives and health insurance redesign in fiscal year 2004.
$1.6 billion
— The additional cost of agreements that would increase wages at the projected rate of inflation in fiscal year 2004.
New York State and New York City have seen their debt burdens grow rapidly, often circumventing constitutional limits through the use of public authorities and appropriation-backed debt. A new approach to debt affordability is proposed, which establishes a "danger zone" threshold based on a comparative analysis of debt-to-resource ratios to guide future borrowing decisions.
Recommendations related to City Budget
New York State's elected leaders should bring the State's debt burden below the danger zone threshold identified in this report, and New York City's leaders should keep their debt below the relevant danger zone threshold.
New York City and New York State should create Debt Policy Committees to recommend long-run debt strategies and annual debt issuance limits.
The State Constitution should be amended to establish new limits on State and City debt.
Key Data
$35.8 billion
— State debt at the end of the 1999 fiscal year.
$46.8 billion
— City debt at the end of the 1999 fiscal year.
$63.8 billion
— Total non-State-supported authority debt at the end of 1998.
$26.9 billion
— Outstanding appropriation-backed debt in the form of lease or other contractual agreements.
$32.3 billion
— New York City net direct and overlapping debt in fiscal 1998.
$36.6 billion
— New York City actual debt at the end of fiscal year 2000.
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