New York City’s annual budget reflects the total spending required to operate municipal agencies and provide services to residents, a figure that has frequently grown faster than inflation. This page covers CBC’s work on budget gaps, underbudgeting practices, labor productivity and overtime, agency headcount, and the use of rainy day funds.
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..
Mayor Mamdani’s first task should be to comb through City programs to identify and protect those that deliver significant positive impact and shrink those that do not.
The City should leverage technology, modernize outdated operations, and work with labor to boost productivity.
The spending plan should reflect the reported $1 billion in savings from rebidding the City’s health insurance plan.
The State should do its part by repealing the class size mandate, which restricts the Mayor’s flexibility and drives higher spending that widens the budget gap.
The Mamdani Administration should rein in spending growth by shrinking low impact services, and 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
In July 2026, the CBC reported that a proposed legislative pay bill would bypass the budget process and add $325 million in unbudgeted spending just two weeks after the budget's adoption.
In February 2026, the CBC noted that over the last decade, spending growth consistently outpaced inflation, and the City would be spending roughly $15 billion less today if spending had merely kept pace with inflation.
In July 2024, the CBC analyzed the fiscal year 2025 adopted budget and found that it increased City-funded spending by 7.5%, or $6.1 billion, compared to fiscal year 2024.
In November 2023, the CBC reported that City-funded spending had increased by more than 50% over the past decade, while recurring revenues did not keep pace.
A proposed City Council bill, Intro 692-A, would bypass the collective bargaining process and add $325 million in unbudgeted spending just two weeks after the budget's adoption. Enacting this legislation could set a dangerous precedent, prompting other unions to seek similar legislative pay increases and exposing the city to substantial future costs.
Recommendations related to City Expenditure Growth
Intro 692-A, the paraprofessional pay bill, should not become law because legislating compensation would wrongly circumvent the collective bargaining process and set a dangerous precedent with significant fiscal consequences.
Compensation should be negotiated through the collective bargaining process to balance the desire for raises with the City’s fiscal capacity and its negotiations with other unions.
The City Council should reject this bill, which would add $325 million in spending just two weeks after the budget was adopted.
If the bill is passed, the Mayor should veto it to prevent exposing the City to substantial future costs.
The City should continue to determine employee compensation at the bargaining table, not the legislative chamber, to avoid mandating additional spending outside of the budget.
Key Data
$325 million
— The amount of additional spending Intro 692-A would add just two weeks after the budget was adopted.
New York City's fiscal challenges stem primarily from excessive spending growth, with the city spending $2.3 billion more than it received over the past three years. To achieve long-term fiscal sustainability, the city must focus on operational efficiencies, such as streamlining administrative functions and reforming capital planning, rather than raising taxes.
Recommendations related to City Expenditure Growth
The Mayor should ensure Executive Order 12 supports a multi-year improvement plan that emphasizes recurring savings driven by productivity, service redesign, and evidence-based impact.
City agencies should be given appropriate ambitious targets, but savings should be prioritized to preserve critical services and not uniform across the board.
Agencies should identify efficiencies based on aligning staffing and workload, streamlining administrative functions, leveraging technology to automate manual processes, and eliminating or redesigning programs that have not demonstrated effectiveness.
The City should address persistent growth in overtime spending through improved management, civilianization, and technology.
The City should augment current efforts with a citywide, data-driven management framework that supports continuous improvement.
The City should pursue careful capital planning and project delivery reform.
The City should prioritize state-of-good-repair investments and improve capital execution to help control capital costs, moderate debt service, and reduce maintenance spending over time.
The City should seek greater flexibility from Albany, including relief from the class-size mandate, which constrains local decision-making and requires additional resources be spent on already high-performing schools.
Key Data
$2.3 billion
— The amount the City spent in excess of what it received over the past three years.
$15 billion
— The approximate amount less the City would be spending today if spending growth over the last decade had merely kept pace with inflation.
New York City faces a projected fiscal year 2027 budget gap approaching $8 billion, driven by spending growth that has outpaced inflation for years. To address this, the city must prioritize high-impact programs, modernize operations, and repeal the class size mandate to reduce fiscal burdens.
Recommendations related to City Expenditure Growth
Mayor Mamdani’s first task should be to comb through City programs to identify and protect those that deliver significant positive impact and shrink those that do not.
The City should leverage technology, modernize outdated operations, and work with labor to boost productivity.
The spending plan should reflect the reported $1 billion in savings from rebidding the City’s health insurance plan.
The State should do its part by repealing the class size mandate, which restricts the Mayor’s flexibility and drives higher spending that widens the budget gap.
Key Data
$8 billion
— Estimated fiscal year 2027 budget gap for New York City.
$14.5 billion
— Amount by which city spending would be lower today if it had tracked inflation.
$1 billion
— Projected savings from rebidding the city's health insurance plan.
Mayor-elect Mamdani faces a significant budget gap of $5 billion to $8 billion, requiring immediate action to control spending growth and improve fiscal efficiency. The current budget plan continues to underfund essential services by at least $4 billion annually, including critical allocations for CityFHEPS and homeless shelters.
Recommendations related to City Expenditure Growth
The Mamdani Administration should rein in spending growth by shrinking low impact services, and 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 for CityFHEPS that the budget continues to underfund.
$600 million
— The amount of annual planned spending for homeless shelters that the budget continues to underfund.
Download the Presentation The New York State and New York City budgets are unaffordable and unprepared both for a recession and for federal budget cuts that will start hitting this fiscal year and grow in the future. Check out CBC’s New York State and New York City Fiscal…
New York City faces significant fiscal challenges as spending outpaces revenue, contributing to a decline in quality of life and a net loss of residents to other states. To restore competitiveness and ensure long-term stability, the city must prioritize fiscal discipline, improve service delivery, and focus on essential infrastructure maintenance.
Recommendations related to City Expenditure Growth
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.
Let’s focus on evidence-based programs in education and mental health and make the hard choice to eliminate ineffective initiatives, regardless of their political popularity.
We 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.
We need to first choose to get our roads, bridges, and buildings into good shape or we will have no foundation on which to build our future economy.
Key Data
$115 billion
— The city's annual budget.
11%
— The percentage of New Yorkers who say the city is wisely spending its annual budget.
half a million
— The number of residents lost during the pandemic’s peak.
100,000
— The number of net residents lost to Florida between 2018 and 2022.
$13.7 billion
— The amount of personal income lost to Florida between 2018 and 2022.
The City's financial planning process requires reform to address the increasing practice of underbudgeting for predictable expenses, which distorts the fiscal picture and compromises budget accuracy. Implementing stricter requirements for financial estimates and establishing clear rules for the Rainy Day Fund would improve fiscal discipline and ensure the City is better prepared for economic downturns.
Recommendations related to City Expenditure Growth
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 to improve agency management and responsiveness to New Yorkers' needs.
The Charter should require the City to deposit money into its Rainy Day Fund 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.
Local law should require mandatory formula-determined deposits, limit withdrawals to a recession or severe emergency, and set a target size for the Rainy Day Fund.
The Charter should require a 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 a 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
— Amount added to current year spending in this fiscal year's quarterly budget modifications for expenses that were predictable.
10 percent
— Threshold for requiring a detailed explanation of causes for projected changes in tax revenues or major program expenditures.
20 percent
— Threshold for requiring a detailed explanation of causes when executive expense budget estimates vary from City or State Comptroller estimates.
five years
— Frequency at which the City should be required to conduct and publish a statistically valid resident feedback survey.
New York City faces significant budget gaps, with projected shortfalls of $5.6 billion in fiscal year 2027 and $6.3 billion in fiscal year 2028, which are exacerbated by the consistent underbudgeting of essential programs. To ensure long-term fiscal stability, the city must accurately estimate expenses, avoid relying on precarious spending, and prioritize mandatory deposits into the Rainy Day Fund.
Recommendations related to City Expenditure Growth
The City must ensure spending is affordable in fiscal year 2026 and beyond by providing accurate and reasonable estimates of future revenues and expenses.
New programs and initiatives must be paid for with higher revenues or offsetting savings to avoid widening future budget gaps.
The City should make mandatory deposits to the Revenue Stabilization Fund in fiscal year 2025 to prepare for potential economic downturns.
The City should proactively assess potential risks and opportunities regarding federal changes without taking pre-emptive actions.
Key Data
$5.5 billion
— Reported budget gap for the upcoming fiscal year that the administration must close.
$2.0 billion
— Estimated amount the City currently underbudgets for spending in fiscal year 2025.
$3.6 billion
— Estimated amount the City currently underbudgets for spending in fiscal year 2026.
$5.6 billion
— Total projected budget gap for fiscal year 2027.
$6.3 billion
— Total projected budget gap for fiscal year 2028.
$11 billion
— Estimated revenue loss the City would face during an average recession.
The fiscal year 2025 adopted budget increases City-funded spending by $6.1 billion, or 7.5 percent, over the previous year. This growth continues a trend where City-funded spending has risen by $17.8 billion, or 25.5 percent, between fiscal years 2020 and 2025.
Recommendations related to City Expenditure Growth
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
$6.1 billion
— The increase in City-funded spending in the fiscal year 2025 adopted budget over fiscal year 2024.
7.5 percent
— The percentage increase in City-funded spending in the fiscal year 2025 adopted budget over fiscal year 2024.
$17.8 billion
— The total growth in City-funded spending from fiscal year 2020 to fiscal year 2025.
25.5 percent
— The percentage growth in City-funded spending 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 of funds earned in prior years that the City used to balance fiscal year 2024.
New York City's Fiscal Year 2025 Executive Budget increases City-funded spending by 6.3 percent, yet relies on underbudgeted estimates that obscure future fiscal challenges. With roughly $2 billion in annual services underbudgeted, the city faces projected budget gaps between $5.5 billion and $5.7 billion from fiscal years 2026 through 2028.
Recommendations related to City Expenditure Growth
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.
The City must ensure that spending growth is restrained to avoid the danger of a looming fiscal wall.
The City should avoid adding more unaffordable spending to the budget to prevent future service cuts.
Key Data
$5.5 billion to $5.7 billion
— The projected budget gaps between fiscal years 2026 and 2028.
$2 billion
— The amount of services annually underbudgeted in the city's financial plan.
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 remain underbudgeted.
New York City faces significant fiscal uncertainty due to understated spending projections and overly conservative revenue estimates, which could lead to budget gaps exceeding $17.4 billion by fiscal year 2028. To ensure long-term stability, the city must adopt more accurate budget estimates, prioritize essential programs, and implement productivity-focused savings plans rather than relying on blunt hiring freezes.
Recommendations related to City Expenditure Growth
Include reasonable estimates of costs of all planned programs in the budget.
Provide accurate, but reasonably conservative revenue estimates.
Allocate funded vacancies to where they are most needed to provide critical services.
Allow agencies to hire into funded positions and spend their budgets on needed programs.
Reduce future budget gaps by prioritizing spending to fund what is needed and proven to work.
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.
Key Data
$3.0 billion and $3.9 billion
— The estimated range of underbudgeting for the City's fiscal year 2025 financial plan.
$8.0 billion
— The amount future annual budget gaps could exceed without accounting for additional program costs.
$17.4 billion
— The potential budget gap by fiscal year 2028 when including all risks and expanded program costs.
$1.5 billion
— The additional cost for migrant and asylum seeker services in fiscal year 2026.
$4.9 billion
— The projected cost of the City FHEPS housing voucher expansion in fiscal year 2028.
$1.4 billion
— The projected cost of the class size reduction mandate in fiscal year 2028.
$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 massive projected budget gap of up to $13.8 billion next year, driven by a 50% increase in city-funded spending over the past decade and $16 billion in unfunded employee raises. To stabilize its finances, the city must prioritize essential services, eliminate temporary programs, and implement efficiency reforms across agencies.
Recommendations related to City Expenditure Growth
To stabilize the budget and minimize any pain from cuts, the city should prioritize the most impactful programs first, allowing it to end programs meant to be temporary and consolidate duplicative efforts.
City agencies should implement changes to deliver services more efficiently to help the city run better.
The city should examine how it uses space and vehicles, and identify savings through centralized procurement.
The city's headcount should be managed smartly, making nuanced decisions based on staffing and performance to ensure government functions well.
Strong consideration should be given to reviving the Program to Eliminate the Gap (PEG) monitoring function that the New York State Financial Control Board provided years ago.
Key Data
50%
— Increase in city-funded spending over the past decade, which has outpaced recurring revenues.
$16 Billion
— Amount added to the budget for city worker raises without an identified funding source.
$2.5 Billion
— Value of programs, from housing vouchers to early education, funded and grown using temporary federal Covid aid and a tax revenue surge.
$9.9 Billion
— Projected budget gap for next year under a lower estimate assuming higher tax revenues and lower migrant costs.
$13.8 Billion
— Potential upper limit of the projected budget gap for next year.
42%
— Maximum share of the Fiscal Year 2025 budget gap attributed to the costs of caring for asylum seekers and migrants.
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 City faces a precarious long-term fiscal outlook with projected budget gaps reaching $4.6 billion in fiscal year 2025 and $5.9 billion in fiscal year 2026. To ensure future stability and avoid service cuts or tax increases, the City must immediately restrain long-term spending and improve the efficiency of government operations.
Recommendations related to City Expenditure Growth
The City must take 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.
Agencies should have flexibility to shift vacant positions across and within agencies to units and titles that have critical staffing needs.
The City must improve the quality and efficiency of the City’s operations today to preserve services for New Yorkers.
More transformative changes are needed to ensure future fiscal stability.
Key Data
$4.6 billion
— Projected budget gap for fiscal year 2025.
$5.9 billion
— Projected budget gap for fiscal year 2026.
$8 billion
— Potential budget gap in fiscal year 2025 absent a recession.
$10 billion
— Potential budget gap in fiscal year 2026 absent a recession.
$350 million
— Expected annual savings from the elimination of roughly 5,000 vacant civilian positions.
$1.6 billion
— Spending reduction achieved in fiscal year 2024 through the Program to Eliminate the Gap.
New York City faces significant budget gaps, with projections reaching $4.2 billion in fiscal year 2024, $3.7 billion in 2025, and $4.0 billion in 2026, excluding various budgetary risks. To address these challenges, the City has initiated a Program to Eliminate the Gap, targeting $1 billion in savings for fiscal year 2023 and $1.6 billion annually starting in fiscal year 2024.
Key Data
$4.2 billion
— Reported budget gap in fiscal year 2024.
$3.7 billion
— Reported budget gap in fiscal year 2025.
$4.0 billion
— Reported budget gap in fiscal year 2026.
$1 billion
— Expected savings target for fiscal year 2023.
$1.6 billion
— Expected annual savings target starting in fiscal year 2024.
$10 billion
— Potential future budget gaps warned by City and State Comptrollers.
The New York City Police Department's fiscal year 2023 budget totals $10.9 billion, driven by collective bargaining agreements and increased funding for technology and safety initiatives. Despite these budget adjustments, the department faces significant overtime spending that is projected to exceed the current budget by $136 million without improved managerial controls.
Recommendations related to City Expenditure Growth
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 to the NYPD City-Funded Budget in the Fiscal Year 2023 Executive Budget.
$743 million
— Estimated total overtime spending by the end of fiscal year 2022.
$136 million
— Amount by which estimated overtime spending exceeds the modified Executive Budget.
$524 million
— Uniformed overtime spending in fiscal year 2022.
$2.9 billion
— Amount allocated for pensions within the NYPD budget.
The New York City Housing Authority faces significant financial instability, with operating costs rising faster than revenues and a reliance on city subsidies that has grown steadily over the past decade. To address these issues, the authority must implement structural reforms, including the approval of the Preservation Trust and improvements in labor productivity to align costs with industry standards.
Recommendations related to City Expenditure Growth
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 must implement labor productivity increases, which would bring operating costs in line with industry benchmarks and maximize the potential benefits of the Preservation Trust.
NYCHA, in collaboration with its federal monitor, HUD, and labor, needs to redouble efforts to boost productivity and bring operating costs closer to peer housing authorities and private property managers.
Converting from Section 9 funding to alternative federal funding programs like Section 8 or Tenant Protection Vouchers allows NYCHA to raise capital to renovate buildings and restore habitability.
Key Data
$2.7 billion
— Public housing operating expenses in the 2022 adopted budget.
$1.2 billion
— Operating funds spent since 2018 on various action plans mandated under the HUD settlement agreement.
$132 million
— The potential increase in the budget gap if the rent collection rate continues at 70 percent in 2022.
$286 million
— City subsidies received by NYCHA in 2021 to balance its budget.
$359 million
— Operating funds spent in 2021 alone on action plans mandated under the HUD settlement agreement.
$1,300
— Projected monthly operating costs per unit in 2022.
The NYPD's budget is set to increase by $465 million in fiscal year 2022, reversing a previous spending decrease and highlighting ongoing challenges in controlling costs like overtime. Despite efforts to transfer certain functions to other agencies, the department's total city-funded budget remains a significant portion of city expenditures.
Key Data
$465 million
— The amount of the spending increase in the fiscal year 2022 adopted budget for the NYPD compared to fiscal year 2021.
$474 million
— The total amount of overtime expenditures for the NYPD in fiscal year 2021, which was 77 percent over budget.
$322 million
— The total amount of the fiscal year 2021 budget cut to the NYPD's city-funded expenditures.
$10.4 billion
— The total city-funded NYPD budget for fiscal year 2022, including agency and central expenditures.
$306 million
— The amount of intra-city revenue anticipated to shift from the NYPD to the Department of Education in fiscal year 2023 for school safety personnel.
$42.4 million
— The fiscal year 2021 budget amount for the School Crossing Guards unit, which was announced for transfer but remains in the NYPD budget.
The Fiscal Year 2022 Adopted Budget temporarily reversed hiring and attrition savings plans, resulting in an authorized headcount of 337,294, which is nearly the highest ever. While the budget restores funds for hiring in the short term, it leaves the responsibility for achieving significant staff reduction targets to the next administration.
Key Data
337,294
— Authorized headcount for fiscal year 2022, which is nearly the highest ever.
$30.4 million
— Attrition savings in the fiscal year 2022 Adopted Budget following restorations.
11,395
— Total increase in authorized positions across 44 agencies from fiscal year 2021 to fiscal year 2022.
3,987
— Average number of positions associated with the $283 million in annual attrition savings for fiscal years 2023 to 2025.
New York City faces a significant fiscal crisis requiring $1 billion in recurring labor savings to avoid widespread layoffs. Achieving these savings involves rationalizing employee benefits, such as health insurance premium sharing, and implementing productivity reforms like modifying work rules and staffing models.
Recommendations related to City Expenditure Growth
The City should work with the MLC 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 VSFs and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could make four firefighters the standard staffing 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.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
The City should reinvigorate the partnership with the MLC with the goal of implementing a new premium-sharing arrangement.
The pay scale for sanitation workers should be revised to establish new productivity targets and compensation structures.
Key Data
$1 billion
— The amount of recurring savings the Adopted Budget for Fiscal Year 2021 calls for from negotiations with labor unions.
$1.1 billion
— The amount of uniformed-agency overtime budget in fiscal year 2019.
$1.2 billion
— The estimated value of the taxpayer-provided guarantee for the tax-deferred annuity (TDA) annually.
$105 billion
— The estimated long-term liability for retiree health and welfare benefits (OPEB).
$2.2 billion
— The annual cost of pre-Medicare retiree health insurance benefits in fiscal year 2020.
$1.3 billion
— The projected cost of City payments to welfare funds in fiscal year 2020.
New York City faces a $7.4 billion tax revenue shortfall over two fiscal years, yet city-funded spending continues to grow with only 2.1 percent in cuts for fiscal year 2021. Legislative leaders are urged to reject proposed long-term borrowing for operating expenses until all other budget-balancing options are exhausted.
Recommendations related to City Expenditure Growth
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.
City leaders must take sufficient action to reduce expenditures, which is necessary before borrowing for operations is considered.
Borrowing should only be used as a last resort after other actions are exhausted and federal aid proves insufficient.
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 and the city’s long-term attractiveness.
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 City's municipal workforce grew to an all-time high of 326,739 in fiscal year 2019, an 11.3 percent increase from the fiscal year 2012 low. To address looming multiyear budget gaps and fiscal instability, the city must implement an assertive strategy to reduce its workforce size while minimizing service impacts.
Recommendations related to City Expenditure Growth
The Administration should act now to shrink the workforce with the least impact on services.
The Adopted Budget should show the decline in headcount that will be needed to manage the next few fiscal years.
Key Data
326,739
— All-time high municipal employment reached at the end of fiscal year 2019.
11.3 percent
— Increase in municipal employment from the fiscal year 2012 trough to fiscal year 2019.
$5 billion
— Projected outyear budget gap in fiscal year 2022.
17,468
— Reduction in full-time and full-time equivalent personnel from fiscal year 2008 to fiscal year 2012.
5.6 percent
— Percentage reduction in personnel from fiscal year 2008 to fiscal year 2012.
New York City faces a potential $6 billion revenue shortfall due to the pandemic, necessitating a more aggressive approach to budget management than the currently proposed $1.3 billion savings target. To ensure fiscal stability, the city must control non-critical spending and implement a $3 billion savings program focused on operational efficiency rather than relying on debt service savings or funding shifts.
Recommendations related to City Expenditure Growth
The savings plan should be significantly larger and explicitly focused on generating recurring savings in spending.
The City should control all non-critical spending in the current year.
The City should 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 work with municipal unions on workforce savings.
Key Data
$6 billion
— Estimated revenue shortfall in fiscal years 2020 and 2021.
$20 billion
— Potential revenue shortfalls over three fiscal years based on prior recessions.
$3 billion
— Recommended target size for next year's savings program.
$1.3 billion
— Savings target announced for the Executive Budget for Fiscal Year 2021.
0.91 percent
— Percentage of city-funded spending represented by the $1.3 billion savings target.
0.23 percent
— Average efficiency savings previously achieved by city agencies.
New York City's budget grew by $19 billion between fiscal year 2014 and 2019, reaching a total of $96 billion. This increase was driven by federal and state mandates, inflationary costs, wage increases, and the priorities of the de Blasio administration, with education, health, and social services accounting for over two-thirds of agency spending growth.
Key Data
$19 billion
— Total New York City budget growth from fiscal year 2014 to fiscal year 2019.
$96 billion
— Total New York City budget in fiscal year 2019.
$10 billion
— Increase in agency budgets accounted for by Education, Social Services, Homeless Services, and Police.
4.5%
— Average annual growth rate of the New York City budget between fiscal year 2014 and fiscal year 2019.
$15 billion
— Increase in spending by City agencies.
$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.
$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.
In fiscal year 2018, New York City employed roughly 297,000 full-time workers with an average total pay of $80,978, which includes base salary, overtime, and other compensation. Uniformed employees earned an average of $107,000 annually, significantly higher than the $70,726 average for civilian employees and $76,114 for pedagogical staff.
Key Data
$80,978
— Average total pay for the roughly 297,000 active full-time New York City employees in fiscal year 2018.
$107,000
— Average annual pay for uniformed employees in fiscal year 2018.
$70,726
— Average annual pay for civilian employees in fiscal year 2018.
$76,114
— Average annual pay for pedagogical employees in fiscal year 2018.
$15,000 and $23,000
— Average annual overtime earnings for uniformed employees.
$10,000
— Average annual overtime for civilians in several agencies, including the Departments of Transportation, Correction, Citywide Administrative Services, and Fire.
New York City's municipal workforce has expanded to a record 331,520 employees, adding $2.5 billion in annual personnel expenses and $520.5 million in long-term liabilities in fiscal year 2019. This rapid growth creates significant budgetary risks should an economic downturn occur, necessitating stricter management of headcount and vacant positions.
Recommendations related to City Expenditure Growth
Vacant positions should be reviewed, assessed, and if unneeded, removed from the budget for all years of the financial plan.
Agencies should be required to justify why a new responsibility cannot be completed with existing resources rather than creating new positions.
The City should undertake a review of all positions to identify obsolete assignments that could be replaced by technology, integrated into other positions, or eliminated.
The City should pursue broader reforms to restructure the workforce that require changes to collective bargaining rules and civil service laws to improve efficiency and maximize productivity.
Agencies should be required to look for opportunities to redeploy existing staff or utilize vacant lines when a new initiative is added.
Key Data
331,520
— Projected municipal workforce by the end of fiscal year 2019.
$2.5 billion
— Gross annual compensation costs for 26,436 new full-time employees in fiscal year 2019.
$520.5 million
— Total estimated long-term costs associated with additional hires in fiscal year 2019.
$56.2 billion
— Unfunded pension liability at the end of fiscal year 2017.
$88.4 billion
— Unfunded OPEB liability at the end of fiscal year 2017.
11.5 percent
— Increase in municipal workforce from the end of fiscal year 2014 to the end of fiscal year 2019.
New York City's fiscal year 2019 budget features a 7.4 percent increase in city-funded operating spending and a ballooning $65.1 billion capital plan, raising concerns about fiscal sustainability. To manage these costs, the city should limit workforce expansion, secure labor concessions, and prioritize capital projects that emphasize a state of good repair.
Recommendations related to City Expenditure Growth
In negotiating new collective bargaining agreements, the City should ensure that raises in excess of the 1 percent per year the City has set aside are funded through concessions or productivity increases and substantial health care savings.
The City must 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.
The City should use current resources as “pay-go capital” instead of borrowing to invest in infrastructure without increasing long-term liabilities.
Key Data
7.4 percent
— Increase in City-funded operating spending in the Fiscal Year 2019 Adopted Budget.
$65.1 billion
— Projected capital spending for fiscal years 2019 to 2022 in the Executive Capital Commitment Plan.
$4.7 billion
— Increase in City-funded spending from fiscal year 2018.
33,000
— Number of positions the City workforce has already grown by.
$1.8 billion
— City's subsidy to New York City Health + Hospitals in fiscal year 2019.
$25 billion
— 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…
402 is the projected headcount at the Department of Investigation at the end of FY 2018. Since 2013, the DOI’s budget has grown from $30.6 million to $48.2 million, an increase of 58%. DOI Commissioner Mark Peters discusses the reasons behind this growth and the major investigations he has led.
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.
The 2018 Benefit Sweetener Scorecard tracks various legislative proposals that would have increased public employee pension and disability benefits, resulting in significant potential costs to taxpayers. These vetoed bills highlight the ongoing pressure to expand retirement and benefit packages, which would have added millions in recurring and one-time expenditures to public budgets.
Key Data
$13.20 Million
— One-time past service cost for enhancing the in-service death benefit for State correction officers.
$2.42 Million
— Increased annual contributions and immediate past service cost for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Annual cost increase for removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs for allowing Tier 6 uniformed court officers to retire without early age reduction.
$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 Preliminary Budget for Fiscal Year 2019 fails to address potential budget cuts from federal tax law changes or state actions, while also neglecting to add to city reserves. Spending growth continues to outpace inflation, and the city's reliance on debt service savings and reimbursements rather than efficiency improvements leaves the budget vulnerable.
Recommendations related to City Expenditure Growth
The Mayor should limit spending growth, bolster the savings plan, and add to reserves.
The City should contain spending growth to attain fiscal stability.
The City should build reserves to attain fiscal stability.
The City should adapt the capital plan to a resource-constrained environment.
The City should strengthen finances at the New York City Housing Authority (NYCHA) and NYC Health+Hospitals (H+H).
New York City's uniformed overtime spending has grown rapidly, reaching $1.7 billion in fiscal year 2016, which accounts for 8 percent of the city's total salary expenditures. To address this fiscal challenge, the city must implement systemic reforms, such as labor-management committees and caps on overtime, to control costs that have consistently exceeded budgets.
Recommendations related to City Expenditure Growth
The City should establish a uniformed labor-management committee as part of the next round of collective bargaining in order to reduce uniformed overtime spending.
The City should adopt a system in which routine sick leave usage is accrued and capped (as for NYC civilian employees).
The City should change certain work rules, such as eliminating overtime for travel to alternate work locations and guaranteed minimum overtime hours.
The City should institute a per employee cap on overtime hours or overtime earnings, as exists for civilian employees.
The City should consider capping or eliminating overtime earnings in calculating final average salary for pensions.
Key Data
$1.7 billion
— Total overtime spending in fiscal year 2016.
$1.8 billion
— Projected overtime spending for fiscal year 2017 as of June 2017.
$19,400
— Average overtime compensation paid per uniformed employee in fiscal year 2016.
$509 million
— Amount by which the fiscal year 2017 overtime budget was projected to exceed the adopted amount.
$1.4 billion
— Adopted fiscal year 2018 budget for overtime expenses.
8 percent
— Fiscal year 2016 overtime spending as a share of the city's total spending on salaries.
New York City's public housing authority has achieved short-term financial stability through increased City and federal support, but its long-term budget remains precarious due to high operating costs and potential federal funding cuts. To ensure future viability, the authority must accelerate the implementation of its 'NextGen' reforms, including labor and operational efficiencies.
Recommendations related to City Expenditure Growth
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
$1.1 billion
— Personnel costs for operating public housing in 2016.
$519 million
— Utility costs for public housing in 2016.
$171.8 million
— Public housing operating surplus in 2015.
$36 million
— Public housing operating surplus in 2016.
$80 million to $130 million
— Proposed federal budget cut to annual operating subsidies.
$210 million
— Proposed federal budget reduction in the capital subsidy.
The Access-A-Ride paratransit program, which cost $461 million in 2015, is the most expensive in the nation due to high utilization and unit costs, with expenses projected to reach $646 million by 2020. To improve efficiency and reduce the burden on regular transit riders, the program should shift ambulatory trips to lower-cost providers, increase fares, and pursue Medicaid reimbursement for non-emergency medical transport.
Recommendations related to City Expenditure Growth
The MTA could shift ambulatory trips to its broker car service (BCS) program, which uses a for-hire vehicle broker to complete trips using black cars and liveries, potentially saving up to $126 million annually.
The MTA could establish a subsidy program for AAR trips completed by taxicabs and other for-hire vehicles, allowing registrants to hail a cab or secure a black car or livery without reserving the trip in advance, which could save up to $28 million annually in Manhattan's hail zone.
The MTA could overhaul its contracting relationships by altering its service design and contracting a single, full-service broker to consolidate multiple management layers, which could save up to $30 million annually.
The MTA should revisit the policy of doubling paratransit fares, which could generate net fiscal benefits of between $71 million and $184 million annually.
The MTA should offer feeder service, trips that connect users with accessible fixed-route stops rather than door-to-door service, in a greater number of appropriate situations, which could save up to $20 million annually.
The MTA should seek Medicaid reimbursement for non-emergency medical transport (NEMT) trips, which could generate an additional $10 million to $14 million annually.
Key Data
$461 million
— The total cost of the Access-A-Ride program in 2015.
$71
— The cost per trip for Access-A-Ride in 2014, the highest among 29 cities with large paratransit programs.
17
— The number of Access-A-Ride registrants per 1,000 residents in the service area, the highest among 29 peer systems.
$126 million
— The potential annual savings from moving all ambulatory customers to the broker car service (BCS) program.
$184 million
— The potential annual savings from doubling paratransit fares.
$30 million
— The potential annual savings from implementing a full-service brokerage system design.
Legacy costs, including debt service, pensions, and retiree health benefits, are projected to grow significantly, outpacing other city spending and reaching over $20 billion by fiscal year 2020. Implementing reforms to retiree health benefits, such as requiring premium contributions and eliminating specific reimbursements, could generate up to $1.6 billion in savings to help curb this expenditure growth.
Recommendations related to City Expenditure Growth
Some infrastructure improvements should be funded through current year resources to slow the growth of debt service.
Annual proposals to enhance benefits should be rejected to prevent unnecessary expenditure growth.
Retirees should share the cost of health premiums to bring retiree health costs in line with other state and local governments.
Reform of union welfare funds is needed, and consolidating supplementary health care benefits under the city’s health plan would be more efficient.
Medicare Part B premium reimbursements should be eliminated as this benefit is uncommon among public employers.
Key Data
$20.9 billion
— Legacy costs projected for fiscal year 2020.
$17.4 billion
— Legacy costs in fiscal year 2016.
$1.6 billion
— Potential savings from three specific health benefit reforms by fiscal year 2020.
$8.4 billion
— Projected debt service for the City’s debt obligations by fiscal year 2020.
$6.1 billion
— Debt service for the City’s debt obligations in fiscal year 2016.
$2.9 billion
— Annual cost of retiree health benefits by fiscal year 2020.
Municipal employee compensation is the largest driver of an $11.7 billion increase in city spending through fiscal year 2020, with average per-employee costs projected to reach $158,000. Rapidly rising health insurance premiums, which are currently paid in full by taxpayers for employees and retirees, represent a significant and growing financial burden on the city.
Recommendations related to City Expenditure Growth
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
— Total increase in city spending projected through fiscal year 2020.
$137,000
— Average annual compensation per full-time city employee.
$70 billion
— Total city liability for retiree health insurance costs and other post-employment benefits.
$158,000
— Projected average annual compensation per full-time city employee by 2020.
$2.1 billion
— Savings realized through fiscal year 2017 from health cost initiatives.
23,197
— Projected increase in the city workforce between fiscal years 2014 and 2020.
New York City's planned spending is set to increase by $17.8 billion, or 24 percent, through fiscal year 2020, with personal service costs serving as the primary driver of this growth. This expenditure expansion is largely fueled by rising compensation per employee and increased debt service, while specific agency spending is dominated by the Department of Education, the Police Department, and the Department of Correction.
Key Data
$17.8 billion
— The planned increase in total expenditures from the time Mayor Bloomberg left office to fiscal year 2020.
24 percent
— The total planned increase in expenditures through fiscal year 2020.
$11.7 billion
— The increase in personal service spending, which accounts for nearly two-thirds of the total planned spending increase.
$158,258
— The average compensation cost per employee in fiscal year 2020.
$2.8 billion
— The planned increase in City-funded expenditures for the Department of Education.
$8.2 billion
— The amount of debt service in fiscal year 2020.
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.
The New York State Legislature has introduced eight new bills to enhance public employee benefits, adding to a scorecard of over 60 similar proposals that threaten to increase municipal pension costs. Two specific proposals alone would cost the City of New York millions of dollars annually, with one bill increasing pension contributions by $27 million in 2017 and $40 million by 2021.
Key Data
8
— The State Legislature has introduced 8 new bills to enhance the benefits of State and local public employees and retirees.
$4.7 million
— The costs to the City for bill S7530/A10055 would be $4.7 million in 2017.
$8.3 million
— The costs to the City for bill S7530/A10055 would grow to $8.3 million in 2021.
$27 million
— Proposal S7421/A10044 would increase New York City pension contributions by $27 million in 2017.
$40 million
— Proposal S7421/A10044 would increase New York City pension contributions to $40 million in 2021.
New York City's executive budget increases spending by $2.5 billion in fiscal year 2017, relying on a $3.4 billion surplus that will be exhausted by 2018. To manage future budget gaps ranging from $2.2 billion to $3.0 billion, the city must successfully implement an ambitious savings program and address the fiscal crisis at Health + Hospitals.
Recommendations related to City Expenditure Growth
The city must follow up effectively and move quickly to stop the bleeding of cash at Health + Hospitals to keep the city’s budget balanced.
The city must implement an enhanced Citywide Savings Program and other gap-closing measures to sustain increased spending in a less prosperous future.
The city must secure an agreement with the state to share Medicaid savings to ensure the Citywide Savings Program achieves its goals.
Key Data
$2.5 billion
— increase in city-funded spending in fiscal year 2017 compared to fiscal year 2016
$2.2 billion to nearly $3.0 billion
— projected budget gaps facing the city after fiscal year 2017
$1.8 billion
— projected deficits for Health + Hospitals in 2020
$3.4 billion
— surplus 'roll' from good times that will be exhausted by fiscal year 2018
$497 million
— emergency support provided to the hospital system in the current fiscal year
$180 million
— debt service payments for Health + Hospitals forgiven by the city in fiscal year 2017
The fiscal year 2017 executive budget increases city-funded spending by $2.5 billion compared to the previous year, with significant allocations for the Department of Homeless Services, the Human Resources Administration, and the Department of Education. While the plan includes $1.25 billion in savings, these are largely dependent on uncertain Medicaid revenues and debt service re-estimates rather than agency-driven efficiencies, creating potential risks for future budget gaps.
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.
$339 million
— Additional funding for the Department of Homeless Services and the Human Resources Administration.
$217 million
— Additional funding for the Department of Education.
$160 million
— Additional funding for NYC Health + Hospitals.
$1.25 billion
— Additional savings included in the plan for fiscal years 2016 and 2017.
New York City's fiscal planning for 2017 faces pressure from rising overtime costs, potential cash shortages at Health + Hospitals, and the need to balance new spending initiatives against a softening economy. While the city projects revenues of $82.1 billion for fiscal year 2017, it must address significant capital needs and the impact of state budget decisions that withhold $600 million in sales tax revenue.
Recommendations related to City Expenditure Growth
The administration should ensure that budget reserves grow steadily during periods of economic prosperity.
The city should resist the temptation to raid the Retiree Health Benefits Trust to provide budget relief.
The administration should increase the size of the Citywide Savings Plan by setting savings targets of 5 percent for all agencies to meaningfully offset new spending.
The city must ensure that the turnaround plan for NYC Health + Hospitals accompanies the Executive Budget to address its fiscal pressures.
Key Data
$82.1 billion
— Projected revenue for fiscal year 2017.
$1.4 billion
— Record overtime costs for all agencies in fiscal year 2015.
$1.85 billion
— Five-year Citywide Savings Plan for fiscal years 2016 to 2020.
$600 million
— Sales tax revenue withheld by the State's Enacted Budget.
$3.1 billion
— Current balance of the Retiree Health Benefits Trust.
$47.3 billion
— Total of the January capital commitment plan.
Raising the minimum wage for public and contracted social service workers to $15 per hour would impose significant costs on taxpayers, potentially exceeding half a billion dollars annually. Without corresponding improvements in productivity or service delivery, these wage increases represent a substantial expansion of public expenditures.
Recommendations related to City Expenditure Growth
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.
Policymakers should consider the impact on employees who make $16 or $18 per hour to determine if their wages will rise or if they will experience wage compression relative to those they supervise.
Key Data
$20.3 million
— Annual cost to provide a $15 minimum wage to approximately 10,000 state workers.
$142 billion
— Total New York state budget context for the $20.3 million cost.
$19 million
— Annual cost to the city to institute a $15 wage standard for municipal workers.
$25 billion
— Total city payroll context for the $19 million cost.
30,000
— Number of social service workers potentially affected by the $15 wage standard.
$300 million
— Approximate annual cost for wages and fringe benefits for affected social service workers.
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.
Proposed legislation regarding disability benefits for uniformed employees would significantly increase city expenditures, with some bills adding nearly $40 million to the fiscal year 2015 budget and hundreds of millions in long-term actuarial costs. These legislative proposals aim to modify benefit calculations and restore presumptions for police, fire, sanitation, and correction personnel, creating substantial financial obligations for the city.
Key Data
$39.1 Million
— FY2015 budget increase associated with bill S5656, which includes improved disability benefit provisions for sanitation and correction uniformed employees.
$889.3 Million
— Actuarial present value of NYC contributions through FY2019 for bill S5656.
$37.8 Million
— FY2015 budget increase associated with bill A6046/S4269, which grants disability benefits to Tier 3/6 police and fire uniformed employees.
$850.2 Million
— Actuarial present value of NYC contributions through FY2019 for bill A6046/S4269.
$35.7 Million
— FY2015 budget increase associated with bill A5295, which modifies disability benefit calculations for Tier 3/6 police uniformed employees.
$622.9 Million
— Actuarial present value of NYC contributions through FY2019 for bill A5295.
The New York City Health and Hospitals Corporation faces a growing financial imbalance, with expenditures projected to rise to $9.8 billion by fiscal year 2018 while cash reserves are expected to be exhausted by 2017. To address these fiscal challenges, the corporation must implement aggressive cost controls, improve the financial performance of its MetroPlus insurance plan, and establish a more stable, rational funding relationship with the City.
Recommendations related to City Expenditure Growth
HHC must implement cost controls and the associated restructuring critical to its financial plan.
HHC needs to manage MetroPlus to grow enrollment and maximize returns.
HHC must address the financial burden of caring for a large population of uninsured residents in the face of declining supplemental federal Medicaid funds.
HHC should develop a rational financial relationship with New York City to incentivize greater efficiencies and help fulfill its mission and mandates.
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
$9.8 billion
— Projected HHC expenditures in fiscal year 2018, an increase from $8.2 billion in fiscal year 2014.
$3.2 billion
— Projected accumulated cash shortfall for HHC by fiscal year 2018.
$4.8 billion
— Projected accumulated GAAP deficit for HHC by fiscal year 2018.
2,203
— Number of staff positions reduced by HHC between fiscal year 2010 and fiscal year 2014.
5.2 percent
— MetroPlus profit margin in fiscal year 2013, up from 3.8 percent in fiscal year 2010.
Proposed legislation to provide grants for higher wages and benefits to school transportation employees would require reducing funding for other municipal services, as the savings from current contracts have already been allocated. This measure would undermine the integrity of the city's competitive bidding process and set a negative precedent for future vendor contracts.
Recommendations related to City Expenditure Growth
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.
The City should avoid supplementary payments to City contractors over and above the terms of legally binding, competitively bid contracts, as this undermines the integrity of the bidding process.
The City should protect existing municipal services funding by not diverting savings already incorporated into the financial plan to pay for new, unnecessary payments to bus companies.
New York City's settlements and judgments represent a significant budgetary expense, with costs varying drastically between agencies based on whether they are financially responsible for their own legal liabilities. Implementing policies that hold individual agencies accountable for these costs, similar to the Health and Hospitals Corporation's successful risk management model, could effectively reduce overall city expenditures.
Recommendations related to City Expenditure Growth
The City should include the cost of settlements and judgments in agency budgets so these expenses become an explicit part of each City Commissioner’s responsibility.
The NYPD should increase accountability at the precinct level to better manage and 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 identified through ClaimStat analyses to reduce costs.
The City should apply the strategy taken with respect to the Health and Hospitals Corporation—making agencies responsible for their own malpractice costs—to other city agencies.
Key Data
$674 million
— The total cost of settlements and claims in the fiscal year 2015 budget.
54 percent
— The share of total settlements and judgments in fiscal year 2013 for which the Health and Hospitals Corporation and the NYPD were responsible.
$130.6 million
— The amount of settlements and judgments against the Health and Hospitals Corporation in fiscal year 2013.
$137.2 million
— The amount of settlements and judgments against the NYPD in fiscal year 2013.
33 percent
— The reduction in settlements and judgments against the Health and Hospitals Corporation between fiscal year 2003 and fiscal year 2013.
60 percent
— The increase in settlements and judgments against the NYPD between fiscal years 2003 and 2013.
NY1 According to a survey by the Citizens Budget Commission, the city is at the top of the heap in collection costs—coming in at $251 a ton. When you factor in disposal, that number shoots up to $431. The watchdog group says that's more than double what it costs private…
This discussion took place as part of the CBC's Conference, The Most Important Economic and Fiscal Decisions Facing the Next Mayor, held on December 6, 2013 in New York City. Presenter: Charles Brecher Moderator: Edward Skyler Panelists: Robert Hennelly, Stanley Litow, Nancy Winkler, and David Zurndorfer
New York City's economic development spending has grown significantly, with tax expenditures doubling to nearly $1.6 billion and capital spending nearly tripling to $751 million annually by 2012. These programs often lack rigorous cost-benefit analysis and transparency, necessitating reforms to ensure that public funds are effectively used to drive job growth rather than just subsidizing private interests.
Recommendations related to City Expenditure Growth
Use capital investments to enhance infrastructure in neighborhoods with job growth potential.
Encourage growth in the cultural, medical and educational sectors by enhancing access to capital through conduit financing.
Continue reform of as-of-right tax expenditure programs to make them more cost-effective.
Establish clearer standards for awarding discretionary tax expenditure benefits.
Continue rezoning and expand special mixed use districts to facilitate diversified job growth in areas currently limited to industrial use.
Better manage EDC by focusing on job creation and enhancing transparency.
Key Data
$1.6 billion
— Annual tax expenditures by 2012.
$751 million
— Annual capital spending by 2012.
$9.7 billion
— Total conduit debt outstanding.
$368 million
— Relevant operating expenditures in 2012.
$682 million
— Annual value of ICIP exemptions in 2012.
$238 million
— Annual cost of discretionary benefits.
Binding arbitration for uniformed personnel frequently results in wage awards that exceed inflation and create significant fiscal pressure for local governments, particularly when the ability to pay is not adequately considered. Legislative reforms are necessary to redefine the ability to pay, ensuring that contract costs are met through recurring resources rather than tax increases or service cuts.
Recommendations related to City Expenditure Growth
State leaders should amend the statute to address its key weakness: inadequate consideration of the fiscal condition of State and local governments.
The statute should be amended to place greater emphasis on the ability of governments to pay the award.
The statute should be revised to define “ability to pay” as the capacity to pay all costs—including related fringe benefits— of the imposed contract from recurring resources without increasing taxes, making service cuts or employing fiscal gimmicks.
Guidance and training should be provided to arbitrators so they understand how to judge “ability to pay” based on this more specific definition.
Key Data
10
— Suffolk County has settled 10 contracts with uniformed personnel through arbitration since 2000.
one-third
— Police officers comprise one-third of the full-time county workforce in Suffolk County.
Legacy costs, including pension contributions, retiree health benefits, and debt service, are consuming an increasing share of the New York City budget, rising from $8.5 billion in 2005 to $17.8 billion by 2015. This rapid growth in fixed commitments limits the resources available for other municipal priorities and services.
Key Data
$17.8 billon
— Total legacy costs in fiscal year 2015.
$8.5 billion
— Total legacy costs in fiscal year 2005.
$8.2 billion
— Annual pension contributions in fiscal year 2015.
$7.2 billion
— Debt service payments in fiscal year 2015.
$4.2 billion
— Debt service payments in fiscal year 2005.
$3.2 billion
— Annual pension contributions in fiscal year 2005.
New York City spends over $2 billion annually on waste management, with costs for exporting garbage to distant landfills rising significantly over the last two decades. Shifting to local waste-to-energy facilities could save taxpayers $119 million annually and reduce greenhouse gas emissions by 35 percent.
Recommendations related to City Expenditure Growth
The City should foster the construction of waste-to-energy plants sited and designed for city needs and should partner with owners of existing facilities within the region to expand their capacity and willingness to process New York City’s waste.
The City should implement a trial pay-as-you-throw system in the short-term, taking lessons learned to a citywide program in the long-term.
The City should stick to its plan and reinvigorate the recycling program by touting the expansion and the simplification of recycling rules.
Municipal leaders should give high priority to managing solid waste in a way that is fiscally and environmentally sound.
The City should require prospective companies to demonstrate a record of meeting fiscal and environmental benchmarks.
Key Data
$2 billion
— Annual tax dollars spent by New York City to throw out its garbage.
$95 per ton
— Cost for the three million tons of garbage the City exports to landfills.
$119 million
— Annual savings for the City if new and expanded waste-to-energy facilities accommodate two million tons of waste.
$2 billion
— Present value savings over 30 years if the City expands waste-to-energy capacity by two million tons.
35 percent
— Reduction in annual greenhouse gas emissions if two million tons of waste are diverted from distant landfills.
$300 million
— Amount spent on waste export in fiscal year 2011, including transport and disposal at distant landfills and processing at nearby waste-to-energy facilities.
New York City faces a $4.7 billion budget gap for fiscal year 2013, leading to proposals to divert funds from the Health Insurance Premium Stabilization Fund, which has accumulated over $500 million. Instead of using this one-shot revenue, the City should implement health insurance premium cost sharing, similar to State employees, to achieve $625 million in annual savings and address the structural budget imbalance.
Recommendations related to City Expenditure Growth
City and labor leaders should focus their cooperative efforts on meaningful reforms of health insurance instead of relying on one-shot revenue sources.
City’s elected and union leaders should seek large-scale savings that reduce the need for tough budget choices in the future.
The City should implement cost sharing for health insurance premiums, following the example of State employees, to provide annual savings of $625 million.
Key Data
$4.7 billion
— Projected budget gap for fiscal year 2013.
$625 million
— Potential annual savings from implementing health insurance premium cost sharing.
$500 million
— Accumulated funds in the Health Insurance Premium Stabilization Fund.
$1 billion
— Annual taxpayer contributions to union welfare funds.
$150 million
— Savings achieved through increased deductibles for hospital and medical services.
$117 million
— Amount transferred from the Health Insurance Premium Stabilization Fund to union welfare funds in 2009.
The Metropolitan Transportation Authority faces significant fiscal challenges, with projected budget gaps reaching nearly $1.2 billion by 2013, necessitating a focus on efficiency and cost control. By benchmarking unit costs and labor productivity against other large transit systems, the agency can identify specific areas for improvement, particularly within its relatively inefficient bus and commuter rail operations.
Recommendations related to City Expenditure Growth
The MTA should increase its reliance on identifying unit cost measures and developing comparative measures to guide efficiency initiatives.
Analysts recommend measuring efficiency with labor productivity measures based on hours of work to account for regional wage differences.
The MTA should prioritize efficiency improvements in its bus systems, as they are inefficient compared to other large U.S. systems and represent a major portion of operating expenses.
The MTA should target vehicle maintenance and non-vehicle operations for efficiency improvements within its commuter rail systems.
The MTA should address non-vehicle operations within its subway system, as this remains a substantial function with notable room for improvement.
Key Data
$1.2 Billion
— Projected budget gap for the MTA in 2013.
$935 Million
— Total recurring savings identified for 2014 from all efficiency initiatives.
$8 Billion
— Total operating expenses for the five largest MTA passenger transport divisions in 2009.
$525 Million
— Recurring savings expected from efficiency measures and service cuts.
$400 Million
— Projected budget gap for the MTA at the beginning of 2010.
$300 Million
— Operating budget deficit for the MTA in 2009.
The proposed legislation mandating 80 additional hours of training for New York City firefighters would impose an unnecessary $29.5 million financial burden on the city. This mandate would exacerbate existing budget pressures by increasing overtime costs and future pension obligations in a department where spending already exceeds allocations.
Recommendations related to City Expenditure Growth
The Governor should veto A9885/S6784 because the bill arbitrarily creates overtime in a department where overtime already regularly exceeds budget allocations.
The City should not be mandated to create further increases in expenditures due to non-essential training.
Key Data
$29.5 million
— The estimated cost of the legislation to the City.
222,114
— Total inspections conducted by the FDNY in fiscal year 2010.
80
— Hours of additional training mandated by the bill for firefighters.
180
— Hours of specialized training already received by civilian inspectors.
16
— Hours of training on new codes already received by fire officers.
$19 million
— Added current year wages and fringe benefits resulting from the training mandate.
New York City and State retirement benefits have become a significant and rapidly growing fiscal burden, with costs for pension contributions and retiree health insurance rising sharply. To address this, the report advocates for shifting new employees to defined contribution plans and reforming existing benefits to align more closely with private sector standards.
Recommendations related to City Expenditure Growth
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 to align with practices of other large employers.
The City and State should seek to place all new workers in defined contribution plans.
Increase required employee contributions to pension plans and discontinue the ITHP program.
Raise the minimum age requirement for retirement to adopt age thresholds similar to the federal Social Security system.
Base pension benefits on a five-year final average salary that excludes overtime and other supplements subject to manipulation.
Define work-related disabilities more rigorously to set more stringent standards for uniformed workers.
Eliminate the variable supplements available to some retired New York City uniformed workers.
Key Data
$4.7 billion
— Projected required pension fund contributions for the City in fiscal year 2008.
$6.3 billion
— Combined cost of health insurance for City and State workers and retirees in 2008.
$1.5 billion
— Combined cost to the City and State of health insurance for retirees in 2004.
$12,000
— The amount of the variable supplement or 'Christmas bonus' for certain uniformed workers in 2007.
$131 million
— Cost to the City in 2004 for reimbursing retirees for Medicare Part B premiums.
$88 million
— Cost to the State in 2004 for reimbursing retirees for Medicare Part B premiums.
New York City's pension costs have experienced significant growth, creating long-term fiscal challenges for the municipal budget. Addressing these rising retirement benefit obligations is essential for maintaining the city's overall financial stability.
New York City's average employee compensation costs grew by nearly two-thirds over eight years, driven largely by generous union contracts, health benefits, and pension plans that outpaced private sector and national growth. To address this, the city must pursue productivity-based negotiations, implement health-insurance reforms, and establish a new pension tier for future employees.
Recommendations related to City Expenditure Growth
Mayor Bloomberg and the city's unions must partner to identify concessions and workplace reforms that would provide immediate and recurring savings, and the city should return to productivity-based negotiations in future contract talks.
The mayor should aggressively pursue health-insurance reforms to identify and implement savings.
The Legislature should approve a new pension tier for new employees to limit the growth of future liability.
Key Data
$106,743
— Average compensation cost of a full-time city employee in the last fiscal year.
704%
— Growth in the city's average contribution for pension benefits over eight years.
63%
— Growth in total compensation costs for New York City employees over the last eight years.
$200 million
— Projected savings from health-insurance restructuring in the mayor's plan for the next fiscal year.
$69,100
— Average pay per employee, including salary, overtime, and other pay differentials.
$37,600
— Average fringe-benefit costs per employee.
Between fiscal years 2000 and 2008, the average compensation cost for a full-time New York City employee grew by 63 percent, reaching $106,743. This rapid increase, which significantly outpaced inflation and compensation growth for other employers, was primarily driven by a 700 percent surge in pension contributions.
Key Data
$106,743
— The average compensation cost per full-time employee in fiscal year 2008.
63%
— The growth in the City's average employee compensation cost since fiscal year 2000.
700%
— The growth in the City's average contribution for pension benefits between fiscal years 2000 and 2008.
$37,619
— The average fringe benefit costs per full-time employee in fiscal year 2008.
$20,333
— The average contribution for pension benefits per full-time employee in fiscal year 2008.
35%
— The portion of total compensation represented by fringe benefits in fiscal year 2008.
New York City's pension and retiree health insurance costs are spiraling, with taxpayer contributions projected to exceed $5.7 billion by 2010. To address this fiscal burden, the city should implement reforms such as trimming benefits for newly hired employees and excluding overtime earnings from pension calculations.
Recommendations related to City Expenditure Growth
New York should trim the pensions of newly hired city workers to address the spiraling cost to taxpayers.
The city should eliminate the practice of including overtime earnings in the pension benefit formula.
Key Data
$4 billion
— Taxpayer contribution to municipal worker pension funds in the current fiscal year.
$900 million
— Taxpayer contribution for retiree health insurance.
$5.7 billion
— Projected pension contributions in 2010.
15%
— Amount by which average hourly wages for public employees exceeded those of private firms in a 2004 survey.
30%
— Wage advantage for public sector blue collar workers compared to private firms in a 2004 survey.
New York City's "non-discretionary" spending, which includes pensions, health insurance, Medicaid, and debt service, is projected to grow to $25 billion by fiscal year 2009, consuming a large portion of locally-raised revenues. By implementing reforms in these four areas, the City could save nearly $2.5 billion annually, helping to close budget gaps and avoid service reductions.
Recommendations related to City Expenditure Growth
Establish a new and more affordable pension plan for new workers through State legislation.
Align health insurance practices with those of other employers by requiring employee contributions for premiums and ending the Medicare subsidy.
Implement Medicaid cost containment measures, such as limiting eligibility loopholes, paying competitive rates to providers, and increasing managed care participation.
Reduce debt service by refinancing high-interest debt, reducing capital spending, and paying off existing debt with operating surpluses.
Advocate for the repeal of, or exemption of more projects from, the State's Wicks Law to reduce construction costs.
Key Data
$2.5 billion
— Annual savings achievable by implementing the four proposed reforms.
$19 billion
— Amount of "non-discretionary" spending in fiscal year 2005.
$25 billion
— Projected "non-discretionary" spending by fiscal year 2009.
$549 million
— Savings from pension reform by fiscal year 2009.
$1,197 million
— Savings from health insurance reforms in fiscal year 2009.
$454 million
— Savings from Medicaid cost containment in fiscal year 2009.
New York City and State retirement benefits have become a significant fiscal burden, with required pension contributions for the City alone projected to reach $4.7 billion by 2008. To address this, the report recommends shifting to defined contribution plans for new hires and increasing retiree contributions to health insurance premiums.
Recommendations related to City Expenditure Growth
Convert from defined benefit to defined contribution plans for all new City and State workers.
Require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
Base pension benefits on a more standard definition of final average salary that excludes overtime and other supplements.
Stop reimbursing retirees for Medicare Part B premiums.
Increase required employee contributions to pension plans, and do not limit them to ten years.
Raise the minimum age requirement for retirement to align with federal Social Security thresholds.
Define work-related disabilities more rigorously to ensure clear evidence of a work-related cause.
Eliminate the variable supplements available to some retired New York City uniformed workers.
Key Data
$615 million
— Required contributions to New York City pension funds in fiscal year 2000.
$2.3 billion
— Required contributions to New York City pension funds in fiscal year 2004.
$4.7 billion
— Projected required contributions to New York City pension funds by fiscal year 2008.
$4.2 billion
— Combined cost of health insurance for New York City and State workers and retirees in 2004.
$6.3 billion
— Projected combined cost of health insurance for New York City and State workers and retirees in 2008.
$12,000
— Annual variable supplement payment for certain retired New York City uniformed workers by 2007.
New York City's fiscal year 2004 budget gap grew by $6.2 billion due to a combination of declining revenues and rising expenditures, with the latter increasing by $3.1 billion. To address this, the city relied heavily on tax increases and one-time revenue sources rather than significant service cuts, as actual service reductions accounted for only about $600 million of the gap-closing plan.
Key Data
$3.1 billion
— The amount by which City-funded expenses have risen since June 2001, contributing to the fiscal year 2004 budget gap.
$2.4 billion
— The projected shortfall in tax revenues for fiscal year 2004 compared to previous projections.
$8.8 billion
— The total projected fiscal year 2004 budget gap without offsetting actions.
$600 million
— The total value of actual cuts in services identified to close the budget gap.
$6,954
— The increase in compensation per employee in fiscal year 2004 compared to what was planned in June 2001.
$729 million
— The amount by which pension costs have exceeded expectations.
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