New York City’s budget reflects the annual financial plan for municipal operations, including the allocation of tax revenues and federal aid to support city services and capital projects. This page covers CBC’s work on budget gaps, spending growth, savings programs, fiscal reserves, and the cost-effectiveness of specific programs like CityFHEPS and Fair Fares NYC.
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..
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, as the projected 15 percent annual growth in CityFHEPS may be underestimated and is still unsustainable.
Fund additional new spending and City Council initiatives with recurring savings.
Increase the fiscal year 2027 General Reserve to $500 million to protect against economic volatility and unexpected spending shocks.
The City should undertake 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 operations to achieve excellence, rather than relying on past maneuvers.
Key Data
In June 2026, the CBC reported that City employee and retiree health care costs are projected to reach $11 billion in fiscal year 2027, which would consume 8.8% of the total budget.
In June 2026, the CBC analyzed that the executive budget increased headcount by 869 full-time positions, offsetting the elimination of 2,268 vacancies with 3,137 new positions.
In May 2026, the CBC reported that City-funded spending continues to grow rapidly, projected to increase by 28% or $24.4 billion between fiscal years 2025 and 2030.
In March 2026, the CBC testified that the CityFHEPS rental voucher program is on an unsustainable trajectory, with its cost tripling in three years from $499 million in fiscal year 2023 to a projected $1.7 billion in fiscal year 2026.
In March 2026, the CBC highlighted that City spending has grown far faster than inflation, with fiscal year 2026 spending being $16 billion higher than if it had grown at the rate of inflation since fiscal year 2017.
New York City's Fiscal Year 2027 Executive Budget balances the budget through one-time resources and short-term savings, but fails to address long-term fiscal challenges where projected gaps grow to $9.8 billion by 2030. To achieve sustainability, the City must prioritize recurring savings and increase reserves rather than relying on gimmicks and temporary fixes.
Recommendations related to City Spending Trends
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, as the projected 15 percent annual growth in CityFHEPS may be underestimated and is still unsustainable.
Fund additional new spending and City Council initiatives with recurring savings.
Increase the fiscal year 2027 General Reserve to $500 million to protect against economic volatility and unexpected spending shocks.
Key Data
$9.8 billion
— Projected budget gap in fiscal year 2030.
$12.7 billion
— Total gap-closing actions proposed to balance the budget.
$5.0 billion
— Amount of one-shot actions used to patch budget holes.
$3.0 billion
— Total amount of the savings program.
$1.4 billion
— Amount of recurring State aid.
$568 million
— Amount generated from tax increases.
New York City's fiscal plan relies heavily on short-term strategies and pension maneuvers to close budget gaps, while City-funded spending is projected to grow by $24.4 billion, or 28 percent, between fiscal years 2025 and 2030. These temporary fixes leave significant long-term challenges, with outyear budget gaps expected to swell to nearly $10 billion by fiscal year 2030.
Recommendations related to City Spending Trends
The City should undertake 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 operations to achieve excellence, rather than relying on past maneuvers.
Key Data
28 percent
— The projected growth in 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.
nearly $10 billion
— The projected outyear budget gap by fiscal year 2030.
$1.2 billion
— The amount of the accrual sweep used to balance the fiscal year 2027 budget.
New York's fiscal plan for fiscal year 2027 adds $5 billion above the executive proposal, increasing future budget gaps and the risk of a fiscal wall. To stabilize the budget, the state should prioritize recessionary reserves and reduce inefficient spending rather than raising taxes or enacting new levies.
Recommendations related to City Spending Trends
The State should relieve the City from the Class-Size Reduction Mandate to help stabilize the budget.
The City should be much more ambitious in its effort to reduce inefficient spending.
The State should add energy rebate funds to recessionary reserves rather than spreading them thinly.
The State should stop increasing school aid to shrinking districts as it is unwise and unfair.
The State should commit to a well-designed cap-and-invest program to balance emissions goals with affordability.
Key Data
$5 billion
— Amount added above the Executive proposal for fiscal year 2027, which likely grows future budget gaps.
$1 billion
— Total amount allocated for energy rebate checks that would be better used for recessionary reserves.
$268 billion
— Total amount the State plans to spend in the upcoming budget.
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 alternative to fare-free bus proposals that would exceed $900 million in the first year. This expansion would reach 722,000 additional New Yorkers while preserving city fiscal resources and allowing for more efficient transit operations.
Recommendations related to City Spending Trends
The City should increase eligibility for Fair Fares NYC to individuals making up to 250 percent of the FPL, adding 722,000 New Yorkers at a projected cost of $146 million per year.
The City should increase utilization of Fair Fares NYC by improving education, outreach, and simplifying enrollment processes.
The City should collaborate with the Metropolitan Transportation Authority (MTA) to implement infrastructure improvements and operational changes to cost-effectively improve bus speeds.
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.
Key Data
$900 million
— Estimated cost to eliminate bus fares in the first year.
$86 million
— Cost of the Fair Fares NYC program in fiscal year 2025.
$146 million
— Projected annual cost to expand Fair Fares NYC eligibility to 250 percent of the federal poverty level.
722,000
— Number of additional New Yorkers who would become eligible for Fair Fares NYC under the proposed expansion.
31 percent
— Current enrollment rate of the 1.23 million New Yorkers eligible for Fair Fares NYC.
7.0 miles per hour
— Average speed of New York City buses, which is 29.3 percent slower than the national average.
New York City faces significant economic challenges, including a projected $3.5 billion budget gap and declining population, while spending $42,000 per student on public education. To address these issues, the city must implement fiscal reforms such as aligning school budgets with enrollment and fixing procurement processes to improve efficiency and affordability.
Recommendations related to City Spending Trends
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.
The city should seek relief from Albany’s class size mandate, which could unlock $1.2 billion while preserving smaller classes where they matter most.
The city should align school budgets with declining enrollment, which could save $400 million.
The city should fix procurement, which could yield $700 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 receives this year.
$1.2 billion
— Potential savings from obtaining relief from Albany’s class size mandate.
$42,000
— Amount the city Department of Education spends per student, which is twice the national average.
$400 million
— Potential savings from aligning school budgets with declining enrollment.
$700 million
— Potential savings from fixing procurement processes.
$330 million
— Potential savings from maintaining current city-funded housing vouchers.
Mayor Mamdani's recent savings plan is a positive initial step, but the administration must pursue more aggressive measures beyond the current $1.7 billion target to ensure long-term affordability. Achieving this requires a fundamental transformation in government operations to eliminate spending that does not directly benefit New Yorkers.
Recommendations related to City Spending Trends
The administration must go much further than the $1.7 billion savings target to address city spending.
The administration must be as ambitious about government efficiency as it is about affordability.
The city must pursue a real transformation on how it runs government to avoid spending money that does not help New Yorkers.
Key Data
$1.7 billion
— The current savings target set by the administration for its budget plan.
The CityFHEPS rental voucher program has seen its costs triple in three years, reaching a projected $1.7 billion in the current fiscal year, with further increases expected. To ensure fiscal sustainability, the program should be capped at its current number of vouchers, which would save $330 million in the fiscal year 2027 budget and $3.0 billion over the five-year financial plan.
Recommendations related to City Spending Trends
Capping the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) program at the current number of vouchers would save $330 million in fiscal year 2027 budget and $3.0 billion over the five-year financial plan, without taking away vouchers from current recipients.
The City should certainly not pursue an unaffordable expansion that would explode costs even higher.
Turnover among current beneficiaries would allow the City to issue vouchers to some new households each year; priority should be given to those with the greatest need.
The City should leverage State and federal housing subsidy programs and partner with the private sector to increase housing production to solve the housing crisis.
The City should offset CityFHEPS funding by restraining other low impact spending.
Key Data
$330 million
— Savings in the fiscal year 2027 budget from capping the number of CityFHEPS vouchers.
$3.0 billion
— Savings over the five-year financial plan from capping the number of CityFHEPS vouchers.
$1.7 billion
— Projected cost of the CityFHEPS program in the current fiscal year.
$2.2 billion
— Projected cost of the CityFHEPS program in the next fiscal year.
$12.6 billion
— Total projected spending on CityFHEPS housing vouchers between fiscal years 2026 and 2030.
64,439
— Number of households served by CityFHEPS as of October 2025.
New York City's fiscal year 2027 preliminary budget faces a $9.4 billion gap, driven by spending that has significantly outpaced inflation and revenue growth over the last several years. To achieve long-term sustainability, the city should prioritize operational efficiency and spending restraint rather than relying on tax increases and the depletion of financial reserves.
Recommendations related to City Spending Trends
The City should reject tax increases that would harm the City’s economic competitiveness and place additional burdens on residents and businesses.
The City should reduce ineffective spending and improve operational efficiency, including spending on education, procurement, and administrative operations.
The City should 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.
The City should build and maintain adequate reserves by not drawing down the rainy day fund or RHBT and including $1 billion of in-year reserves to protect against economic downturns.
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.
6.8 percent
— The annual growth rate of City-funded spending between fiscal years 2021 and 2025, which outpaced the 5.2 percent annual growth in tax revenues.
$2.6 billion
— The amount of recurring savings identified that could be achieved before drilling down into specific agency operations.
$100 million
— The amount of in-year reserves included in the fiscal year 2027 budget, representing just 0.1 percent of the total budget.
$15 billion
— The estimated funding required over two years to mitigate the effects of a significant economic downturn.
New York City's fiscal challenges stem from excessive spending growth that has consistently outpaced inflation over the last decade, resulting in $2.3 billion in overspending over the past three years. To address these gaps, the City should implement a multi-year improvement plan focused on productivity, service redesign, and operational efficiencies rather than tax increases.
Recommendations related to City Spending Trends
The City should ensure this supports a multi-year improvement plan that emphasizes recurring savings driven by productivity, service redesign, and evidence-based impact.
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 augment current efforts with a citywide, data-driven management framework that supports continuous improvement.
The City should expand operational flexibility, modernize job titles, spur employee input into quality and process improvement, and pursue gainsharing arrangements that allow employees and residents alike to benefit from greater productivity.
The City should prioritize careful capital planning and project delivery reform to control capital costs and moderate debt service.
Key Data
$2.3 billion
— The amount the City spent more than it received over the past three years.
$15 billion
— The amount the City would be spending today if spending growth had merely kept pace with inflation over the last decade.
New York City faces a significant budget shortfall driven by years of unchecked spending growth that has outpaced inflation and left the city with a $2.3 billion deficit over the last three years. To address this, the city must prioritize fiscal discipline by streamlining operations, implementing performance management systems, and modernizing labor relations rather than relying on tax increases.
Recommendations related to City Spending Trends
The best fiscal rescue plan starts by diving into every agency, cutting unproductive spending, and streamlining operations using technology and eliminating wasteful bureaucratic processes.
The Administration should implement a citywide performance management system to improve services and guide smarter budget decisions.
To meet 21st Century needs, the City must also update 20th Century labor relations, technology, and bureaucratic processes.
The Mayor should request relief from Albany’s class size mandate that costs the City $1 billion, to reduce unnecessary fiscal burdens.
The Mayor should set ambitious minimum savings targets—not for blunt across-the-board cuts, but to generate options so he can make strategic choices that focus programs without harming New Yorkers.
Key Data
$2.3 billion
— Amount the City spent more than it received over the past three years.
$8 billion
— Estimated budget gap facing New York City.
$15 billion
— Amount lower City spending would be today had it kept pace with inflation since 2017.
17.44%
— Combined corporate tax rate in New York City.
11.5%
— Combined corporate tax rate in New Jersey.
$1 billion
— Cost to the City of Albany’s class size mandate.
New York State and its localities lead the nation in tax collections and rank third in spending, with per-capita expenditures 40% higher than the national average. Residents and businesses face the highest tax burden in the country, including the highest corporate income tax collections per $1,000 of state GDP and property tax collections that are 71% above the national average.
Key Data
$15,894
— Total state and local expenditures per capita in New York in 2023.
40%
— Amount by which New York State and its localities' per-capita spending exceeded the national average in 2023.
$12,495
— Total state and local taxes collected per capita in New York in 2023, the highest of all states.
$153
— Total state and local taxes collected per $1,000 of personal income in New York in 2023.
$18.4
— Corporate income tax revenue per $1,000 of state GDP in New York in 2023.
$3,454
— Property tax revenue per capita in New York in 2023.
The incoming administration faces a significant budget gap and must implement fiscal discipline to ensure long-term stability and service quality. By accurately estimating expenditures, prioritizing high-impact services, and strengthening the rainy day fund, the city can better prepare for economic downturns and federal funding cuts.
Recommendations related to City Spending Trends
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 to reduce spending growth the right way.
The administration should shift vacant positions across agencies and units based on needs and eliminate excess vacancies rather than managing them within siloed agencies.
The administration should increase the general reserve by $1 billion per year to strengthen the City’s ability to absorb the initial impact of unexpected cuts or delays in federal aid.
The administration should work with the City Council to 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.
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.
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 centrally budgeted costs like debt service and benefits. While spending on daily park operations has increased three-fold since 2004, the share of total parks funding dedicated to these operations has declined as debt service costs have grown 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.
New York City faces a precarious budget situation where current revenues are insufficient to sustain spending, necessitating a return to fiscal discipline similar to the lessons learned from the 1975 fiscal crisis. With annual expenditures reaching $120 billion, the city must prioritize efficient, evidence-based services and modernize government operations to ensure long-term stability and quality of life.
Recommendations related to City Spending Trends
The City must keep its fiscal house in order by ensuring government does not try to do it all and living within its means.
The City must focus on what works most and trim what doesn’t, even if it’s popular, to avoid hurting those it should help.
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 stay.
The City and municipal unions should work together to modernize government to share the financial benefits of more efficient services.
The City should collaborate with nonprofit providers to focus resources on the most effective evidence-based services, scaling those that improve lives while shrinking those that do not.
Key Data
$453 million
— Total debt New York City had to repay 50 years ago, which it could not afford.
$120 billion
— Annual amount New York City currently spends.
Extending the authorization of joint bidding for public works contracts allows the city to bundle capital projects with utility relocation, reducing construction delays and overall costs. This legislative action prevents the use of more expensive procurement processes that inflate capital expenses and ultimately increase utility bills for ratepayers.
Recommendations related to City Spending Trends
The Governor should sign S8404/A8679 and S8405/A8678 to extend authorization of joint bidding on public works contracts in lower Manhattan and the rest of the city.
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 adopted fiscal year 2026 budget reflects a 7.6 percent increase in city-funded spending, totaling $122.7 billion once adjusted for underbudgeted expenses. This spending trajectory, combined with a $610 million revenue shortfall in the previous year and future budget gaps estimated between $8 billion and $10 billion, highlights significant fiscal instability.
Recommendations related to City Spending Trends
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 prepayments and underbudgeted programs.
7.6 percent
— The City-funded spending increase from fiscal year 2025 to fiscal year 2026, 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.
New York City faces significant fiscal challenges as spending outpaces revenue, necessitating a shift toward sustainable budgeting and improved service delivery. To maintain competitiveness, the city must prioritize evidence-based programs, streamline capital spending, and reform tax policies to ensure long-term affordability and infrastructure resilience.
Recommendations related to City Spending Trends
The next mayor should cut spending to sustainable levels and stop low-balling budget estimates.
The city should run regular Programs to Eliminate the Gap (PEGs) smartly to save money.
The administration must cap debt service and redefine the City’s debt limit to reflect all obligations and resources.
The city needs to overhaul capital spending by better managing assets and projects, fixing procurement, and controlling costs.
The next mayor should negotiate thoughtful labor deals that balance fair compensation and fiscal reality.
Key Data
$115 billion
— The amount the City spends annually.
New York City should establish a local law mandating specific deposit, withdrawal, and target size rules for its Revenue Stabilization Fund to ensure long-term fiscal stability. Additionally, the City should implement stricter transparency requirements for financial plan estimates and prioritize citywide needs in land use decisions to address housing production challenges.
Recommendations related to City Spending Trends
The City should require the Mayor and City Council to enact a local law that details the City’s Revenue Stabilization Fund deposit, withdrawal, and target size policy.
The City should identify the minimum target size for the Rainy Day Fund that is 16 percent or more of tax revenue.
The City should require deposits when tax revenue growth is at least 3 percent, year-over-year, on a common rate and base.
The City should limit the first withdrawal following the occurrence of a recession or severe emergency to two-thirds of the balance of the fund.
The Charter should be revised to require new transparency requirements when revenues or expenditures vary significantly year-over-year or differ substantially from estimates made by the City and State Comptrollers.
The Charter should be revised to require an explanation of any tax revenue change greater than 10 percent from the prior fiscal year.
The Charter should be revised to require an explanation of any expenditure change in any major program or unit or appropriation greater than 10 percent and at least $10 million from the prior fiscal year.
The Executive Budget Message should include an explanation of any major program or unit of appropriation expenditure where the estimate by the Office of the City Comptroller or the Office of the New York State Comptroller varies 20 percent or more.
The City should maintain the current process for setting Units of Appropriation to ensure they are neither too broad nor too narrow.
The City should ensure that citywide needs play a substantial role in zone and land use decision making to foster housing production.
Key Data
16 percent
— Minimum target size for the Revenue Stabilization Fund as a percentage of tax revenue.
3 percent
— Threshold for year-over-year tax revenue growth that triggers mandatory deposits into the Revenue Stabilization Fund.
2 percent
— Threshold for revenue loss or expenditure increase that defines a severe emergency for the Revenue Stabilization Fund.
10 percent
— Threshold for tax revenue change from the prior fiscal year that requires an explanation in the financial plan.
$10 million
— Minimum dollar amount for an expenditure change in a major program or unit of appropriation that requires an explanation.
20 percent
— Threshold for variance between City or State Comptroller estimates and the Executive Budget Message that requires an explanation.
New York City's proposed fiscal year 2026 budget reaches $121 billion, yet it faces future budget gaps ranging from $8 billion to $10 billion and a $3 billion shortfall for existing service levels. To ensure fiscal stability, the city must prioritize high-impact programs, increase efficiency, and set aside reserves to mitigate the risks of potential federal funding cuts and economic recession.
Recommendations related to City Spending Trends
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 focus priorities and set aside money to address the next recession and likely reductions in federal funding.
The City should add $1 billion in next year’s General Reserve to soften the first blows of federal cuts.
The City should add $2 billion to the Rainy Day Fund to prepare for potential economic downturns.
Key Data
$121 billion
— Fiscal year 2026 proposed costs, when adjusted for expenses prepaid in the current year and expected costs not funded.
$8 billion to $10 billion
— Range of future budget gaps once underbudgeted expenses are added.
$3 billion
— Shortfall in the fiscal year 2026 budget to fund existing service levels, such as 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, compounded by recent trends of spending growth outpacing revenue and persistent underbudgeting. To build resilience, the city must implement fiscal discipline, including holding the line on new spending, bolstering reserves, and improving the accuracy of budget estimates.
Recommendations related to City Spending Trends
The city should hold the line on new spending by not adding or expanding programs in the Executive and Adopted Budgets.
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, reserving it for short-term emergencies like a recession.
The city should restrain spending growth by streamlining administrative overhead and increasing efficiency to minimize service disruptions.
The city should end the budget-estimating gimmickry to provide New Yorkers with accurate and reasonable estimates of revenue and expenses.
Key Data
$1.1 billion
— The amount the city spent more on fiscal year 2024 obligations than it took in.
$4 billion
— The amount of annual underbudgeting that has grown, which drastically understates the size of future gaps.
$10 billion
— The potential size of future budget gaps, which may exceed this amount even without federal cuts or a recession.
$7.4 billion
— The amount of federal aid the city receives that supports vital services like child care vouchers, family shelters, and school food programs.
New York City faces significant financial uncertainty as federal aid, which comprises $7.4 billion of the fiscal year 2026 budget, remains at risk due to potential policy changes. To mitigate these risks and address existing fiscal challenges like $4 billion in annual underbudgeting, the City must prioritize spending restraint, bolster reserves, and improve budget accuracy.
Recommendations related to City Spending Trends
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 included in the City’s Fiscal Year 2026 Preliminary Budget.
$4 billion
— Annual amount of underbudgeting that understates future budget gaps.
$1.1 billion
— Amount the City spent more on fiscal year 2024 obligations than it received.
$91 billion
— Amount the State receives from the federal government, primarily for public health insurance and education.
$1.4 billion
— Federal public housing operating subsidies received by NYCHA last year.
$2.7 billion
— Federal funds that supported more than 133,000 housing vouchers across NYCHA and the City.
$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…
The Metropolitan Transportation Authority’s 2025-2029 Capital Plan faces a $33.4 billion funding gap, requiring a balanced approach that includes increased City and State contributions, modest fare and toll adjustments, and operational efficiencies. To ensure fiscal sustainability and accountability, the plan must prioritize essential repairs, reduce expansion costs, and implement measures to improve cost-effective project delivery.
Recommendations related to City Spending Trends
The MTA and the State should focus the Capital Plan exclusively on Rebuild and Improve projects to shrink the funding gap.
The MTA and the State should increase the City and State contribution by $9.0 billion in pay-as-you-go (PAYGO) financing to fund critical investments.
The MTA and the State should modestly increase fares, tolls, and vehicle registration fees to generate revenue to support a $6.8 billion investment.
To ensure accountability, the plan should require the MTA to publish project plans, user-friendly capital project status reports, regular updates on each asset group’s state of repair, and a joint study on comparative capital project costs.
To ensure operating budget stability, the plan should ensure labor provides the flexibility to generate at least $500 million in recurring operating budget savings needed to support $8 billion of the planned operating-budget-backed debt.
The plan should require a study to identify any State or City laws or regulations that increase MTA capital costs.
The plan should include provisions to catalyze action and provide tools to the District Attorneys, police and the MTA to dramatically turn the tide on fare evasion.
Key Data
$68.4 billion
— The size of the proposed 2025-2029 Capital Plan.
$33.4 billion
— The initial funding gap identified in the 2025-2029 Capital Plan.
$35.4 billion
— The increased financing gap following the State Fiscal Year 2026 Executive Budget.
$9.0 billion
— The proposed increase in City and State contributions via pay-as-you-go financing.
$6.8 billion
— The revenue generated by modestly increasing fares, tolls, and vehicle registration fees.
$500 million
— The amount of recurring operating budget savings labor should provide to support debt.
New York City's budget is increasingly precarious as recurring expenses exceed revenues, leading to the rapid depletion of surplus funds and significant outyear budget gaps. To address these fiscal risks, the city must stop underbudgeting current services and implement stricter spending controls to ensure long-term financial stability.
Recommendations related to City Spending Trends
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 provide planned services.
$4.0 billion
— The amount of annual underbudgeting for current services.
$6.1 billion
— The high point of rolled surplus funds reached in fiscal year 2022.
$7.8 billion
— The projected budget gap for fiscal year 2027.
$10.1 billion
— The projected budget gap for fiscal year 2028.
$9.6 billion
— The projected budget gap for fiscal year 2029.
The CityFHEPS rental voucher program has grown to cost over $1.1 billion in fiscal year 2025, more than double its cost in fiscal year 2023, while the fiscal year 2026 budget is set at just $519 million. Because these vouchers cost significantly more than shelter over the long term and have not reduced the shelter population, the city must prioritize sustainable spending and target assistance to those who will benefit most.
Recommendations related to City Spending Trends
The City will need to make decisions about the level of CityFHEPS spending that is appropriate and sustainable as part of a multi-pronged affordable housing strategy.
The City should maximize the impact of CityFHEPS by targeting vouchers to households who will see the most benefits.
Key Data
$1.1 billion
— Cost of serving the 52,000 existing CityFHEPS voucher holders in fiscal year 2025.
$519 million
— The fiscal year 2026 CityFHEPS budget, which is 52 percent less than the current year.
$20,000
— Average cost per household per year for CityFHEPS vouchers.
$1.8 billion
— The amount CityFHEPS will cost more than shelter over five years for the current 52,000 voucher holders.
27 percent
— The amount more CityFHEPS will cost the City compared to shelter for a typical single adult by the end of the fifth year.
64 percent
— The amount more CityFHEPS will cost the City compared to shelter for families by the end of the fifth year.
New York City's fiscal plan for 2026 relies on optimistic revenue estimates and underbudgeting, leaving a nearly $4.0 billion shortfall for existing services. When adjusted for these accounting practices, future budget gaps are significantly higher than reported, ranging from $8.0 billion to $9.0 billion between fiscal years 2027 and 2029.
Recommendations related to City Spending Trends
The Administration should break its severe underbudgeting habit and provide credible spending estimates.
City leaders should prioritize programs that work, shrink those that don’t, and improve the quality and efficiency of the government’s operations.
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
— The amount the fiscal year 2026 spending plan is short to fund existing services.
$4.2 billion to $5.1 billion
— The reported budget gaps for fiscal years 2027 to 2029.
$8.0 billion to $9.0 billion
— The actual budget gaps for fiscal years 2027 to 2029 when underbudgeting is taken into account.
6.7 percent
— The rate at which City-funded spending will grow in fiscal year 2025, adjusted for underbudgeting and pre-payments.
5.0 percent
— The rate at which City-funded spending will grow in fiscal year 2026, adjusted for underbudgeting and pre-payments.
$2.5 billion
— The amount of spending added to fiscal year 2025 in the middle of the year.
New York State and its localities spent $15,368 per capita in 2022, which is 45% higher than the national average and ranks second highest in the nation. Additionally, the state collected $12,751 in taxes per capita, the highest amount of any state in the country.
Key Data
$15,368
— Total state and local expenditures per capita in New York in 2022.
45%
— Amount by which New York State and its localities' per-capita spending exceeded the national average in 2022.
$12,751
— Total state and local taxes collected per capita in New York in 2022, the highest in the nation.
79%
— Amount by which New York's per-capita tax collection exceeded the national average.
$169
— Total state and local taxes collected per $1,000 of personal income in New York in 2022.
$3,319
— Local property tax collections per capita in New York in 2022.
New York City's capital projects, which include a $164.8 billion ten-year strategy, are frequently delayed by outdated procurement rules that increase costs. Implementing permanent joint bidding for utility work on these projects can reduce these delays and generate revenue, as evidenced by a reduction in utility-related delays from 28 months to 7 months.
Recommendations related to City Spending Trends
The state should enact legislation to permanently authorize joint bidding for public works contracts to improve project efficiency.
New York City should continue to utilize joint bidding for capital projects to reduce construction costs and accelerate delivery.
Key Data
$86.7 billion
— Total value of the September Capital Commitment Plan covering fiscal years 2025 to 2028.
$164.8 billion
— Total value of the most recent Ten-Year Capital Strategy covering fiscal years 2024 to 2033.
28 months
— Average delay resulting from utility work for projects using the traditional bidding method.
7 months
— Average delay resulting from utility work for projects using the joint bidding method.
$4.3 million
— Additional cost added to each project due to the 21 months of delay associated with not using joint bidding.
$1.0 million
— City revenue generated per project under joint bidding cost sharing agreements.
New York City's total operating expenditures rose from $95,030 million in fiscal year 2020 to $113,175 million in fiscal year 2024. Over the same five-year period, annual capital expenditures increased from $9,772 million to $14,524 million.
Key Data
$113,175 Million
— Total operating expenditures for the City of New York in fiscal year 2024.
$14,524 Million
— Total capital expenditures for the City of New York in fiscal year 2024.
$30,077 Million
— Total education expenditures for the City of New York in fiscal year 2024.
$10,297 Million
— Total public safety and law enforcement expenditures for the City of New York in fiscal year 2024.
$95,030 Million
— Total operating expenditures for the City of New York in fiscal year 2020.
$9,772 Million
— Total capital expenditures for the City of New York in fiscal year 2020.
New York City's November 2024 financial plan continues to underbudget ongoing programs by more than $3 billion annually, leading to projected future budget gaps exceeding $8 billion. While the City utilized over $1 billion in new resources to cover current shortfalls, it has yet to identify funding for state-mandated class size reductions or future costs related to overtime, housing vouchers, and public assistance.
Recommendations related to City Spending Trends
The Administration should start taking steps now to close next year’s budget gap in the January Preliminary Budget.
The Administration should prioritize critical programs, increase efficiency, and shrink spending on lower-impact programs to balance the budget.
The City must ensure the budget is accurate and credible to stabilize the City’s finances and allow leaders to make the right choices.
Key Data
$3 billion
— Amount by which the budget continues to low-ball spending for ongoing programs annually in future years.
$8 billion
— Amount that future annual budget gaps are expected to exceed.
$5.5 billion
— Amount of future annual budget gaps reported by the City.
$1 billion
— Amount of newly identified resources the City used to fund predictable shortfalls in the current year.
New York City's total on-board headcount reached 306,248 at the end of fiscal year 2024, marking a 1 percent increase from the previous year. The Department of Education and the Police Department accounted for 62 percent of the total workforce, despite experiencing declines in staffing levels between fiscal year 2019 and 2024.
Key Data
306,248
— Total on-board headcount for New York City at the end of fiscal year 2024.
62 percent
— Share of total City on-board headcount comprised by Department of Education and Police Department employees in fiscal year 2024.
3,072
— Increase in on-board headcount from fiscal year 2023 to fiscal year 2024.
5,086
— Decline in NYPD on-board headcount between fiscal year 2019 and 2024.
4,555
— Decline in Department of Correction on-board headcount between fiscal year 2019 and 2024.
1,634
— Decline in Department of Social Services on-board headcount between fiscal year 2019 and 2024.
New York City's Mayor's Management Report currently focuses on operational inputs rather than outcomes, failing to provide the necessary data to assess program cost-effectiveness or performance. Improving this report with better outcome metrics, resident feedback, and clearer links to budget expenditures would enhance accountability and help the city manage its multi-billion-dollar budget gaps more effectively.
Recommendations related to City Spending Trends
Add outcome, quality, and efficiency metrics that demonstrate how well the City is doing its work.
Link performance metrics to more granular expenditure data, such as the budget function analysis.
Incorporate a periodic, statistically valid, representative resident feedback survey that provides New Yorkers’ ratings on quality of life and government services.
Include more performance targets and a direction for the targets to move.
Utilize the DMMR to provide geographic data for select indicators.
Key Data
66.4%
— Share of restaurants inspected in fiscal year 2024.
99.5%
— Share of restaurants inspected in fiscal year 2019.
83.4%
— Share of restaurants inspected in fiscal year 2023.
$27 Million
— Spending on HRA food assistance programs in fiscal year 2022.
$57 Million
— Spending on HRA food assistance programs in fiscal year 2023.
17.8 Million
— Pounds of food distributed by City Food Connection in 2022.
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,…
New York City's fiscal year 2025 budget relies on significant underbudgeting and prior-year revenues to mask structural deficits that are projected to exceed $9 billion annually in the coming years. Despite claims of surpluses and restored funding, the city faces persistent fiscal cliffs driven by the need to cover current service levels and unfunded mandates.
Key Data
$4.7 Billion
— The estimated budget gap for fiscal year 2025 if the Program to Eliminate the Gap (PEG) savings had not been implemented.
7.3%
— The total portion of the $15.4 billion in original PEG savings that were restored over five years.
$2.6 Billion
— The amount the fiscal year 2025 budget is short to support current service levels.
$9.3 Billion
— The projected budget gap for fiscal year 2026 when accounting for expected spending increases.
$1.1 Billion
— The amount of prior-year revenues the city spent down in fiscal year 2024 to cover its obligations.
$16.0 Billion
— The potential budget gap in fiscal year 2028 if the eligibility expansion for the CityFHEPS housing voucher program is implemented.
New York City faces significant budget shortfalls, with a $2.2 billion gap in fiscal year 2025 to maintain current services and even larger deficits projected for future years. To improve fiscal health, the City must prioritize transparent budgeting, offset new spending with recurring savings, and build its Rainy Day Fund reserves to a target of $12.7 billion.
Recommendations related to City Spending Trends
The City should adopt a transparent, accurate budget that fully funds planned services and clearly identifies those that will be trimmed or cut.
To ensure sustainability, the City should ensure that any new spending added during budget adoption is offset by recurring savings from efficiencies or the reduction of lower impact programs.
The City should deposit at least $1 billion into the Rainy Day Fund over the current and next fiscal year to protect against recessions or emergencies.
The City should enact mandatory deposit rules to ensure the Rainy Day Fund is built up over time.
Key Data
$65 million
— Shortfall in fiscal year 2025 for Early Intervention services.
$22 million
— Shortfall for Department of Sanitation litter basket service.
$2.2 billion
— Total budget shortfall in fiscal year 2025 to continue current programs.
$2.6 billion and $2.8 billion
— Projected budget shortfalls for the outyears.
$2.3 billion, $1.9 billion, and $1.6 billion
— Spending increases in adopted budgets for fiscal years 2022 to 2024, respectively.
$500 million
— Recommended deposit in the Rainy Day Fund for fiscal year 2024.
New York City's Department of Education spending is projected to reach $39.8 billion in fiscal year 2024, marking a 15.2 percent increase since fiscal year 2020. Simultaneously, per-student spending at K-12 schools is expected to rise to $39,304 in fiscal year 2025, representing a 26.3 percent increase since fiscal year 2020 despite fluctuating enrollment levels.
Key Data
$39.8 billion
— Total DOE expenditures projected for fiscal year 2024.
15.2 percent
— Increase in total DOE expenditures since fiscal year 2020.
$39,304
— Per-student spending at K-12 DOE schools expected in fiscal year 2025.
26.3 percent
— Increase in per-student spending since fiscal year 2020.
$2.1 billion
— Increase in City-funded spending for the Department of Education in fiscal year 2025.
10.2 percent
— Increase in City-funded spending for the Department of Education in fiscal year 2025.
The NYC Fiscal Year 2025 Executive Budget proposes a 6.3 percent increase in City-funded spending, amounting to $5.2 billion over the previous fiscal year. Between fiscal years 2020 and 2025, City-funded spending is projected to grow by $16.9 billion, outpacing inflation by $4.4 billion.
Key Data
$5.2 billion
— The proposed increase in City-funded spending from fiscal year 2024 to fiscal year 2025.
6.3 percent
— The rate of increase in City-funded spending from fiscal year 2024 to fiscal year 2025.
$16.9 billion
— The total growth in City-funded spending from fiscal year 2020 to fiscal year 2025.
24.2 percent
— The cumulative growth percentage of City-funded spending from fiscal year 2020 to fiscal year 2025.
$4.4 billion
— The amount by which City-funded spending would outpace inflation between fiscal years 2020 and 2025.
$19.0 billion
— The increase in all-funds spending between fiscal years 2020 and 2025.
New Yorkers' satisfaction with city services and quality of life has declined significantly since 2017, with only 11 percent of residents believing tax dollars are spent wisely. The city should prioritize high-impact programs to improve service delivery while considering spending reductions and tax relief for middle-income households facing affordability challenges.
Recommendations related to City Spending Trends
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.
Beyond that, 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 these and service shortcomings should be continued and possibly intensified.
Statistically valid, standardized, and consistent resident feedback surveys should be used to manage performance and identify areas that need improvement.
Key Data
11%
— New Yorkers who believe the government is spending tax dollars wisely, down from 21 percent in 2017.
30%
— New Yorkers who rate the quality of life as excellent or good, down from 50 percent in 2017 and 2008.
24%
— New Yorkers who rate NYC government services as excellent or good, compared to 44 percent in 2017.
24%
— New Yorkers who believe the City promotes economic growth, down from 41 percent in 2017.
23%
— New Yorkers who believe the City prepares for an emergency, down from 48 percent in 2017.
The New York City Housing Authority faces a persistent operating budget gap and massive capital needs, with five-year capital requirements totaling $60 billion while the current plan funds only 14 percent of that amount. To address these challenges, the agency must prioritize structural reforms, including leveraging PACT and the Preservation Trust for building rehabilitation and modernizing management practices to improve efficiency.
Recommendations related to City Spending Trends
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
$60 billion
— Total five-year capital need for NYCHA developments.
14 percent
— Portion of the five-year capital need covered by the 2024-2028 capital plan.
$791 million
— The 2023 operating budget gap between public housing expenses and core operating income.
$511 million
— Federal capital funds diverted to fill the operating budget gap in 2022 and 2023.
$1.5 billion
— Personnel costs in 2023, representing half of the operating budget.
43 percent
— Public housing residents reporting three or more housing condition issues.
The NYC Fiscal Year 2025 Preliminary Budget relies on underbudgeting and temporary funding, creating a precarious fiscal situation with projected future budget gaps between $8.8 billion and $9.7 billion. To ensure long-term stability, the City must accurately fund current programs and prioritize high-impact services rather than relying on unsustainable fiscal practices.
Recommendations related to City Spending Trends
We urge you to ensure that your proposals to add or modify spending are affordable and do not make the City budget even more fiscally precarious.
This first requires that the City fully fund the programs it plans to deliver.
The spending plan has to accurately reflect the program plan.
The 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.
Key Data
$3.6 billion
— Shortfall in fiscal year 2025 needed to continue the current level of services.
$8.8 billion to $9.7 billion
— Projected future budget gaps, even without expanding City FHEPS or complying with the State class size reduction law.
$10.2 billion
— Resources found across fiscal years 2024 and 2025 from higher revenue, in-year reserves, and spending reductions.
$7.1 billion
— Amount of resources used to balance the fiscal year 2025 budget.
$2.5 billion
— Amount of resources used to fund underbudgeted fiscal year 2024 programs.
$800 million
— Expected cost of City FHEPS vouchers this year.
New York City's fiscal year 2025 preliminary budget projects continued spending growth, with the city facing annual budget gaps of up to $9.7 billion through 2028. To address these fiscal challenges, the city must prioritize transparency regarding program costs and take decisive action to slow spending growth rather than canceling planned savings initiatives.
Recommendations related to City Spending Trends
Additional actions are needed to slow spending growth and close gaps.
The budget should be more transparent by showing the full costs of programs and identifying which will be shrunk or eliminated.
Mayor Eric Adams and the City Council should take action to put the City on solid fiscal footing.
The city should prioritize programs and increase efficiency to address the precarious fiscal condition.
Key Data
$2.3 billion
— The proposed increase in City-funded spending for fiscal year 2025.
$19.7 billion
— The increase in City-funded spending between 2012 and 2019.
$3.6 billion to $3.9 billion
— The annual shortfall in the fiscal year 2025 preliminary budget needed to continue programs at current service levels.
$9.1 billion
— The projected out-year budget gap for fiscal year 2026.
$8.8 billion
— The projected out-year budget gap for fiscal year 2027.
$9.7 billion
— The projected out-year budget gap for fiscal year 2028.
New York State and its localities spent $15,350 per capita in 2021, which is 50% higher than the national average. Additionally, the state collected the highest amount of taxes per person in the country at $10,331, and the highest taxes per $1,000 of personal income at $135.
Key Data
$15,350
— Total state and local expenditure per capita in New York in 2021.
50%
— Amount by which New York state and local per capita spending exceeded the national average in 2021.
$10,331
— Total state and local taxes collected per capita in New York in 2021, the highest of all states.
$135
— Total state and local taxes collected per $1,000 of personal income in New York in 2021.
$3,343
— Total state and local property tax revenue per capita in New York in 2021.
$2,324
— Total state and local sales tax revenue per capita in New York in 2021.
New York City's fiscal year 2025 preliminary budget faces a $3.6 billion shortfall, as planned spending fails to cover the full cost of maintaining current service levels. If current programs are fully funded, projected budget gaps for fiscal years 2026 through 2028 could reach between $8.8 billion and $9.7 billion, necessitating difficult decisions regarding program prioritization and efficiency.
Recommendations related to City Spending Trends
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 Administration should continue with its original plan to implement a PEG in the Fiscal Year 2025 Executive Budget.
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 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 by which the Preliminary Budget's planned spending in fiscal year 2025 is short of what is needed to fund programs and expenses at the current service level.
$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 identified in the fiscal year 2025 budget.
$675 million
— The federal-funds fiscal cliff identified in the fiscal year 2025 budget, primarily for Department of Education programs.
$800 million
— The amount of chronic underbudgeting in the fiscal year 2025 budget, including uniformed overtime and mandated MTA subsidies.
New York City's fiscal year 2025 preliminary budget faces significant challenges, with future budget gaps estimated between $5 and $6 billion and spending levels that remain 21.5 percent higher than in fiscal year 2020. To address these fiscal cliffs and ensure long-term stability, the city must improve budget transparency, restrain spending through increased efficiency, and clearly detail the sources of savings.
Recommendations related to City Spending Trends
The City should do much more to transparently budget for the projected costs of all programs, or explicitly shrink or sunset them.
The City should detail the sources of these savings 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 further restrain spending by prioritizing programs and increasing efficiency, and all who are interested in a strong future New York should engage and support this effort.
Key Data
$5 to $6 billion
— Future budget gaps understating the magnitude of the City’s remaining fiscal problem.
2.9 percent
— Increase in adjusted fiscal year 2025 City-funded spending from fiscal year 2024.
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.
The November 2023 Program to Eliminate the Gap (PEG) aims to reduce city-funded spending by 5 percent, though actual reductions are closer to 2.2 percent due to significant exclusions like migrant services and debt service. While 80 percent of these savings do not impact services, the city must continue to prioritize data-driven efficiency improvements and standardized procurement practices to manage future budget gaps effectively.
Recommendations related to City Spending Trends
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.
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.
Efforts to identify efficiencies should be continued and strengthened to manage future budget gaps.
Key Data
$10.8 billion
— Spending on housing and services for migrants and asylum seekers in fiscal years 2024 and 2025.
$7.1 billion
— Projected out-year budget gap for fiscal year 2025.
$6.5 billion
— Projected out-year budget gap for fiscal year 2026.
$6.4 billion
— Projected out-year budget gap for fiscal year 2027.
2,407 positions
— Number of full-time positions eliminated in fiscal year 2025 through vacancy reduction initiatives.
$172 million
— Savings from vacancy reduction and hiring freeze initiatives in fiscal year 2024.
New York City's fiscal year 2025 budget gap has widened to $10.6 billion when accounting for the fiscal cliff and program underbudgeting, driven largely by the rising costs of serving asylum seekers. To address these financial challenges, the city must prioritize efficiency, work with labor to adjust work rules, and seek greater financial support from federal and state partners.
Recommendations related to City Spending Trends
The City needs a citywide look at program impact and efficiency to identify all opportunities to reduce costs without cutting critical services.
The City should work with labor, making changes as needed to work rules and job titles, with a focus on maintaining high-quality critical services while reducing costs.
The City should do all it can to reduce asylum seeker and migrant costs, which appear high, by efficiently providing only the most critical services.
The City should consolidate welfare benefit funds to save $150 million without cutting actual benefits.
The federal government should share a fair portion of the costs for asylum seekers and migrants.
Key Data
$7.1 billion
— The fiscal year 2025 budget gap, which widened from a previously estimated $5.1 billion.
$10.6 billion
— The total fiscal year 2025 budget gap when including the fiscal cliff and underbudgeting of programs.
$150 million
— Potential savings from consolidating welfare benefit funds without cutting actual benefits.
$10 billion
— The increase in projected spending on asylum seekers and migrants over four years.
90 percent
— The portion of asylum seeker and migrant costs coming from City coffers.
$2.4 billion
— The cost of the fiscal cliff excluded from the initial budget gap estimate.
New York City faces substantial budget gaps, reaching over 12.5 percent of City-funded spending, which necessitates difficult decisions regarding service prioritization and government efficiency. To achieve structural stability, the City must address recurring expenses, manage fiscal cliffs, and carefully evaluate the costs of programs like asylum seeker services and housing voucher expansions.
Recommendations related to City Spending Trends
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 also require an increase in government efficiency and a focus on getting the basics right.
The City should increase the budget for uniformed overtime, Carter Cases, and student transportation to the actual levels they’ve historically reached, or have a plan to drastically reduce spending.
Key Data
$11.3 billion
— The fiscal year 2025 budget gap the City will have to close.
$11.4 billion
— The projected budget gap in fiscal year 2026 if current programs are fully funded.
$11.8 billion
— The projected budget gap in fiscal year 2027 if current programs are fully funded.
$1.7 billion
— Planned savings due to the 5 percent Program to Eliminate the Gap (PEG) announced for the November 2023 financial plan.
$839 million
— The amount fiscal year 2024 may be short to fund planned services.
$4.7 billion
— The updated fiscal year 2024 spending projection for asylum seeker and migrant services.
New York City faces a significant fiscal cliff with projected budget gaps reaching up to $13.8 billion, driven by years of increased city-funded spending that has outpaced recurring revenue. To stabilize the budget, the city must prioritize impactful programs, improve operational efficiency, and manage headcount while avoiding the addition of new spending that undermines savings efforts.
Recommendations related to City Spending Trends
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.
The city must greatly improve its data on program efficiency and effectiveness, and implement a performance management and accountability process.
Agencies should implement changes to deliver services more efficiently and help the city run better.
The mayor’s office should take a hard look at staffing and performance, and make nuanced decisions to ensure city government can function 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
42%
— Portion of the Fiscal Year 2025 budget gap attributed to the cost of caring for new arrivals.
$9.9 billion
— Lower estimate of the projected budget gap for next year.
$13.8 billion
— Upper estimate of the projected budget gap for next year.
50%
— Increase in city-funded spending over the past decade.
$16 billion
— Amount added to the budget for union raises without identified funding.
$2.5 billion
— Value of programs funded by federal Covid aid and temporary tax revenue.
New York City faces a potential $13.8 billion budget gap for fiscal year 2025, with migrant services accounting for $6.1 billion of that total. To address this, the administration is requiring agencies to implement 5 percent budget savings while restructuring operations to curb spending that has previously outpaced savings efforts by a 3 to 1 ratio.
Recommendations related to City Spending Trends
Agencies should proceed with the Mayor's directive to propose 5 percent budget savings—PEGs—for the November plan and prepare for two more 5 percent rounds in January and April.
The City should reduce the costs of shelter and services, which currently appear extraordinarily high.
The City must restructure operations to significantly reduce costs, which would be critical even without the migrant crisis.
Key Data
$13.8 billion
— The total potential fiscal year 2025 budget gap.
$6.1 billion
— The estimated cost of services to migrants next year.
3 to 1
— The ratio by which previous savings programs were overmatched by additional spending for new and expanded programs, collective bargaining, and pensions.
5 percent
— The amount of budget savings agencies are directed to propose for the November plan.
New York City's fiscal year 2024 budget is actually $112.6 billion when accounting for prepaid obligations, reflecting a $20 billion increase over the 2019 budget. Despite claims of austerity, the city faces significant future budget gaps that are projected to grow from $8.7 billion to $11.5 billion by 2027 due to fiscal cliffs and underbudgeted programs.
Recommendations related to City Spending Trends
The City should flexibly allocate vacant positions where they are needed.
The City should speed up review and approval processes to hire expeditiously.
The City should increase flexibility of work rules, job titles, and schedules to address staffing challenges.
The City should modernize and better manage civil service regulations to improve hiring.
The City should identify other ways to better compete with the private sector for talent.
Key Data
$112.6 billion
— The total New York City FY 2024 adopted budget, including prepaid obligations.
26,000
— The number of vacant positions budgeted in fiscal year 2024.
$2.6 billion
— The average cumulative recurring savings from the Programs to Eliminate the Gap (PEG).
$20 billion
— The total increase in the City budget between fiscal years 2019 and 2024.
$8.7 billion
— The projected budget gap for the upcoming fiscal year.
$11.5 billion
— The projected budget gap in fiscal year 2027.
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
The fiscal year 2024 budget agreement relies on $2.3 billion in available resources to increase spending without securing the necessary offsetting savings to ensure long-term sustainability. This approach exacerbates future budget gaps and fiscal cliffs while failing to prioritize productivity improvements or contributions to the Rainy Day Fund.
Recommendations related to City Spending Trends
The City should spend within its means rather than waiting until it slams into a fiscal wall.
The City should prioritize programs, reduce spending on those with lower impact, and restructure operations to increase productivity.
The Administration, City Council, and municipal unions should collaborate to ensure the City can deliver services at a cost the City can afford.
The City should stop the practice of 'cliff dancing', which involves funding major programs one year at a time and creating massive annual service crises.
Key Data
$2.3 billion
— The budget uses this amount in available resources to add billions of dollars of spending without the offsetting savings needed to sustain them.
New York City's fiscal year 2024 executive budget proposes spending $107.6 billion in all funds, yet the city faces significant future budget gaps reaching $10.7 billion by fiscal year 2027. To achieve fiscal sustainability, the city must move beyond using one-time federal aid and tax revenue to expand programs and instead implement productivity-focused savings plans.
Recommendations related to City Spending Trends
The City must implement additional PEGs focused on productivity and prioritization of higher impact programs to ensure the budget is on a fiscally sustainable path.
Key Data
$107.6 billion
— Proposed spending in All funds for the fiscal year 2024 executive budget.
$78.5 billion
— Proposed spending in City funds for the fiscal year 2024 executive budget.
$13.0 billion
— Unprecedented influx of federal COVID aid received by the City.
$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.
New York City's recent savings initiatives, including Programs to Eliminate the Gap (PEGs), have failed to sufficiently address widening budget gaps that are projected to reach $11 billion by fiscal year 2027. To balance the budget without cutting critical services, the city must prioritize restructuring operations and improving efficiency rather than relying on vacancy reductions and illusory savings.
Recommendations related to City Spending Trends
Future actions should focus much more on prioritizing impactful programs and restructuring operations to preserve services.
The City has sufficient vacancies and should not be adding new positions.
The City should shift vacancies to where they are most needed and take steps to aggressively reform how it hires, especially for critical functions.
The best strategy to narrow budget gaps significantly while preserving services is to implement additional PEGs that focus on improving efficiency—reducing costs without reducing services.
The City should prioritize efficiency-focused savings in the adopted budget and in future financial plans.
Key Data
$4.1 billion
— Cumulative recurring savings from PEGs and vacancy reduction initiatives.
$1.1 billion
— Average annual savings from the Fiscal Year 2024 Executive Budget PEG from fiscal year 2024 onwards.
23,000
— Number of full-time positions that remain vacant as of January 2023.
$11 billion
— Projected budget gap by fiscal year 2027.
$18 million
— Annual illusory savings in fiscal years 2024 and 2025.
New York City's rental assistance programs have seen costs surge from $16 million in fiscal year 2015 to a projected $636 million in fiscal year 2023, creating a $450 million fiscal cliff for fiscal year 2024. To address this, the City must secure federal and state funding, provide realistic cost estimates, and identify recurring revenue sources before expanding eligibility for programs like CityFHEPS.
Recommendations related to City Spending Trends
Any proposed expansion to CityFHEPS should include a fiscal impact statement that shows how much it would increase costs and identifies recurring revenues to pay for it.
Budget amounts and allocation decisions, including any expansion to CityFHEPS, should be grounded in realistic utilization and cost estimates for the current program, most of which is unfunded in the future.
The City should provide realistic estimates of the program’s cost and reflect those in the City budget.
Consideration of the three pending bills that would expand eligibility for CityFHEPS should be based on their impact on City spending and from where the resources would come, including what other program spending may be reduced.
An effective, holistic strategy should include appropriate voucher funding from the federal and State governments.
Key Data
$16 million
— Cost of rental assistance programs in fiscal year 2015.
$636 million
— Anticipated cost of rental assistance programs in fiscal year 2023.
$450 million
— Fiscal cliff for rental assistance programs in fiscal year 2024.
$410 million
— City funding allocated for CityFHEPS in fiscal year 2023.
$392 million
— Drop in CityFHEPS funding from fiscal year 2023 to fiscal year 2024.
$6.8 billion
— Total budget shortfall facing the City in fiscal year 2025.
The New York City Fiscal Year 2024 Executive Budget faces significant long-term fiscal challenges, with projected budget gaps reaching $10.0 billion by fiscal year 2027 when accounting for underbudgeted programs. Despite these widening gaps, the city continues to add new positions while maintaining 23,000 vacancies and failing to adequately fund existing programs, necessitating a shift toward prioritizing essential services and increasing operational efficiency.
Recommendations related to City Spending Trends
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 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
$10.0 billion
— Projected future shortfall by fiscal year 2027 when accounting for underbudgeted programs and fiscal cliffs.
$4.2 billion
— Projected budget gap in fiscal year 2025.
23,000
— Number of existing vacancies in the City.
$1.0 billion
— Amount of existing City-funded programs not funded in the fiscal year 2024 budget.
82 percent
— Portion of the Program to Eliminate the Gap (PEG) savings that is offset by new spending.
$2.2 billion
— Amount of fiscal year 2023 programmatic spending not included in the fiscal year 2024 budget.
The New York City Department of Buildings' budget has grown significantly, reaching $322.1 million in fiscal year 2023, with spending doubling over the past nine years. Despite this increased funding and a 45 percent growth in staff since 2014, the agency continues to struggle with an 18 percent vacancy rate and deteriorating performance metrics in areas like plan review times and job audits.
Recommendations related to City Spending Trends
Improving hiring at the Department of Buildings remains a priority, especially as the first year of compliance with Local Law 97 nears.
Key Data
$322.1 million
— Total projected spending on the Department of Buildings in fiscal year 2023.
45 percent
— Growth in on-board headcount for the Department of Buildings from fiscal year 2014 to fiscal year 2022.
18 percent
— Vacancy rate of authorized full-time positions at the Department of Buildings.
2 percent
— Percentage of professionally certified jobs audited by the Department of Buildings in fiscal year 2022.
$239.7 million
— Current modified budget of the Department of Buildings for fiscal year 2023.
$317 million
— Average annual revenue collected by the Department of Buildings between fiscal years 2014 and 2022.
New York City faces significant fiscal challenges, with projected budget gaps reaching $9.7 billion in fiscal year 2025 and $14.5 billion in fiscal year 2027, exacerbated by $17 billion in new labor costs. To address these shortfalls without service cuts, the city must prioritize high-impact services, streamline bureaucracy, and improve government productivity through measures like consolidating welfare-benefit funds and increasing sanitation efficiency.
Recommendations related to City Spending Trends
The city must thoughtfully rein in its spending by restructuring and prioritizing high impact services, not by slashing programs or pruning low hanging fruit.
The city should reduce costs of centralized services, while reorganizing operations, streamlining bureaucracy, and leveraging technology to generate savings.
Consolidating welfare-benefit funds would save $150 million from efficiency and purchasing power.
Increasing sanitation productivity could save $100 million annually.
Additional savings across government is possible through overtime caps, ambulance staffing changes, and more.
Key Data
$9.7 billion
— Projected budget gap in fiscal year 2025.
$14.5 billion
— Projected budget gap in fiscal year 2027.
$17 billion
— Spending added over five years due to agreed-upon employee raises.
$150 million
— Potential savings from consolidating welfare-benefit funds.
$100 million
— Potential annual savings from increasing sanitation productivity.
12%
— Rise in private-sector productivity over the past decade.
The Adams Administration's three savings plans reduce ongoing budgeted spending by approximately $3.0 billion annually, with the vast majority of these savings coming from re-estimating costs, eliminating vacancies, and debt service savings rather than service cuts. While these initiatives eliminated 11,386 vacant full-time positions, the city maintains nearly 23,000 remaining vacancies, indicating that staffing challenges are not caused by a lack of budgeted positions.
Key Data
$3.0 billion
— The three savings plans implemented by the Adams Administration reduce ongoing budgeted spending by approximately $3.0 billion annually.
3.4 percent
— Savings from the administration's plans equal 3.4 percent of the total budget, excluding Medicaid, Public Assistance, and pension contributions.
92 percent
— At least 92 percent of the recurring impact from the savings plans should not affect services expected to be delivered.
23,000
— The City still has nearly 23,000 vacant full-time positions, in addition to other part-time vacancies.
0.3 percent
— Reductions that potentially affect programs equal 0.3 percent of the total budget, excluding Medicaid, Public Assistance, and pension contributions.
New York City's Department of Education budget reached $36.9 billion in fiscal year 2023, even as K-12 enrollment declined by over 141,000 students between 2015 and 2022, leading to a rapid rise in per-student spending. With federal pandemic aid expiring and enrollment continuing to fall, the city faces a projected $12.0 billion budget gap by fiscal year 2026, necessitating careful management of school funding and program priorities.
Recommendations related to City Spending Trends
Consider per-student spending and recognize that declining enrollment could yield flat or reduced total spending.
Diligently manage the impact of enrollment declines in individual schools with appropriate changes in funding and staffing to ensure the smoothest possible continuity and equity of services.
Identify priority programs funded by expiring federal pandemic aid and be transparent about whether the DOE plans to replace the one-time federal funds with recurring City and State resources or to shrink or end the programs.
Evaluate and modify DOE programs and initiatives to prioritize those that deliver maximum impact to the target populations.
Key Data
$36.9 billion
— The total NYC Department of Education budget for fiscal year 2023.
32.5 percent
— The growth in DOE spending between fiscal years 2016 and 2022.
141,000 students
— The decline in K-12 DOE enrollment between school years 2015-16 and 2021-22.
$37,136
— The amount spent per K-12 DOE student in fiscal year 2022.
$12.0 billion
— The likely budget gap for the City in fiscal year 2026.
$556 million
— The estimated fiscal cliff for programs currently funded by non-recurring federal pandemic aid in fiscal year 2026.
New York City's Department of Education faces a budget of $36.5 billion for fiscal year 2024, while grappling with long-term enrollment declines that have caused per-student spending to rise to over $37,000. As federal pandemic aid expires, the city must address significant fiscal cliffs and evaluate program effectiveness to manage a projected $12.0 billion budget gap by fiscal year 2026.
Recommendations related to City Spending Trends
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.
Key Data
$12.0 billion
— The likely City budget gap in fiscal year 2026, or even larger if there is a recession.
$37,000
— The amount spent per K-12 DOE student in fiscal year 2022, including centrally allocated costs.
141,000
— The number of students lost by K-12 DOE schools between school years 2015-16 and 2021-22.
$500 million
— The amount the City consistently underbudgets annually for Carter Cases that fund private school tuition for special education students, pupil transportation, and charter schools.
$321 million
— The estimated fiscal cliff in fiscal year 2025 due to expiring federal funds.
$556 million
— The estimated fiscal cliff in fiscal year 2026 due to expiring federal funds.
The New York City Housing Authority faces a structural budget gap driven by rising operating costs, which reached $1,500 per unit per month, and a record-low rent collection rate of 64 percent. To achieve solvency, the agency relies heavily on non-recurring revenue and subsidies, necessitating structural reforms rather than continued reliance on one-time bailouts.
Recommendations related to City Spending Trends
NYCHA must fix deteriorating buildings through the RAD program and the Preservation Trust.
The authority should improve property management to address operational inefficiencies.
NYCHA needs to boost rent collections to ensure adequate revenue.
The agency should negotiate savings and increased productivity through collective bargaining.
NYCHA should seek to appropriately enforce tenant obligations to pay rent to address revenue shortfalls.
Key Data
$1,500
— Average cost to operate NYCHA's public housing per unit per month.
64%
— All-time low rent collection rate in December 2022.
$454 million
— Total unpaid rent accrued by NYCHA households as of December 2022.
$152 million
— Total overtime spending by NYCHA in 2022.
$789 million
— Amount of non-operating sources used to balance the 2022 budget.
$211 million
— Remaining reserves held by NYCHA at the end of 2022.
The tentative contract agreement with District Council 37 will cost approximately $16.2 billion more than currently budgeted, widening city budget gaps to $10.6 billion by fiscal year 2027. To manage these costs, the city must implement productivity savings and exercise caution to avoid adding further economic burdens in future labor negotiations.
Recommendations related to City Spending Trends
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
— The estimated additional cost of the tentative contract agreement over the contract period, assuming it sets the pattern for all other unions.
$10.6 billion
— The projected City budget gap in fiscal year 2027.
$6.4 billion
— The projected City budget gap in fiscal year 2025.
$9.1 billion
— The projected City budget gap in fiscal year 2026.
$2.5 billion
— The estimated additional spending in fiscal year 2023.
$2.3 billion
— The estimated additional spending in fiscal year 2024.
New York City's Fiscal Year 2024 Preliminary Budget balances current resources but faces significant future fiscal risks, including budget gaps projected to reach $6.5 billion by 2027 and potential liabilities exceeding $10 billion. 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 Spending Trends
The Administration should address the $1.1 billion fiscal cliff, deposit $1.0 billion in the Rainy Day Fund, and initiate a productivity PEG to task agencies with restructuring programs to improve quality and cost-effectiveness.
The City should prioritize critical services, manage them relentlessly, save for a rainy day, and protect from massive future cuts by restraining spending growth.
The City Council should focus not just on programs that serve New Yorkers today, but on how to mitigate significant future risks to ensure adequate resources for the near future.
The City should replicate the effort to increase the speed of land use reviews and remove administrative barriers to development across other City agencies and programs.
Sufficient funds should be available to deposit $1 billion to the Rainy Day Fund.
Key Data
$1.1 billion
— The fiscal cliff amount that the Administration's planning for its Executive Budget should address.
$1.0 billion
— The amount that should be deposited into the Rainy Day Fund.
$5.0 billion
— The projected budget gap in fiscal year 2026.
$6.5 billion
— The projected budget gap in fiscal year 2027.
$10.0 billion
— The potential size of budget gaps if future labor agreements, fiscal cliff funding, and migrant services are included.
4,300
— The number of vacant positions reduced in the Fiscal Year 2024 Preliminary Budget.
New York City's health insurance costs for employees and retirees are projected to rise by 8.5 percent annually through fiscal year 2026, necessitating structural reforms to ensure budget sustainability. Proposed measures include implementing the Medicare Advantage Plus plan, introducing premium sharing, and conducting a comprehensive review of benefits to reduce long-term liabilities.
Recommendations related to City Spending Trends
The City should implement the agreement between the City and Municipal Labor Committee to allow retirees to enroll in the new Medicare Advantage Plus plan.
The City should repeal the law in whole regarding benefit specificity, as this level of detail should not be codified.
The City and Municipal Labor Committee should undertake a comprehensive review of health and welfare benefits for employees and retirees to reduce costs to more manageable levels.
The City should implement premium sharing for employees and pre-Medicare retirees to align benefits with other public and private sector workers.
The City should eliminate some or all of the Medicare Part B reimbursement as part of a set of policy changes to preserve employee health and welfare while reducing costs.
The City should pursue the consolidation of union welfare fund benefits to help reduce the City's costs.
Key Data
8.5 percent
— Annual rate of increase for health insurance costs budgeted between fiscal years 2023 and 2026.
$200
— Monthly premium for retirees who choose to remain in their current Medigap program.
$600 million
— Estimated annual reduction in the City's costs resulting from the Medicare Advantage plan.
New York City faces a precarious 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 operations rather than relying solely on spending re-estimates.
Recommendations related to City Spending Trends
The City should make additional and ongoing efforts to reduce these budget 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 the $1 billion in new spending for services provided to migrants.
The City should 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 stability.
Key Data
$4.6 billion
— Projected budget gap in fiscal year 2025.
$5.9 billion
— Projected budget gap in fiscal year 2026.
$916 million
— PEG program spending reduction in fiscal year 2023.
$1.6 billion
— PEG program spending reduction in fiscal year 2024.
$1 billion
— New spending for services provided to migrants.
$900 million
— Cost increase in the first year from three percent annual employee raises.
New York City has utilized one-time federal COVID-19 relief funds to support recurring programs, creating a projected fiscal cliff of at least $1.1 billion by fiscal year 2026. Without a robust tracking system to measure the outcomes of these investments or a plan to address the impending budget gaps, the city faces significant financial instability as federal aid is depleted.
Recommendations related to City Spending Trends
The City should clearly state that these programs will end when the federal aid is depleted, or that they will continue and either widen the City’s budget gap or be supported with identified revenues or other program reductions.
The City should closely assess how best to allocate those funds and provide clear and transparent information about the programs being funded, including goals, benchmarks, and performance metrics.
The City should release a list of programs that will be underfunded when the federal aid is depleted.
The list should quantify the shortfall in funding by program and clearly state whether the program will be ended.
If the City intends to continue these programs with City dollars, it should include them in baseline spending in the financial plan and either widen budget gaps or fund them with resources reallocated from existing programs.
Key Data
$25 billion
— Total federal COVID-19 relief funds received by New York City from all sources.
$1.1 billion
— The federal funding fiscal cliff projected for fiscal year 2026.
$6.2 billion
— Remaining federal funds to be spent over the three years following November 2022.
$3.7 billion
— The original projected fiscal year 2025 budget gap.
$4.1 billion
— The projected fiscal year 2025 budget gap if fiscal cliff programs are continued without reallocation.
$5.1 billion
— The projected fiscal year 2026 budget gap if fiscal cliff programs are continued without reallocation.
The NYC Ferry system requires significant subsidies, with an average per-trip cost of $9.85 in fiscal year 2021, forcing the Economic Development Corporation to divert $40 million in revenue and $25 million in cash reserves to cover operating gaps in 2019. To stabilize finances, the city should increase fares to match premium transit services, eliminate low-ridership routes, and avoid costly expansions like the proposed Coney Island line.
Recommendations related to City Spending Trends
The City should eliminate the lowest-ridership routes to reduce the total subsidy.
The City should avoid money-losing expansions to reduce the total subsidy.
The City should target subsidies to those in the greatest need of affordable transit options.
The City should increase fares for other riders to match those of comparable premium transit services, like the MTA’s express bus system.
The City should structure the discounted 10-ticket package so that it can only be used by individual commuters and not by groups.
The City should include the cost of debt service on City capital spending related to the ferry system in supplementary financial data.
Key Data
$9.85
— The average per-trip subsidy for NYC Ferry in fiscal year 2021.
$25
— The potential subsidy per trip for the proposed Coney Island ferry expansion.
$40 million
— The amount of revenue EDC diverted in fiscal year 2019 to cover the gap between ferry revenues and expenses.
$25 million
— The amount of cash reserves EDC diverted in fiscal year 2019 to cover the gap between ferry revenues and expenses.
20%
— The portion of NYC Ferry's operating expenses covered by fare revenues in fiscal year 2019.
$30 million
— The amount of federal COVID-related aid used to support ferry operations in fiscal year 2022.
New York City's budget has grown significantly over the last decade, outpacing inflation and creating projected annual gaps that could reach $10 billion. To address these fiscal challenges, the city must implement efficiency measures, restructure operations, and strategically manage its workforce to stabilize long-term finances without compromising critical services.
Recommendations related to City Spending Trends
The city needs to both restrain spending and better manage vacancies and hiring.
Reorganizing operations, streamlining bureaucratic approvals, leveraging technology and fundamentally changing ways of doing business can boost productivity.
The city should modernize contracts to reduce recurring costs, fund workers’ raises and narrow budget gaps.
The city should eliminate many thousands of unneeded vacant positions to improve government structure.
The city should focus on increasing efficiency and reducing underutilized services to preserve and enhance what New Yorkers need most.
Key Data
$27 billion
— Growth of the city-funded portion of the budget since 2013.
4.3%
— Annual growth rate of the city-funded budget portion since 2013.
$4 billion
— Annual budget gaps projected in the near future.
$10 billion
— Projected budget gaps in the near future according to city and state comptrollers.
$2 billion to $3 billion
— Amount by which annual pension contributions will be higher than budgeted due to poor stock-market performance.
$1 billion to $2 billion
— Amount of recurring programs supported by one-time federal COVID aid and city revenues.
New York City's waste management system faces high collection costs and low productivity, with recycling collection costing $615 per ton compared to $342 for refuse. Implementing volume-based fees and optimizing collection strategies could improve diversion rates and generate significant fiscal savings.
Recommendations related to City Spending Trends
The City should institute a volume-based fee for waste to incentivize recycling, organic composting, and waste reduction.
The City should negotiate operational and work-rule changes with labor to improve the productivity of recycling and refuse collection.
The City should expand organic composting by increasing drop-off sites, encouraging the use of in-sink disposers, and piloting on-site anaerobic micro digesters.
The City should reconsider conducting the study on how to implement a volume-based fee in New York City.
The City should use GIS technology to optimize collection routes.
The City should increase the use of one-worker automated collection vehicles where appropriate.
Key Data
$615 per ton
— Recycling collection cost in fiscal year 2021.
$342 per ton
— Cost of collecting refuse in fiscal year 2021.
$203 per ton
— Refuse disposal cost in fiscal year 2021.
$53 per ton
— Recycling processing cost in fiscal year 2021.
$150
— Savings for each additional ton of recyclables properly sorted and recycled.
$1,700 per ton
— Potential high collection cost of the curbside organic program.
New York City's land use review process is overly complex and time-consuming, with a median approval time of 30 months for discretionary projects, which increases development costs by 11% to 16%. This dysfunctional system, characterized by lengthy environmental reviews and multiple veto points, discourages new development and hinders the city's ability to meet its housing and economic goals.
Recommendations related to City Spending Trends
New York State should amend environmental review laws to reduce barriers to beneficial growth and development.
New York State should encourage local governments to streamline approvals of projects that help achieve identified regional housing and job-creation goals.
New York City should create a process that evaluates proposals based on potential benefits and alignment with goals of its Charter-mandated strategic plan and other plans.
New York City should make advisory reviews at the community level more collaborative, participatory, and productive.
New York City should streamline and rationalize environmental review within limitations of State law.
New York City should better balance citywide needs and neighborhood concerns through an appeals process or requirement of a City Council supermajority to reject an application.
Key Data
11% to 16%
— The range of increased development costs for a two-year-long discretionary approval process.
30 months
— The median length of time to secure approval for projects that were approved.
80%
— The share of residential units approved between 2010 and 2018 that were built as-of-right.
$67,000
— The estimated cost increase per unit for a high-rise building due to a two-year-long review process.
60%
— The percentage of private rezoning applications initiated between 2014 and 2017 that were ultimately approved.
887 days
— The median approval time for all private discretionary projects in New York City.
The NYC Ferry system requires a more transparent accounting of total operating costs, including direct and indirect spending and debt service for capital expenditures, to accurately calculate per-ride subsidies. To improve fiscal efficiency, the city should implement higher fares for weekends and longer routes, align single-ride prices with MTA express bus fares, and reallocate subsidy dollars from underperforming routes to higher-value initiatives.
Recommendations related to City Spending Trends
The EDC should strongly consider a single-ride ticket price closer to the MTA’s express bus fare.
The EDC should implement higher fares on weekends and for the longer, more expensive routes.
The EDC should reassess the most subsidized routes to determine if they provide the broad-based value and effectiveness the public deserves from its resources.
The EDC should evaluate the impact of the new fare system on NYC Ferry’s ridership and finances, and if appropriate, increase fares or change routes and timetables.
To properly calculate the per-ride subsidy, costs should be comprehensive, including all direct and indirect EDC spending on ferry operations and City spending, including debt service for all capital expenditures.
New York City's adopted budget for fiscal year 2023 reports total expenditures of $101.1 billion, but actual spending obligations, after accounting for prepayments and reserves, total $104.7 billion. City-funded spending is set to increase by 7.7 percent, 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
— Adjusted City Funds spending for fiscal year 2023.
7.7 percent
— Year-over-year increase in City-funded spending, representing the highest growth rate in the past decade.
$5.5 billion
— The dollar amount increase in City Funds spending over fiscal year 2022.
$1.8 billion
— The amount of spending added to the budget between the Executive Budget and the Adopted Budget for fiscal year 2023.
3.7 percent
— The decrease in All Funds spending from fiscal year 2022 to fiscal year 2023 due to a decline in federal COVID-related funds.
The proposed legislation to mandate class size limits in New York City public schools would impose significant financial burdens, with operating costs for grades kindergarten through five estimated at at least $500 million annually. Rather than mandating a single, costly strategy, the state should focus on accountability systems that prioritize student outcomes and allow districts to tailor evidence-based interventions to their specific needs.
Recommendations related to City Spending Trends
The Governor should veto A.10498/S.9460, which would set class size limits in New York City public schools.
The State should focus on accountability systems that prioritize outcomes and allow each district to choose a portfolio of evidence-based interventions tailored for its students and schools.
Accountability systems should be universal and not treat one district differently, providing the flexibility to assess districts based on their different needs, challenges, and opportunities.
Key Data
$500 million
— The estimated annual operating cost for reducing class size to the new limit in just grades kindergarten to five.
$18 million
— The amount the City has already dedicated to a class size reduction pilot in 72 schools.
2.6 million
— The number of students in New York State that the education system serves.
The New York City fiscal year 2023 budget agreement increases spending by $1.15 billion, driving city-funded spending growth to nearly 8 percent, which is the highest rate in the past decade. While the budget includes some prudent reserves, it misses opportunities for higher rainy day deposits and fails to implement necessary efficiency savings to align recurring revenues with spending.
Recommendations related to City Spending Trends
The City should have added another $1.5 billion to the Rainy Day Fund to strengthen the 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 to sustainability.
The City must take actions to bring recurring revenues and recurring spending in line.
The City needs to engage in a concerted effort to improve government services and secure efficiency savings.
The City should prioritize restructuring operations and focusing on priorities to ensure fiscal sustainability.
Key Data
$1.15 billion
— The amount by which the fiscal year 2023 budget increases spending over the Executive Budget.
8 percent
— The projected fiscal year 2023 City-funded spending growth rate.
$4.3 billion
— The estimated cost of three years of 3 percent salary raises in the third year.
$4.5 billion
— The total amount available to allocate in the budget.
$4 billion
— The average annual budget gap.
$300 million
— The amount of additional savings identified in the Adopted Budget.
New York City is projected to have $12.1 billion in debt capacity through fiscal year 2026, making a proposed increase in the Transitional Finance Authority’s borrowing authority premature. Instead of expanding debt limits, the focus should be on improving capital planning, prioritization, and execution to ensure cost-effective investments.
Recommendations related to City Spending Trends
The State should reject the proposal to increase the New York City Transitional Finance Authority’s (TFA) borrowing capacity that is outside of the City’s constitutional debt limit.
The City should improve its capital planning, prioritization, and execution to ensure that New Yorkers are being provided with cost-effective, targeted capital investments serving their City’s long-run needs.
Key Data
$12.1 billion
— The amount of debt capacity the City expects to have at the end of fiscal year 2026 under current projections.
$95 billion
— The total value of the City's 5-year capital plan, which the current projection assumes will be fully committed.
The New York City Police Department's fiscal year 2023 budget totals $10.9 billion, with increases driven by collective bargaining agreements and new initiatives. Despite these budget adjustments, projected overtime spending is expected to reach $743 million by the end of fiscal year 2022, exceeding the allocated budget by $136 million.
Recommendations related to City Spending Trends
Meaningful recurring reductions in NYPD overtime depend on effective managerial controls and changes to NYPD policies and procedures.
Key Data
$10.9 billion
— Total NYPD spending in fiscal year 2023.
$743 million
— Estimated overtime spending by the end of fiscal year 2022.
$136 million
— Amount by which estimated overtime spending exceeds the modified Executive Budget.
$140 million
— Annual increase to the NYPD City-Funded Budget.
$119 million
— Cost of collective bargaining agreements in fiscal year 2023.
$524 million
— Uniformed overtime budget in fiscal year 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. This approach risks future fiscal instability, particularly given a $2 billion fiscal cliff in 2026 and potentially insufficient labor reserves that could cost an additional $3.8 billion annually.
Recommendations related to City Spending Trends
The City should make every effort it can immediately and include savings in the budget when adopted.
The Mayor and City Council should identify and include 3 percent efficiency savings in the Adopted Budget.
The City should grow rainy day reserves to over $8 billion by the end of the financial plan.
Key Data
$2.3 billion
— The amount of increased City-funded fiscal year 2023 spending.
5 percent
— The growth in spending from fiscal year 2022.
$1 billion
— The amount of recurring spending the Council wants to add.
$270 million
— Savings found in fiscal year 2022.
$141 million
— Savings found in fiscal year 2023.
$2 billion
— The fiscal cliff in fiscal year 2026.
New York City faces a potential $9 billion fiscal disaster by 2026 due to a combination of budget gaps, employee raises, and fiscal cliffs. To avoid this, the city must prioritize saving for future recessions, address nonrecurring funding sources, and improve operational efficiency to manage costs.
Recommendations related to City Spending Trends
The mayor and council must resist the temptation to use additional tax revenue to expand services, instead depositing these funds into the Rainy Day Fund and the city’s labor reserve.
The city should schedule $500 million annual deposits to the Rainy Day Fund, which could be sourced from the budgeted General and Capital Stabilization Reserves.
The executive budget should address the budget’s fiscal cliffs where ongoing programs are currently funded with nonrecurring city and federal COVID-19 funds.
The city must lower costs 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 the 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 total recipe for fiscal disaster by 2026, comprising a $3 billion budget gap, $4 billion in employee raises, and a $2 billion fiscal cliff.
$17 billion
— The potential three-year revenue shortfall if the city experiences another recession.
$1.5 billion
— The estimated annual savings if the city implemented a 3% Program to Eliminate the Gap for Productivity.
$4.3 billion
— The cost of 3% annual raises for city employees by the third year.
$900 million
— The total value of fiscal cliffs next year where ongoing programs are funded with nonrecurring COVID-19 funds.
$2 billion
— The value of fiscal cliffs by fiscal year 2026.
New York City's Program to Eliminate the Gap (PEG) has primarily relied on re-estimates and vacancy reductions rather than operational efficiencies to achieve budget savings. To improve long-term fiscal stability, the City should implement a productivity-focused program targeting 3 percent of City-funded agency spending through management reforms and streamlined operations.
Recommendations related to City Spending Trends
The Mayor’s Office of Management and Budget (OMB) 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 analytic work should start immediately, and the total or selected productivity improvements should be part of the Executive Budget due in late April.
Agencies should identify management reforms that reduce unit costs, streamline operations, and leverage technology.
The City also should identify and implement efficiencies in centrally managed services like space leasing and fleet, which should provide additional savings.
To increase the City’s long-run fiscal stability, PEGs should generate recurring savings that reduce baseline spending, not just reductions in one or two years.
Key Data
$1.5 billion
— The amount of City-funded agency spending the City should target for savings in fiscal year 2023.
$1.6 billion
— The amount of City-funded agency spending the City should target for savings by fiscal year 2026.
6.2 percent
— The portion of cumulative five-year savings that came from increased efficiency.
61.6 percent
— The portion of savings that came from re-estimates of planned spending and shifting support for services from City funds to other sources.
24.1 percent
— The portion of savings that came from the elimination of vacant positions.
7,026
— The number of full-time positions eliminated across 42 agencies through the PEG's vacancy reductions.
The proposed public subsidy for a new Buffalo Bills stadium, which could exceed $1 billion, lacks a rigorous analysis demonstrating that public benefits will outweigh the costs. Any such investment should be justified by transparent, incremental economic impact assessments and include provisions for private investment and clawbacks.
Recommendations related to City Spending Trends
All economic development spending, whether direct, through tax incentives, or through reduced utility or other costs, should be justified by a rigorous analysis that shows that the public benefits that would accrue will exceed the public’s costs.
As part of shaping any policy to publicly subsidize a capital investment, these impacts and their level should be quantified.
The State should transparently provide an analysis that identifies the benefits and full costs for any proposed subsidy.
The analysis should credibly identify the incremental economic and fiscal impacts attributable to a proposed subsidy and use them in conjunction with the length of time the subsidy would provide benefit to calculate a proposed subsidy’s value.
Any subsidy should be after private investment and include clawback provisions.
Key Data
$1 billion
— Potential public funding sought for a new stadium.
$862 million
— Estimated cost to renovate the existing Highmark Stadium.
$1.4 billion
— Low-end estimate for the cost of a new stadium.
$1.7 billion
— High-end estimate for the cost of a new stadium.
$350 million
— Additional cost for a stadium located in downtown Buffalo.
$385.8 million
— Estimated annual economic output of the Buffalo Bills.
The New York City Police Department's fiscal year 2023 budget is projected to reach $10.8 billion, with significant reliance on federal aid to offset city-funded operating costs. Despite efforts to reduce spending, the department faces likely overtime budget overruns of over $200 million for fiscal year 2022, necessitating stricter managerial controls.
Recommendations related to City Spending Trends
Significant managerial controls will be necessary to keep uniformed overtime closer to budgeted levels this year and next.
Key Data
$10.8 billion
— Projected fiscal year 2023 NYPD budget including operating budget and central expenses.
$200 million
— Likely amount by which the NYPD will exceed its fiscal year 2022 overtime budget.
$742 million
— Projected fiscal year 2022 overtime spending at the current rate.
$434 million
— Amount allocated for overtime in the fiscal year 2023 budget.
$533 million
— Reduction in the City-funded portion of the fiscal year 2022 operating budget.
35,030
— Authorized uniformed headcount maintained throughout the financial plan.
The New York City Police Department's fiscal year 2023 budget is projected to total $10.8 billion, which is $83 million less than the previous year, though the department relies on a one-time $500 million federal aid swap to maintain service levels. Additionally, uniformed overtime spending is projected to reach $742 million, significantly exceeding the budgeted amount and requiring stricter managerial controls to manage costs.
Recommendations related to City Spending Trends
Significant managerial controls will be necessary to keep uniformed overtime closer to budgeted levels this year and next.
Key Data
$10.8 Billion
— Projected total NYPD spending for fiscal year 2023.
$742 Million
— Projected fiscal year 2022 uniformed overtime spending if current rates continue.
$500 Million
— Amount of federal American Rescue Plan funds used to replace City funds in the fiscal year 2022 operating budget.
$258 Million
— Potential amount by which fiscal year 2022 overtime spending could exceed its budget.
$113 Million
— Savings yielded by the Program to Eliminate the Gap (PEG) for the NYPD in fiscal year 2022.
$34.6 Million
— Annual savings starting in fiscal year 2023 from eliminating 560 vacant school safety positions.
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 balance its budget. To achieve long-term sustainability, the authority must implement structural reforms, including the approval of the Preservation Trust and significant improvements in labor productivity to align expenses with industry standards.
Recommendations related to City Spending Trends
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 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.
Key Data
$2.7 billion
— Public housing operating expenses in the 2022 adopted budget.
$1,300
— Monthly operating cost per unit projected for 2022.
$1.2 billion
— Operating funds spent since 2018 on various action plans mandated under the HUD settlement agreement.
$359 million
— Operating funds spent on HUD-mandated action plans in 2021 alone.
$276 million
— Expected City subsidy for NYCHA in 2022.
$119 million
— Amount by which rental income fell below expectations in 2021 due to a falling collection rate.
The New York City Fiscal Year 2023 Preliminary Budget includes a Program to Eliminate the Gap that yields $866 million in savings this year, yet the city faces significant fiscal cliffs of up to $3.0 billion by 2026. To ensure long-term stability, the city must address these gaps, manage federal funding expirations, and commit to annual deposits of at least $500 million into the Rainy Day Fund.
Recommendations related to City Spending Trends
The Administration should review federal COVID-related spending to ensure resources strategically support the City’s recovery without creating unsustainably-funded programs.
The Administration should identify additional agency and central function efficiency savings to include in the Executive Budget.
It is critically important that the Administration work with its municipal unions to identify and implement efficiency savings and rationalize benefit levels and administration during collective bargaining negotiations.
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.
$1.1 billion
— Annually recurring savings in fiscal year 2023 and beyond from the Program to Eliminate the Gap.
$653 million
— The fiscal year 2023 fiscal cliff caused by programs only funded for fiscal year 2022.
$3.0 billion
— The projected budget gap in fiscal year 2026.
$1.3 billion
— Amount of programs funded with federal monies that will dry up in fiscal year 2026.
$500 million
— Recommended annual deposit to the Rainy Day Fund to help the City weather future recessions.
New York City can achieve significant efficiency savings by modernizing labor contracts, streamlining procurement processes, and better managing city-owned space and fleets. Implementing these management reforms and productivity targets would allow the city to reduce costs and improve service quality without cutting direct services or laying off staff.
Recommendations related to City Spending Trends
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 consolidate the roughly 75 separate union welfare funds to save $160 million annually through administrative efficiencies and greater purchasing power.
The city and unions should modify some of the Citywide Agreement provisions for work hours, vacation and sick leave, overtime, and other benefits common across nonuniformed collective bargaining units.
The next round of collective bargaining should set a productivity savings target for all bargaining units.
The city should lengthen sanitation routes so that trucks are full when they tip, which could save more than $120 million annually.
The city should time-limit the Absent Teacher Reserve, giving employees an appropriate opportunity and incentive to find new positions within the department.
Key Data
$1.3 billion
— Amount spent by the city to lease space in fiscal 2021.
72%
— Increase in city spending to lease space in fiscal 2021 compared to fiscal 2014.
$160 million
— Potential annual savings from consolidating the roughly 75 separate union welfare funds.
$675 million
— Potential annual savings if city employees shared premium costs slightly below the level of state employees.
$120 million
— Potential annual savings from lengthening sanitation routes so that trucks are full when they tip.
$53.6 billion
— Portion of the city's budget that funds wages, health insurance, and pensions.
New York City expects to receive over $22 billion in federal COVID-19 aid through fiscal year 2025, yet current reporting mechanisms fail to provide the transparency and performance metrics necessary for effective management and public accountability. To maximize the impact of these resources, the City should establish a robust, comprehensive public tracker and implement a citywide performance management system to monitor program outcomes and hold managers accountable.
Recommendations related to City Spending Trends
The City should create a robust public tracker to support diligent management, ensure funds have maximum impact, and allow the public to hold government accountable.
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 to develop the overall framework and metrics for each subject area.
The tracker should include appropriate funding streams, identify the programs being funded, and include performance goals and metrics for program inputs, outputs, outcomes, quality, and efficiency.
The tracker should be built and maintained by government, based on consultation with nonprofit and private organizations and fiscal oversight entities.
Key Data
$22 billion
— 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
— Priority funding amount for the American Rescue Plan State and Local Recovery Funds.
$7.0 billion
— Priority funding amount for Education Stabilization Funds from the American Rescue Plan and the Coronavirus Response and Relief Supplemental Appropriations Act.
$700 million
— Expected American Rescue Plan State and Local Recovery funds not currently reflected in the November 2021 financial plan.
$251 million
— Funding directed by the City to special education, including afterschool and Saturday programs.
New York City faces significant fiscal challenges, including annual budget gaps that are $750 million higher than reported due to illusionary savings and a looming federal fiscal cliff of up to $4 billion starting in fiscal year 2025. To ensure long-term sustainability, the incoming administration must restructure the budget, implement a 3 percent to 5 percent Program to Eliminate the Gap, and leverage collective bargaining to improve productivity.
Recommendations related to City Spending Trends
Mayor-elect Adams should actively manage the projected 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.
The incoming administration should support a 3 percent to 5 percent Program to Eliminate the Gap (PEG) 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.
Key Data
$2.9 billion
— budget gap projected for the next year
$2.7 billion
— budget gap projected for fiscal year 2024
$2.1 billion
— budget gap projected for fiscal year 2025
$750 million
— amount by which budget gaps are higher annually due to illusionary labor and attrition savings
$1.3 billion to $4 billion
— annual federal fiscal cliff starting in fiscal year 2025 with the depletion of federal COVID-aid
$500 million
— commitment to a deposit to the Rainy Day Fund in fiscal year 2022
New York City faces annual budget gaps of $5 billion and must manage $13 billion in federal COVID aid while ensuring core services are delivered efficiently. To achieve fiscal stability, the administration should implement a 3-5% savings program, reform property taxes, and align budget and workforce levels with existing tax revenues.
Recommendations related to City Spending Trends
The administration should make public detailed data on federal COVID revenues, expenditures and program activities and outcomes to ensure the $13 billion in aid has impact.
The city should bring the budget and workforce to levels supported by the city’s already high taxes to avoid fiscal instability.
The administration should bring health benefit costs to sustainable levels by implementing reasonable employee premium-sharing similar to state employees.
The administration should implement a 3-5% savings Program to Eliminate the Gap (PEG) that leverages technology and redesigns operations to improve efficiency.
The administration should reform the property tax and utilize performance-based, targeted economic development incentives to grow jobs and housing.
Key Data
$13 billion
— The amount of COVID federal aid that the administration should ensure has impact through transparent reporting.
$5 billion
— The size of the annual budget gaps the city faces starting next year.
3-5%
— The target range for the savings Program to Eliminate the Gap (PEG) that the administration should implement.
New York City faces significant long-term fiscal challenges, including annual budget gaps estimated between $3.9 billion and $4.8 billion and a $122 billion long-term liability for retiree health benefits. To ensure stability, the incoming administration must prioritize sustainable spending, reform labor contracts, and implement rigorous performance management across city agencies.
Recommendations related to City Spending Trends
The City should spread federal aid over multiple years to provide time to restructure spending to be sustainably supported with recurring revenues.
The City should enact a local law to limit withdrawals to a recession or severe emergency, both of which should be legally defined.
The City should bring health and welfare benefit costs to sustainable levels, which requires negotiating changes with municipal labor unions.
The City should critically assess how resources—including federal aid for school reopening—are allocated across schools to maximize student achievement and reduce educational disparities.
DSNY should work with labor to change work rules to optimize collection routes, increase flexibility in collection frequency to align with the amount of waste to be collected, and modernize labor differential payments to incentivize higher productivity under current collection procedures.
The City should explore volume-based fees, which have been successful in reducing waste generation and increasing recycling in other cities by making the cost of refuse disposal clearly visible to residents.
The City should benchmark H+H’s unit costs and revenue recovery ratios against nonprofit safety net providers in the city to improve H+H’s efficiency and guide the City subsidy level.
The incoming Administration should finalize a property tax reform proposal, build a supporting coalition, develop legislative language in cooperation with State legislature, advocate for passage, and implement the reforms.
The incoming Administration should increase transparency by publishing a comprehensive database of economic development incentives, including benefits paid, jobs created, and economic impact.
The incoming Administration should deposit funds regularly into the Rainy-Day Fund and improve its legal framework.
Key Data
$3.9 billion and $4.1 billion
— Estimated annual budget gaps beginning in fiscal year 2023.
$122 billion
— City long-term fiscal liability for other postemployment benefits (OPEB).
$7.2 billion
— Total annual cost of City employee and retiree health benefits.
$21.1 billion
— COVID-related federal aid expected from fiscal year 2020 through fiscal year 2025.
$40 billion
— Capital needs at the New York City Housing Authority (NYCHA).
$2 billion
— Annual City subsidies for Health + Hospitals (H+H).
The New York City Police Department's budget experienced a $322 million cut in fiscal year 2021, but is set to increase by $465 million in fiscal year 2022. Additionally, the department struggled to control overtime costs, spending $474 million, while also undergoing various administrative transfers of units like school safety and homeless services.
Key Data
$322 million
— The actual fiscal year 2021 budget cut to NYPD’s City-funded expenditures.
$474 million
— Fiscal year 2021 overtime expenditures.
$465 million
— The spending increase in the Adopted Budget for fiscal year 2022 against fiscal year 2021.
$4.5 million
— The amount transferred from the NYPD to the Department of Homeless Services for the Homeless Unit in fiscal year 2021.
$9.5 million
— The amount transferred from the NYPD to the Mayor’s Office of Criminal Justice for the Crime Victim Assistance Program in fiscal year 2021.
$42.4 million
— The amount associated with the transfer of School Crossing Guards from the NYPD to the Department of Transportation in fiscal year 2021.
$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 reported fiscal year 2022 budget of $98.7 billion obscures the true spending obligation, which is actually $103.3 billion when accounting for prepayments and other adjustments. This discrepancy of $4.6 billion highlights how routine fiscal management tools like prepaying bills can distort the city's actual spending trends over time.
Key Data
$98.7 billion
— Reported expenditures for fiscal year 2022 in the Adopted Budget Financial Plan.
$103.3 billion
— Actual fiscal year 2022 expenditure obligation after accounting for adjustments.
$4.6 billion
— Difference between the reported budget and the actual expenditure obligation.
$6.1 billion
— Fiscal year 2022 obligations that were prepaid in fiscal year 2021.
$500 million
— Deposit to the Rainy Day Fund, which is a saving account rather than spending.
$300 million
— Amount in the General Reserve, a budgeted contingency fund.
The New York City Fiscal Year 2022 Adopted Budget utilizes federal aid to fund recurring programs, creating a future fiscal cliff, while failing to implement necessary agency efficiency measures. The city faces annual budget gaps of approximately $5 billion through fiscal year 2025, exacerbated by the reliance on unspecified labor savings and the lack of a long-term strategy for fiscal stability.
Recommendations related to City Spending Trends
The City should enact legislation that sets minimum mandatory deposits into the Rainy Day Fund to reach the estimated $11 billion goal.
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 needs to address the looming fiscal cliff created by using federal funds for recurring programs.
The City should negotiate the next round of collective bargaining agreements without creating greater fiscal stress.
Key Data
$500 million
— Initial deposit made into the 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
— Annual amount of federal aid used to fund recurring programs, creating a fiscal cliff.
$5 billion
— Annual budget gaps projected for fiscal year 2023 to fiscal year 2025.
$1 billion
— Annual unspecified labor savings included in the budget gaps.
$4.0 billion
— Cumulative fiscal year 2021 and 2022 savings reported in the Adopted Budget.
New York City's proposed $98 billion budget relies on a $6 billion infusion of federal aid, which business and civic leaders argue should be used for strategic recovery rather than expanding long-term payroll commitments. They urge the city to fund ongoing priorities like Universal Pre-K through sustainable tax revenues instead of temporary grants to ensure long-term fiscal stability.
Recommendations related to City Spending Trends
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 (ARP) 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 reconsider federal funding allocations and adopt a process for greater transparency and consultation with affected industries.
Key Data
$6 billion
— Amount of flexible federal aid available to New York City for recovery efforts.
$98 billion
— Total value of the proposed Executive Budget that leaders argue must be amended.
500,000
— Number of lost private sector jobs that federal aid should be focused on restoring.
New York City's police department budget is projected to reach $10.5 billion in fiscal year 2022, representing a $728 million increase from the previous year's plan. Despite efforts to reduce spending, overtime costs have consistently exceeded budgets, and future labor contract negotiations threaten to further increase expenditures.
Recommendations related to City Spending Trends
The City must exercise diligent management of overtime spending to ensure fiscal year 2022 expenditures remain within the budgeted $434 million.
Policymakers should prepare for additional resource requirements in the NYPD budget if future collective bargaining agreements result in raises exceeding the current one percent funding level.
The City needs to account for the full cost of salary increases for expired and future collective bargaining agreements, which are not currently reflected in the NYPD budget.
Key Data
$10.5 billion
— FY2022 City funding allocated to the NYPD.
$728 million
— The increase in City funding for the NYPD in fiscal year 2022 compared to the fiscal year 2021 budget.
$448 million
— Projected total fiscal year 2021 overtime spending.
$434 million
— The budgeted amount for overtime in fiscal year 2022.
$418 million
— Amount spent on overtime through June 10, 2021.
$268 million
— The adopted fiscal year 2021 overtime budget.
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…
New York City's goal of achieving zero waste by 2030 requires a shift toward more efficient sanitation services, including the implementation of a volume-based fee for refuse collection to incentivize waste reduction. By optimizing collection routes and adopting targeted programs like in-sink food disposal and expanded drop-off sites, the city could generate significant annual savings while improving overall operational productivity.
Recommendations related to City Spending Trends
The City should implement a volume-based fee to increase service cost visibility and reduce waste generation.
The City should expand the use of organics drop-off sites in locations central to communities such as subway stops to help increase organics disposal achieve economies of scale.
The City should incentivize, if feasible and cost-effective, on-site anaerobic digesters in large residential buildings.
The City should encourage the use of in-sink food disposal where feasible for DEP wastewater treatment plants, lessening the need for costly curbside collection.
The City should build on its textile recycling program, either through expanded drop-off locations or by partnering with private haulers to expand textiles collection programs.
The City should pursue actions that increase the efficiency of sanitation services, such as regularly revising collection routes with the help of GPS technology and routing software to optimize route capacities.
The City should shift away from the “one size fits all approach” to residential waste services by changing the number of collection days in districts where appropriate.
Key Data
$110 million
— Annual savings for the City from lower waste volumes resulting from a volume-based fee.
$41 million
— Annual cost to the City to cover higher DEP operating costs and the price of purchase and installation of in-sink units.
$250 million
— Annual savings from a volume-based fee when coupled with productivity savings.
$140 million
— Estimated annual bag fee revenues which could be rebated to help address financial inequities or help cover the costs of running the program.
9.3 tons
— Refuse tons collected per truck shift in fiscal year 2020, an all-time low.
5.8 tons
— Recycling collection productivity in fiscal year 2020.
Offering early retirement incentives to city workers is a fiscally irresponsible strategy that costs roughly $110,000 per participant, especially when natural attrition and strategic hiring can achieve workforce reductions for free. Instead of paying employees to leave, the city should manage its workforce size through selective vacancy refilling and prudent financial planning to ensure long-term stability.
Recommendations related to City Spending Trends
The city should flatly reject the opportunity to offer early retirement incentives to civilian employees.
The city should shrink its workforce by selectively refilling vacancies created by departed employees rather than paying staff to leave.
The city should strategically hire to meet service needs and phase in organizational changes to reach a target workforce size of around 310,000.
The city should avoid a rehiring spree despite the fiscal relief provided by federal fund infusions.
The city should manage services, finances, federal money, and the government workforce well to ensure future stability.
Key Data
$110,000
— Average cost to the city for every person who takes the early retirement incentive.
$110 million
— Total cost for every 1,000 employees taking the incentive, spread over 4 years.
312,250
— Total number of full-time and full-time equivalent city employees in February 2021.
$250 million
— Estimated cost the city would incur to achieve a 2,250 position reduction through early retirement.
$5 billion
— Amount of additional federal aid the city is guaranteed to receive.
14,860
— Number of positions the city workforce was reduced by due to the partial hiring freeze.
New York City faces multi-billion dollar budget gaps and relies heavily on short-term strategies rather than long-term structural solutions to address its fiscal challenges. The city should use federal aid prudently to support essential services and achieve long-term fiscal stability through recurring savings and efficiency improvements rather than funding new, ongoing programs.
Recommendations related to City Spending Trends
The Executive Financial Plan should include a plan for prudent use of federal resources over multiple years, coupled with a commitment to innovative improvements across City government to increase efficiency and cost-effectiveness.
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.
Successfully negotiating work rule changes with the City’s municipal unions and rationalizing employee benefits could yield substantial recurring savings exceeding $1 billion per year.
The Executive Budget for Fiscal Year 2022 and ensuing negotiations between the Council and Mayor should prioritize judicious use of the new resources over two to three years to support a long-term plan for fiscal stability and effective government.
Key Data
$5 billion
— Annual budget gaps projected for fiscal year 2023 and beyond.
$5.6 billion
— Estimated direct federal aid from the American Rescue Plan Act of 2021.
$1.15 billion
— Additional FEMA reimbursement expected for COVID-19 related expenditures.
$71 billion
— Loss in market value of commercial and residential property for fiscal year 2022.
$640 million
— Amount by which personal income tax and business taxes performed ahead of the plan.
$1 billion
— Unspecified recurring annual labor savings added to the financial plan in June 2020.
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 New York City Housing Authority faces a precarious financial future, with a $25 million deficit projected for 2021 and total repair needs exceeding $40 billion. This fiscal instability is exacerbated by a declining rent collection rate, which fell to 82 percent by November 2020, and a growing backlog of over 483,000 outstanding work orders.
Key Data
$40 billion
— The total repair needs for the New York City Housing Authority, a figure that the agency and the City cannot fund on their own.
$2.8 billion
— The estimated cost over 20 years to remediate and ultimately abate properties with lead paint.
483,000
— The number of outstanding work orders in December 2020, representing a 40 percent increase from the previous year.
$25 million
— The projected deficit in the 2021 budget as the agency manages pandemic effects and federal monitorship requirements.
82 percent
— The rent collection rate as of November 2020, which has declined steadily since 2016.
New York City's fiscal year 2022 preliminary budget includes a 3.2 percent increase in city-funded spending, while facing a fiscal year 2023 budget gap of $4.3 billion that is likely understated by $1 billion in unrealized labor savings. To address these long-term financial risks, the city must implement structural spending reforms, including permanent headcount reductions and modifications to employee benefits and work rules.
Recommendations related to City Spending Trends
The City should improve productivity or modify employee benefits to minimize pain to New Yorkers at large.
The City should make headcount reductions permanent.
The City should take aggressive steps to rein in spending by increasing efficiency.
The City should prioritize programs for the most vulnerable.
The City should collaborate with labor to change costly work rules and reduce the cost of benefits for City workers.
Key Data
3.2 percent
— City-funded spending increase between fiscal year 2021 and fiscal year 2022.
$4.3 billion
— Fiscal year 2023 budget gap.
$1 billion
— Amount of labor savings by which the fiscal year 2023 gap is likely understated.
The New York City Housing Authority faces immense capital needs and rising operating costs that require innovative strategies like the proposed Public Housing Preservation Trust to preserve 110,000 units of affordable housing. To ensure effectiveness, this new entity must avoid restrictive mandates that limit flexibility and instead prioritize cost-effective management, financial transparency, and accountability.
Recommendations related to City Spending Trends
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 to ensure adequate financial transparency and accountability.
The Trust should avoid importing current operating practices and policies wholesale if they limit flexibility and efficiency.
The Trust should be exempt from provisions like Wicks Law and the Scaffold Law, which have been demonstrated to increase the cost and complexity of public projects.
Key Data
110,000
— Number of units of deeply affordable housing that the Public Housing Preservation Trust aims to preserve.
New York City faces a $3.8 billion budget gap for fiscal year 2022, yet the current financial plan relies on non-recurring debt service savings and unachieved labor savings rather than structural reforms. To ensure long-term stability, the city must implement recurring savings, reduce headcount through attrition, and align employee benefit contributions with other public agencies.
Recommendations related to City Spending Trends
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.
Spending should be restrained to a level that is sustainable when the economy recovers and federal aid is depleted.
Key Data
60 percent
— of the annual savings in the November 2020 Financial Plan's Savings Program do not recur.
0.35 percent
— of City-funded spending is 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 COVID-19 pandemic significantly impacted New York City's public services, leading to reduced capital expenditures, altered service delivery, and increased demand for social and business support. The crisis highlighted the necessity for more robust performance metrics and flexible resource allocation to effectively manage city operations.
Recommendations related to City Spending Trends
The City should orient the structure of the Fire Department and its allocation of resources away from firefighting toward medical response.
The City needs robust performance metrics to foster a better understanding of City services.
The City should prioritize resident feedback surveys to collect high-quality data on key quality of life indicators.
The Department of Sanitation should make routing and work rules sufficiently flexible to allow for the quick redeployment of resources.
Key Data
$1.5 billion
— Capital expenditures in the fourth quarter of fiscal year 2020, which were the lowest in a decade.
61 percent
— Increase in the value of financial assistance provided to businesses by the Department of Small Business Services.
30 percent
— Portion of the Fire Department’s budget allocated to firefighting rather than emergency medical services.
50 percent
— Drop in capital commitments for Housing New York projects between fiscal year 2019 and fiscal year 2020.
9.3 tons
— Low reached for tons of refuse collected per truck shift by the Department of Sanitation in fiscal year 2020.
25 percent
— Increase in the number of segment 1 medical incidents handled by Emergency Medical Services.
New York City's fiscal year 2021 budget reflects a projected $838 million decline in agency operations spending, though the city-funded workforce is expected to grow by 1,104 positions. To address budgetary risks and a $4.2 billion gap in fiscal year 2022, the city must implement additional savings programs that secure recurring reductions while maintaining critical services.
Recommendations related to City Spending Trends
The City will likely need to implement additional savings programs in fiscal year 2021, as well as to identify savings to close the $4.2 billion gap in fiscal year 2022.
The next round of cuts should aim to secure recurring savings, provide critical services to those most in need, and maintain the City’s competitiveness.
Key Data
$838 million
— The projected decline in agency operations spending for fiscal year 2021.
$4.2 billion
— The projected budget gap for fiscal year 2022 that requires additional savings.
$1.5 billion
— The total year-over-year spending decline projected across 28 city agencies.
$652 million
— The total year-over-year spending increase projected across 48 city agencies.
$345 million
— The amount of the budget cut for the New York Police Department.
$266 million
— The projected increase in the city's subsidy to New York City Health and Hospitals.
New York City faces a fiscal crisis where borrowing or layoffs are presented as options, but alternative strategies like agency efficiency, attrition, and labor-management health insurance reforms can avoid these outcomes. The current budget is $2 billion higher than 2018 spending levels, necessitating a multiyear fiscal stability plan and oversight by the Financial Control Board to avoid the pitfalls of debt-financed operations.
Recommendations related to City Spending Trends
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.
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
$1 billion
— The amount of labor savings committed to in the budget that have not yet been identified.
7,000
— The number of employees the city could reduce annually through a stricter hiring freeze.
$2 billion
— The amount by which the current city budget, adjusted for inflation, exceeds spending in 2018.
14,000
— The number of additional workers the city has compared to the highest point before the last recession.
$5 billion
— The amount the city would borrow in a hypothetical scenario.
$7 billion
— The amount the city would have to repay if it borrowed $5 billion.
New York City faces a significant fiscal crisis, requiring $1 billion in recurring labor savings to avoid widespread layoffs. The city can achieve these savings by modernizing employee benefits, such as implementing health insurance premium sharing, and reforming work rules, including overtime caps and staffing models.
Recommendations related to City Spending Trends
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 extend overtime caps to skilled trades and uniformed employees to reduce excessive overtime costs.
The City should seek State legislation to eliminate Variable Supplement Funds (VSFs) and transfer those assets to the main pension funds.
The City 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 standardize work hours to a forty-hour work week for all employees to facilitate workforce reduction and associated savings.
The City should reform or eliminate the Tax-Deferred Annuity (TDA) by reducing the guaranteed return on the fixed return fund.
The City should standardize four firefighters per engine company to align staffing with standard operating procedures.
The City should reform productivity differentials for sanitation workers to ensure payments are only made for measurable improvements in cost-effectiveness.
Key Data
$1 billion
— The recurring savings target from labor negotiations required in the Adopted Budget for Fiscal Year 2021.
$1.2 billion
— The estimated annual value of the taxpayer-provided guarantee for the Tax-Deferred Annuity (TDA) program.
$1.1 billion
— The total cost of uniformed overtime in fiscal year 2019.
$105 billion
— The estimated long-term liability for New York City's retiree health and welfare benefits.
$50.2 billion
— The projected personnel costs for fiscal year 2021 out of the $93.5 billion total budget.
The NYPD's fiscal year 2021 budget was reduced by $474 million compared to the Executive Budget, with the majority of savings coming from an unrealistic $354 million cut to overtime expenses. While the department's operating budget decreased by $345 million, or 6.6 percent, the recurring savings are limited to $82 million, largely achieved through headcount reductions like freezing hiring and cancelling the police academy class.
Recommendations related to City Spending Trends
Overtime reforms would need to be far-reaching and potentially negotiated with labor unions to achieve the steep reduction currently budgeted.
The city must implement a plan or operational strategy to accompany overtime reductions, as prior efforts have been more successful in slowing growth rather than decreasing expenses.
Key Data
$474 million
— Total reduction in the NYPD's City-funded budget in the Adopted Budget compared to the Executive Budget for Fiscal Year 2021.
$354 million
— Reduction in overtime expenses, which accounts for 75 percent of the total budget reduction.
$345 million
— Decrease in the NYPD's operating budget from fiscal year 2020 to fiscal year 2021.
6.6 percent
— Percentage decrease in the NYPD's operating budget from fiscal year 2020 to fiscal year 2021.
$82 million
— Recurring annual reduction to the operating budget, mainly from reductions in hiring.
1,404 positions
— Total reduction in the NYPD workforce, including 1,171 uniformed and 233 civilian positions, in fiscal year 2021.
The City adopted an $88.2 billion budget for fiscal year 2021, closing large gaps through a combination of reserves, federal aid, and expenditure reductions. However, the budget relies on optimistic assumptions and lacks sufficient recurring savings, leaving the City vulnerable to future fiscal risks and potential outyear deficits.
Recommendations related to City Spending Trends
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 not turn to long-term borrowing to address an imbalance in revenues and expenditures, as borrowing should be a last resort.
Labor savings should be a part of the City’s budget balancing efforts to help close the fiscal gap.
Shrinking the workforce through attrition is both possible and preferable to layoffs.
Key Data
$88.2 billion
— The total budget adopted by the City for fiscal year 2021.
$10.4 billion
— The budget gap opened in fiscal years 2020 and 2021 due to tax revenue shortfalls and decreased state aid.
$1 billion
— The recurring savings target to be negotiated with the City’s municipal labor unions.
22,000
— The number of municipal workers the City stated it would lay off if the $1 billion labor savings target is not met.
$1.9 billion
— The total federal aid used to close budget gaps in fiscal years 2020 and 2021.
$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.
New York City adopted an $88.2 billion budget for fiscal year 2021, with adjusted city-funded spending remaining essentially flat despite the economic crisis. Maintaining this spending level depends on achieving $1 billion in labor savings and implementing $350 million in police overtime reductions.
Recommendations related to City Spending Trends
The City should utilize attrition, increased productivity, and negotiated fringe benefit changes to achieve necessary budget savings without resorting to layoffs.
The City must negotiate and manage the changes necessary to achieve the assumed savings to successfully implement the adopted budget.
Key Data
$88.2 billion
— Total budget adopted by New York City leaders for fiscal year 2021.
$1 billion
— Recurring savings the City must successfully 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 starting in October if the savings target is not reached.
0.1 percent
— Growth rate of adjusted city-funded spending in fiscal year 2021.
$2 billion
— Amount by which inflation-adjusted city-funded spending in fiscal year 2021 will exceed fiscal year 2018 levels.
The fiscal year 2021 budget for New York City relies on questionable savings and optimistic assumptions, failing to address long-term fiscal gaps. To avoid future service reductions and layoffs, the city must implement recurring efficiency savings and aggressive attrition rather than relying on one-year spending reductions.
Recommendations related to City Spending Trends
City leaders should 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 placing residents, businesses, and employees at risk of drastic service reductions and layoffs.
Key Data
$300 million
— The amount by which the city aims to reduce police overtime, which is considered highly unlikely given the weak history of overtime management.
$1 billion
— The amount of unspecified savings the city expects to produce from working with municipal labor unions, for which details are currently lacking.
New York City's total spending on the police department reached $10.9 billion in fiscal year 2020, with centrally allocated costs like pensions and benefits accounting for nearly half of that total. Since fiscal year 2010, the department's operating budget has grown by $1.2 billion, while total city spending on the agency increased by $2.8 billion.
Key Data
$10.9 billion
— Total expenses for the New York City Police Department in fiscal year 2020.
$2.8 billion
— Total increase in City spending on the NYPD between fiscal years 2010 and 2020.
$1.2 billion
— Growth of the NYPD's operating budget from fiscal year 2010 to 2020.
$635 million
— Overtime spending at the NYPD in fiscal year 2020.
$96,072
— Average total pay for a full-time NYPD employee in fiscal year 2019.
3,288
— Increase in NYPD headcount from fiscal year 2010 to 2020.
New York City faces multi-billion dollar budget gaps due to the COVID-19 pandemic, necessitating a combination of expenditure reductions, workforce attrition, and temporary tax increases to maintain fiscal stability. These measures aim to avoid long-term borrowing and damaging service cuts while preserving the city's long-term competitiveness and intergenerational equity.
Recommendations related to City Spending Trends
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.
Implementing a health insurance premium-sharing arrangement would provide significant recurring savings while ensuring the City continues to provide attractive benefits.
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.
The five-year capital plan could be reduced by $2.4 billion through operational strategies to reduce planned new school construction and by $4.3 billion by delaying and limiting expansion projects.
CBC recommends expenditure reductions equal to $1.6 billion in fiscal year 2021, $2.3 billion in fiscal year 2022, $2.9 billion in fiscal year 2023, and $2.9 billion in fiscal year 2024.
Key Data
$5.0 billion, $4.5 billion, and $4.9 billion
— Projected budget gaps for fiscal years 2022, 2023, and 2024, respectively.
$1.5 billion
— Reductions to the fiscal year 2021 tax revenue forecast identified in the annual revenue letter.
$134 million
— Reductions to non-tax City revenues, mainly from fines and forfeitures.
$6.9 billion
— Expected fiscal year 2021 tax revenues, which is 11 percent less than the Preliminary Budget forecast.
$259 million
— Required increase in pension contributions in fiscal year 2022 if investment returns fall short by 10 percent.
$1.7 billion
— Savings provided in fiscal year 2021 by the recommended strategies to close budget gaps.
The proposed legislation to create a Rainy Day Fund for New York City lacks necessary safeguards, potentially allowing it to function as a slush fund rather than a true reserve for economic downturns. To ensure fiscal responsibility, the fund's usage should be strictly limited by law to periods of genuine economic recession or severe emergency, rather than being accessible at the discretion of city officials.
Recommendations related to City Spending Trends
Any withdrawal should be limited only to times of economic recession or severe emergency, which should be defined in law.
Define a recession as two successive quarters of economic contraction as indicated by declines in real gross city product or employment.
Specify that a severe emergency should be accompanied by revenue losses or increased expenditures of at least one percent of city-funded spending.
Negotiate a chapter amendment with the 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
1%
— The minimum threshold of revenue losses or increased expenditures required to define a severe emergency.
2
— The number of successive quarters of economic contraction required to define a recession.
50%
— The portion of the Rainy Day Fund balance that the bill currently allows to be withdrawn to balance the budget.
The Economic Development Corporation has faced significant financial strain due to rising operating expenses, particularly from the NYC Ferry system, which led to an operating loss in 2019. To address these fiscal pressures and balance budgets during the pandemic, the agency must continue to identify efficiencies, such as modifying ferry fare policies and delaying costly expansions.
Recommendations related to City Spending Trends
All agencies should scrutinize their operations to find efficiencies and redesign or eliminate programs that are not cost-effective.
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 Economic Development Corporation could generate additional recurring savings by modifying the ferry system’s fare policy and planned expansions.
The Economic Development Corporation should charge higher fares on weekends and for noncommuters and not run or expand routes to Coney Island and Ferry Point that will require extraordinarily high subsidies.
Key Data
$130 million
— Average annual operating surplus between 2012 and 2014
$382.7 million
— Operating revenue in 2019
$384.2 million
— Operating expenses in 2019
$1.8 million
— Operating loss in 2019
$53 million
— Amount spent to subsidize NYC Ferry in 2019
New York faces acute fiscal stress due to the COVID-19 pandemic, requiring governments to balance budgets through options like using reserves, reducing expenditures, increasing taxes, selling assets, or borrowing. These choices must prioritize minimizing harm to vulnerable residents while maintaining the jurisdiction's long-term economic competitiveness and adhering to the principle of intergenerational equity.
Recommendations related to City Spending Trends
Governments should use no more than two-thirds of any rainy day fund in the first year of an economic crisis.
New York should reverse, rather than accelerate, its large financing role for local Medicaid costs because it is highly inequitable.
Public officials should align state and local government employees’ compensation with that of the private sector to enhance the jurisdiction's attractiveness and keep taxes at competitive levels.
Governments should minimize the negative impacts of capital budget cuts by targeting projects that are not for essential infrastructure or are desirable expansions that can be safely postponed.
Governments should use proceeds from asset sales to create equivalent value on the balance sheet by funding capital investments or maintaining reserves rather than using them for operations.
Key Data
$100 million
— Amount of capital spending avoided that saves about $6.5 million annually in debt service.
The New York City Housing Authority's 2020 operating budget reveals a growing reliance on City subsidies, which have increased 75 percent since 2015, while rising labor costs and a declining rent collection rate threaten long-term fiscal stability. To address these challenges, the authority must implement structural changes to improve rent collection and ensure future labor agreements are financially sustainable.
Recommendations related to City Spending Trends
NYCHA’s forthcoming organizational plan must include a program to boost the rent collection rate and maintain it going forward.
NYCHA’s fiscal stability depends on future settlements being financially sustainable and providing enough flexibility for NYCHA to implement its turnaround plan.
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.
Personnel shifts must be accompanied by a combination of additional funding, reallocation of resources, spending cuts, or productivity enhancements to avoid structural imbalances.
Key Data
$262 million
— Anticipated 2020 public housing expenses covered by City subsidies.
75 percent
— Increase in City support for NYCHA’s budget since 2015.
$406 million
— Total payments to NYCHA included in the City’s fiscal year 2020 budget.
$100 million
— Annual cost to NYCHA resulting from the falling rent collection rate.
19 percent
— Growth in NYCHA’s operating budget since 2015.
$1.4 billion
— Projected 2020 payroll costs for staff working on both public housing and Section 8.
The Citywide Savings Program relies heavily on routine budget adjustments and re-estimates rather than structural changes, with efficiency savings accounting for only 33% of the total identified savings in the FY2021 plan. Achieving a consistent 1% annual efficiency savings target since fiscal year 2016 would have reduced the fiscal year 2021 budget by $2 Billion, highlighting the potential for more disciplined fiscal management.
Recommendations related to City Spending Trends
The Citywide Savings Program should include greater efficiency savings to better manage city expenditures.
The city should prioritize efficiency savings, which involve changes to agency practices to reduce spending without reducing service, rather than relying on routine budget adjustments.
To curb budget growth, the city should aim for 1 percent annual efficiency savings, which would have significantly reduced the FY2021 budget.
Key Data
0.6%
— The FY2021 Citywide Savings Program identifies savings equal to only 0.6% of city-funded spending over five years.
33%
— Efficiency savings account for just 33% of the total initiatives included in the FY2021 Citywide Savings Program.
0.23%
— Between FY2016 and FY2021, efficiency savings averaged just 0.23% of city-funded spending.
$2 Billion
— Achieving 1% annual efficiency savings since FY2016 would have reduced the FY2021 budget by $2 Billion.
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 salaries and contracts. To prepare for potential economic downturns, the city must prioritize spending restraint and manage the factors driving these rapid expenditure increases.
Recommendations related to City Spending Trends
The City should prioritize spending restraint in the upcoming budget season to prepare for potential economic downturns.
Municipal leaders should actively manage the factors driving rapid spending growth, such as the rising cost of contracts, overtime, or headcount growth, to avoid future service reductions or tax increases.
Key Data
$92.0 billion
— Total City expenditures in fiscal year 2019.
4.8 percent
— Average annual budget growth rate from fiscal year 2014 to fiscal year 2019.
$17.1 billion
— Spending on contractual services in fiscal year 2019.
$72.8 billion
— Total City expenditures in fiscal year 2014.
$1.0 billion
— Cost of the Universal Pre-Kindergarten program in fiscal year 2019.
$163 million
— Spending on the Summer Youth Employment Program in fiscal year 2019.
The MTA's Access-A-Ride program faces significant cost growth due to increased utilization, with projected operating costs rising to $691 million by 2023. To address these financial constraints, the City and the MTA must determine a sustainable cost-sharing model and evaluate potential service adjustments, such as limiting on-demand trips or increasing passenger contributions.
Recommendations related to City Spending Trends
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%
— Access-A-Ride's fare revenue as a percentage of the program's total operating cost.
$86
— 2018 per trip cost for the primary van service.
$29
— 2018 per trip cost for an advance reservation trip.
New York City Health + Hospitals faces a persistent operating deficit, averaging $3 billion annually between 2015 and 2017, which necessitates significant local tax subsidies that are projected to reach $2.3 billion by fiscal year 2023. To address this, the City and State should implement performance-based budgeting, better target Medicaid supplemental payments, and more equitably redistribute surplus revenues from commercial insurance to support indigent care.
Recommendations related to City Spending Trends
The City Office of Management and Budget (OMB) and H+H leadership should develop a new approach to financial planning and budgeting.
Progress toward the benchmarks should be publicly monitored, and H+H leadership held accountable.
The State should 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.
The State should 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.
The State should 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
$3 billion
— Average annual operating deficit for H+H in fiscal years 2015 to 2017.
$1.7 billion
— City support to H+H in fiscal year 2019.
$2.3 billion
— Projected City support to H+H in fiscal year 2023.
$359 million
— City support to H+H in fiscal year 2009.
$1.3 billion
— Baseline gap in the H+H financial plan for 2020.
$2.0 billion
— Baseline gap in the H+H financial plan for 2023.
New York City's budget has grown at an accelerating pace, with City-funded expenditures rising 6.6 percent in fiscal year 2019, while the municipal workforce has expanded by over 29,000 employees since 2014. To prepare for potential economic downturns, the city should restrain spending growth, maintain a flat headcount, and set more ambitious agency savings targets.
Recommendations related to City Spending Trends
The City should restrain spending by offsetting new expenses with recurring commensurate savings.
The City should keep headcount flat, ensuring that fiscal years 2020 and 2021 do not exceed the fiscal year 2019 year-end level of 326,739.
The City should substantially increase annual agency savings targets to ensure that recurring efficiency savings equal at least 1 percent of agency budgets.
The City should increase budgetary reserves or make deposits to the Retiree Health Benefit Trust using additional resources generated by savings or higher than forecast revenues.
The Mayor should require all agencies to improve operations continually and generate savings to ensure fiscal stability.
Key Data
6.6 percent
— The rate at which City-funded expenditures grew in fiscal year 2019, the highest rate since fiscal year 2012.
326,739
— The number of full-time and full-time equivalent employees in the municipal workforce at the end of fiscal year 2019.
$92.0 billion
— Total City spending in fiscal year 2019, representing a 26.4 percent increase from fiscal year 2014.
$714 million
— The amount of annual recurring efficiency savings that would be produced if agencies were required to identify savings equal to 1 percent of their budgets.
$4.7 billion
— The record balance reached by the Retiree Health Benefit Trust (RHBT).
15.5 percent
— The share of all announced savings that were attributed to efficiency initiatives between the Executive Fiscal Year 2016 Budget and the Executive Fiscal Year 2020 Budget.
New York City voters are encouraged to approve Ballot Question 4, which would amend the City Charter to establish a Rainy Day Fund, allowing the city to save revenue during economic growth to mitigate service cuts and tax hikes during downturns. While the proposal also includes changes to budget modification timelines and minimum budget guarantees for certain offices, the primary benefit of creating a fiscal reserve outweighs concerns regarding these additional provisions.
Recommendations related to City Spending Trends
New York City voters should support Ballot Question 4 to amend the New York City Charter to allow the City to create and use a Rainy Day Fund.
State officials must ensure that changes to the New York State Financial Emergency Act limit use of the Rainy Day Fund to times of economic recession and severe emergency.
Key Data
30
— The number of days within which the Mayor must submit budget appropriation modifications following each quarterly financial plan update.
4
— The specific ballot question number that voters are urged to support to amend the City Charter.
In fiscal year 2019, New York City’s nearly 306,000 full-time employees earned an average total pay of $85,636, with uniformed staff averaging $106,000 annually compared to $73,106 for civilian employees. These earnings are significantly influenced by overtime and other pay, particularly among uniformed staff who average between $14,000 and $23,000 in annual overtime.
Key Data
$85,636
— Average total pay for the nearly 306,000 active full-time employees on New York City’s payroll in fiscal year 2019.
$106,000
— Average annual pay for uniformed employees in New York City.
$73,106
— Average annual pay for civilian employees in New York City.
$86,002
— Average annual pay for pedagogical employees in New York City.
$14,000
— Lower end of the 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.
The NYC Ferry system relies on a high taxpayer subsidy, with a per-ride cost of $9.34 and a farebox recovery ratio of only 24 percent, which is significantly lower than most other large public ferry systems. Because the current flat fare structure does not align with operating costs, the city should reconsider its operating strategy and pricing model to improve financial sustainability.
Recommendations related to City Spending Trends
The high cost of the NYC Ferry, both in per-trip subsidy and relative to other public ferry systems, should prompt reconsideration of the operating strategy and pricing model.
Key Data
$9.34
— NYC Ferry's per-ride subsidy in fiscal year 2019.
24%
— The portion of NYC Ferry's operating costs recouped through fare revenue in 2019.
$2.75
— The flat fare charged for an NYC Ferry ride, which is a primary driver of the system's high subsidy.
$9.88
— The per-trip subsidy for the New Orleans Ferry in 2017.
14%
— The recovery ratio for the New Orleans Ferry in 2017.
5,670,849
— The annual ridership for the NYC Ferry in fiscal year 2019.
New York City should adopt a non-exclusive commercial waste zone model to reduce vehicle miles traveled while maintaining competition and avoiding the higher costs associated with city-run collection. Relying on the Department of Sanitation for commercial waste collection would be financially inefficient, as city collection costs are double those of the private sector and would likely rely on expensive overtime.
Recommendations related to City Spending Trends
We urge enactment of non-exclusive waste zones, which will achieve most of the benefits resulting from a zone system while maintaining competition and customer service, and minimizing fiscal risk to the City.
We urge the City Council to amend Intro 1574 to permit DSNY to award contracts to three to five carters per zone.
The City should set standards for vehicles emissions, safety, training, labor, recycling, and other policy goals through contract requirements.
The City should avoid exclusive zones, as they put the City at risk if a carter fails to deliver services.
Key Data
50 percent
— Non-exclusive zones are projected to reduce vehicle miles traveled (VMT) by 50 percent.
58 percent
— Exclusive zones are projected to generate a 58 percent reduction in vehicle miles traveled (VMT).
three to five
— The City Council should permit the Department of Sanitation to award contracts to three to five carters per zone.
New York City's spending on leased space for public facilities exceeded $1.1 billion in fiscal year 2018, a cost that has grown 40 percent since 2014 and is outpacing the growth of the city's overall budget. The Department of Citywide Administrative Services must improve its management, monitoring, and analysis of these leases to ensure efficient and cost-effective use of space.
Recommendations related to City Spending Trends
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.
Upholding the Charter-mandated obligation to collect, monitor, and publish data on the City’s real estate holdings is an important first step.
The City should evaluate whether agencies efficiently use their facilities, whether owning or leasing space is more cost effective, whether expiring leases should be extended or vacated, and whether space utilization is becoming more efficient.
Key Data
$1.1 billion
— NYC spending on leased space in fiscal year 2018
40 percent
— Growth in lease costs from fiscal year 2014 to 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
$1.2 billion
— Expected spending on leased space in fiscal year 2020
New York City's budget grew by $19 billion between fiscal year 2014 and fiscal year 2019, representing an average annual increase of 4.5 percent. This expansion was driven by federal and state mandates, inflationary costs, collectively bargained wage increases, and specific priorities of the de Blasio administration, with education, health, and social services accounting for over two-thirds of the agency spending growth.
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.
$15 billion
— Increase in spending by City agencies between fiscal year 2014 and fiscal year 2019.
$6.2 billion
— Spending growth in the Education sector since fiscal year 2014.
$1.1 billion
— Spending growth in Homeless Services since fiscal year 2014.
$1.1 billion
— Spending growth in the Police department since fiscal year 2014.
New York City's strategy of building new schools to address crowding is expensive and slow, with the 2020-2024 capital plan allocating $7.9 billion for 89 new buildings. Implementing alternative strategies like rezoning, repurposing existing space, and adjusting admission policies could reduce the need for new construction and save the city at least $2.4 billion.
Recommendations related to City Spending Trends
The Department of Education should prioritize alternative strategies like rezoning, repurposing seats, and changing admission policies over new school construction to address crowding more cost-effectively.
The city should implement a more flexible system of overlapping or grouped zones to better balance enrollment between nearby crowded and non-crowded elementary school buildings.
Officials should cap high school enrollment at levels consistent with capacity standards to eliminate crowding, as citywide high school capacity is already adequate.
The Department of Education should convert excess administrative and non-instructional space into classroom capacity to help alleviate school crowding.
The city should reconfigure grades in underutilized middle school buildings to provide additional capacity for elementary students in crowded areas.
Key Data
$9.1 billion
— Amount spent by the Department of Education to build new schools with a capacity of 98,302 seats from 2005 through September 2018.
$7.9 billion
— Funding included in the capital plan for fiscal years 2020 to 2024 for 89 new school buildings.
$2.4 billion
— Potential reduction in capital spending if alternative strategies are used to address school crowding.
$150 million
— Annual debt service savings for New York City and State if alternative strategies are implemented.
95,984
— Number of seats fewer than required in the city's 618 crowded school buildings.
$121,270
— Average cost per new seat budgeted in the 2020-2024 capital plan.
$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, a shortfall that suggests current spending levels are unsustainable even during periods of economic strength. Furthermore, city-funded expenditures grew by 5.7 percent in 2019 and are projected to increase by 5.3 percent in 2020, outpacing the 3.6 percent annual average observed between 2014 and 2017.
Recommendations related to City Spending Trends
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.
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.
3.6 percent
— The annual average growth rate of City-funded expenditures between fiscal years 2014 and 2017.
333,433
— The number of authorized positions for the city workforce projected for fiscal year 2020.
$4.576 billion
— The amount the City prepaid in fiscal year 2019 expenses at the end of fiscal year 2018.
Establishing non-exclusive commercial waste zones in New York City would significantly reduce vehicle miles traveled while maintaining competitive pricing and customer choice. This approach avoids the fiscal risks associated with exclusive zones, where the city would be forced to cover higher costs if a private contractor failed to perform.
Recommendations related to City Spending Trends
The City should establish a non-exclusive commercial waste zone program to maintain competition and customer choice.
The City's request for proposals should include detailed performance metrics to be tracked and made publicly available.
The City should prioritize non-exclusive zones to minimize risks to customers and taxpayers.
The City should ensure that performance metrics are made publicly available to allow for a robust evaluation of the program.
Key Data
50 percent
— The reduction in vehicle miles traveled (VMT) expected from moving to a zone model.
58 percent
— The overall VMT reduction associated with exclusive zones.
8 percentage points
— The incremental benefit of exclusive zones over a non-exclusive model.
86 percent
— The portion of potential VMT reduction achievable through non-exclusive zones.
twice
— The factor by which DSNY collection costs exceed those of the private sector.
The Budget Navigator tool has been updated with fiscal year 2019 and 2020 data, allowing users to explore and compare New York City and New York State revenue and expense trends dating back to 2008. This interactive feature enables the isolation of specific line items and the visualization of long-term fiscal changes through customizable graphs and sliders.
The Fiscal Year 2020 budget agreement increased city spending, savings, and reserves, but prioritized service expansion and new initiatives over depositing the majority of new resources into reserves. While the city increased its general reserve by $150 million and the Retiree Health Benefits Trust by $100 million, it missed an opportunity to further strengthen its fiscal position during a period of economic growth.
Recommendations related to City Spending Trends
The City should have placed the vast majority of new resources in reserve rather than dedicating them to service expansion and new spending initiatives.
City leaders should have gone further to 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 used to support new Council spending priorities.
$150 million
— Increase to the City's general reserve.
$100 million
— Increase to the Retiree Health Benefits Trust (RHBT).
New York City's executive budget proposal falls short of necessary fiscal prudence, as the city faces potential revenue shortfalls of $15 billion to $20 billion in a recession while continuing to increase spending. To ensure long-term stability, the city should prioritize adding all newly identified revenue to reserves and offsetting any new spending with equivalent efficiency savings.
Recommendations related to City Spending Trends
The city should add all newly identified money to the city’s reserves.
The city should offset any added spending with dollar-for-dollar reductions.
The budget should wipe out more of the 4,700 full-time vacancies still remaining.
The city should implement a more extensive fleet reduction to save more than the $20 million identified in fiscal year 2020.
The city should centralize procurement to save $80 million.
The city should consolidate and centralize union welfare funds to reduce administrative costs.
Key Data
$15 billion to $20 billion
— The potential three-year revenue shortfall that a recession could cause.
$800 million
— The amount of extra funds the city could have going into budget adoption.
$160 million
— The potential savings from consolidating and centralizing union welfare funds.
$80 million
— The potential savings from centralizing procurement.
$20 million
— The potential savings from a more extensive fleet reduction in fiscal year 2020.
3.6%
— The increase in fiscal year 2020 city-funded spending.
New York City's budget has grown significantly, with total spending projected to reach $100.6 billion by fiscal year 2023 alongside a workforce headcount of 337,477. The city also 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
— Full-time and full-time equivalent headcount in fiscal year 2023.
$20.4 Billion
— Potential tax revenue shortfall based on a recession similar to 2008.
$257.3 Billion
— Total of the largest long-term liabilities in fiscal year 2018.
$1.25 Billion
— Annual contribution to city budget reserves.
$4.5 Billion
— Balance in the Retiree Health Benefits Trust.
$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.
New York City's fiscal year 2020 executive budget increases city-funded spending by 3.6 percent, while relying on reestimates and funding shifts rather than efficiency improvements to achieve savings. Although the city maintains $1.25 billion in annual contingency and capital reserves, this amount is insufficient to cover a potential $15 billion to $20 billion revenue shortfall in the event of a recession.
Recommendations related to City Spending Trends
The City should prioritize more comprehensive planning and prioritization focusing on state of good repair work within its 10-year capital strategy.
The City should pursue savings through improved efficiency rather than relying on expense reestimates, increased revenues, and funding shifts.
The City should increase its contingency and capital reserve funds to better prepare for a potential $15 billion to $20 billion three-year revenue shortfall.
Key Data
3.6 percent
— The rate of increase for city-funded spending in the fiscal year 2020 executive budget.
1,600
— The number of vacant positions reduced on a recurring basis.
$1.25 billion
— The amount budgeted annually for contingency and capital reserve funds.
$15 billion to $20 billion
— The potential three-year revenue shortfall that a recession could drive.
$116.9 billion
— The total value of the 10-year capital strategy.
The NYC Ferry system requires high public subsidies, costing $10.73 per ride, which is significantly higher than other transit options. Future expansions, including new routes to Coney Island and Ferry Point, are projected to further increase these costs and require substantial additional capital investment.
Recommendations related to City Spending Trends
City officials should reconsider the policy choices that contribute to the high subsidies before implementing any further expansion of service.
Officials should evaluate options that would reduce the level of subsidy for the ferry system.
The City should consider whether alternative uses would meet the city’s transportation needs more efficiently and effectively.
Officials should charge higher fares on weekends and for noncommuters to offset the cost of subsidies for daily commuters.
The City should implement dynamic pricing models for long, low-productivity routes that require substantial subsidies and see demand spikes on weekends.
Key Data
$10.73
— Per-ride operating subsidy for NYC Ferry in fiscal year 2018.
$24.75
— Projected per-ride subsidy for the proposed Coney Island ferry route.
$56.7 million
— NYC Ferry’s operating costs in fiscal year 2018.
$638.5 million
— Total capital commitments for the NYC Ferry system as of February 2019.
$48.6 million
— Annual debt service at full buildout for the NYC Ferry system.
$114.3 million
— Capital commitments for NYC Ferry as of February 2019.
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 .
New York City's implementation of a Program to Eliminate the Gap (PEG) aims to generate $750 million in annual savings to prepare for potential economic risks. This initiative encourages agencies to identify recurring savings through operational efficiencies rather than relying solely on re-estimates or debt refinancing.
Recommendations related to City Spending Trends
OMB should set agency targets that generate savings in excess of the $750 million annual goal.
Savings from the PEG should be derived exclusively from agencies and should focus on increasing efficiency in operations and service delivery.
The City should continue to seek savings from re-estimates and debt service in tandem with savings from efficiency initiatives, but these should be above and beyond the $750 million recurring PEG target.
Agencies should take the lead on identifying savings, as executives, managers, and front line staff have valuable insights on how to improve programs and operations.
The Budget Director should make the cuts if agencies fail to propose savings that meet the targets.
Key Data
$155 million
— Average annual efficiency initiative savings in the five-year savings plans for fiscal years 2016, 2017, 2018, and 2019.
0.25 percent
— Percentage of the City funds budget represented by efficiency initiatives in the five-year savings plans for fiscal years 2016, 2017, 2018, and 2019.
$750 million
— The Mayor’s stated annual PEG target.
1 percent
— Percentage of the City funds budget equal to the Mayor’s stated PEG target.
$10 to $12 billion
— Potential out-year budget gaps per year if a recession occurs.
New York City faces a potential $30 billion cumulative budget gap over three years if a recession occurs, necessitating immediate action to reduce spending growth and bolster reserves. Current budget reserves and savings plans are insufficient to prevent drastic service cuts or tax increases, requiring more substantial fiscal preparation.
Recommendations related to City Spending Trends
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 ensure savings are substantially larger to forestall drastic service cuts and counterproductive tax increases during a recession.
Key Data
$30 billion
— Cumulative three-year budget gaps under a 2008-style recession scenario.
$15 billion to $20 billion
— Potential tax revenue shortfall below projections over three years in a recession.
$750 million
— Amount of recurring savings announced in the Executive Budget, which only reduces 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.
$5.3 billion
— Amount City tax revenues would fall below the financial plan in the first year of a hypothetical recession.
$103.3 billion
— Estimated liability for other postemployment benefits (OPEB) at the end of fiscal year 2018.
New York City's procurement process is hindered by outdated laws and bureaucratic inefficiencies, resulting in a median contract cycle time of 179 days and limited competitive bidding. Implementing reforms such as centralizing purchasing under the Department of Citywide Administrative Services and modernizing e-procurement systems could improve efficiency and potentially save over $80 million annually.
Recommendations related to City Spending Trends
The City should continue to improve e-procurement systems, including e-invoicing and payment, to increase transparency and accountability.
The City should centralize more procurement under the Department of Citywide Administrative Services (DCAS) to leverage staff expertise and potentially save more than $80 million per year.
The City should streamline the approval of capital projects and change orders to reduce project timelines and generate savings.
The City should continue to urge the State to change construction procurement laws, including permitting best value awards and design-build authority, and eliminating the Wicks Law.
Key Data
$20 Billion
— Total amount spent by New York City on goods and services in fiscal year 2018.
179 days
— The median cycle time for the City's procurement process from solicitation to registration in fiscal year 2018.
$80 Million
— Potential annual savings from greater centralization of contracting under the Department of Citywide Administrative Services.
42 percent
— The portion of City contracts that were initial competitive bids.
86 percent
— The share of City contracts that were valued at $100,000 or less.
60 percent
— The share of City goods purchases managed by the Department of Citywide Administrative Services.
New York City's annual capital investments have grown substantially, reaching $11.8 billion in fiscal year 2018, yet tracking these costs remains difficult due to fragmented data and a lack of transparency. Implementing a comprehensive online database for all pending construction projects would improve public oversight and allow for better analysis of capital project costs and delays.
Recommendations related to City Spending Trends
The City should produce an online database of all pending construction projects that includes initial and current completion dates and costs.
The City should expand the existing Capital Projects Dashboard to leverage an existing platform that already includes more data elements than would be required under Intro. No. 113.
The City should require inclusion of each project’s associated capital budget lines and project ID codes to allow the database to be linked to budget documents.
The City should retain data on completed projects to allow for retrospective assessment of performance.
Key Data
$7.4 billion
— City capital commitments in fiscal year 2014.
$11.8 billion
— City capital commitments in fiscal year 2018.
$83.8 billion
— Forecasted capital commitments from fiscal years 2019 through 2023.
$25 million
— Threshold for current capital projects included in the existing Capital Projects Dashboard.
$10 billion
— Annual capital commitments by the City.
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% increase in city-funded spending alongside a ten-year capital strategy that exceeds $100 Billion for the first time. To prepare for potential economic downturns, the city must limit spending growth to inflation and prioritize recurring savings through operational efficiencies rather than relying on one-time revenue actions.
Recommendations related to City Spending Trends
The City needs to implement greater recurring savings from making government more efficient to bolster reserves and ensure critical services.
Spending growth should be limited to inflation and reserves should be increased.
The Program to Eliminate the Gap (PEG) should be developed with an eye to making operations more efficient and generating recurring savings.
Key Data
3.4%
— Projected increase in City-funded spending in fiscal year 2020.
$104.1 Billion
— Total cost of the Preliminary Ten-Year Capital Strategy for Fiscal Years 2020 to 2029.
8.7%
— Increase in the ten-year capital strategy compared to the prior strategy.
New York City has significantly increased spending and headcount during a decade of economic growth, necessitating a shift toward fiscal prudence to prepare for potential downturns. The City should implement a four-part strategy to contain spending growth, build reserves, refine the capital plan, and strengthen the finances of public authorities like NYCHA and the MTA.
Recommendations related to City Spending Trends
The City should limit spending growth to the rate of inflation to ensure fiscal discipline.
No additional headcount should be authorized, as improved productivity of existing personnel should accommodate new needs.
The Citywide Savings Program should generate recurring operational savings to fund fully any new or expanded programs.
The City should plan for annual deposits to the Retiree Health Benefits Trust at higher levels in each year of the financial plan.
The City should focus on priority projects and reduce the funding level in the upcoming Ten-Year Capital Strategy.
Key Data
$20 billion
— Increase in City spending since fiscal year 2014.
12 percent
— Expansion of the City’s workforce to a record 332,000 full-time equivalent employees.
332,000
— Record number of full-time equivalent employees in the City workforce.
$1.375 billion
— Budget reserves in fiscal year 2019.
$1.8 billion
— Overtime spending in fiscal year 2018.
$257 billion
— Aggregate long-term liabilities at the end of fiscal year 2018.
New York State faces significant fiscal gaps and economic uncertainty, necessitating a strategy that builds reserves, controls spending, and prioritizes fiscal responsibility. The state must avoid using one-time revenues for recurring expenses and should reallocate aid to high-need districts while improving transparency in economic development investments.
Recommendations related to City Spending Trends
The State should build reserves to prepare for economic and fiscal setbacks, as it has not made deposits to its rainy day funds since fiscal year 2015.
The State should avoid using one-time revenues to fund recurring spending to prevent exacerbating future deficits.
The State should reallocate education aid to the highest need districts rather than increasing total aid by more than necessary.
The State should increase transparency, focus, and effectiveness of economic development investments, which currently lack transparency and have not produced desired results.
The State should enact congestion pricing to support the MTA, ensuring all revenue is dedicated to the transit authority.
Key Data
$3.1 billion
— The State's projected budget gap in fiscal year 2020.
$16.1 billion
— The cumulative budget gap projected through fiscal year 2022.
$44 billion
— The potential increase in budget gaps over three years if a recession occurs.
$1.8 billion
— The current amount in the State's rainy day funds.
$383 million
— One-time revenue from financial settlements used in the current budget.
$4.8 billion
— The amount of annual economic development incentives that lack transparency.
New York City's new health care savings agreement sets lower targets than previous plans, relying on accounting adjustments rather than structural reforms to achieve savings. While some progress has been made, the agreement fails to address significant inefficiencies, such as the costly provision of retiree health insurance and fragmented welfare fund benefits.
Recommendations related to City Spending Trends
The targets should have continued at the 2018 level to stimulate greater cooperation and movement on reforms.
Any recurrent savings from the prior agreement should have been returned to the general fund.
Any savings against high projections should be used for general operating needs, rather than claimed as a savings against labor costs.
The City should address the fragmented and inefficient provision of prescription drug, vision, and dental care via welfare funds.
The City should reform the antiquated and wasteful Health Insurance Stabilization Fund.
The City should address the costly provision of health insurance to retirees with no contribution to the cost of care.
Key Data
$8.1 billion
— Total projected annual health expenditures in fiscal year 2019.
$3.4 billion
— Health insurance savings target set for the agreement spanning fiscal years 2015 to 2018.
$1.1 billion
— Savings target for the new agreement spanning fiscal years 2019 to 2021.
$658 million
— Projected savings from lower-than-anticipated premium increases in the HIP rate.
$900 million
— Savings that advanced the goal of bending the health care cost curve.
$1.9 billion
— Health savings claimed from the accounting decision to credit lower than projected growth in premiums.
New York City spends over $1.1 billion annually on emergency medical services, yet the system is plagued by inefficiencies, including the costly and often unnecessary dispatch of fire engines to medical calls. Implementing reforms such as reducing inappropriate ambulance requests and optimizing staffing models could generate significant savings and improve response times for life-threatening incidents.
Recommendations related to City Spending Trends
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.
Key Data
$1.1 billion
— Annual city spending on emergency medical services.
$58.5 million
— Estimated annual savings from a 10 percent reduction in unnecessary ambulance requests.
$7.2 million
— Annual cost of staffing one fire engine.
$1,970
— Estimated average cost of a fire engine response to a medical incident.
$486
— Average cost of an ambulance run.
$335
— Unit cost of an ambulance run after factoring in reimbursements.
8 is the number of years Andrew Cuomo has served as the 56th Governor of New York State. CBC's David Friedfel and Patrick Orecki join the podcast to discuss the demographic, fiscal, and policy trends of the last 8 years.
The NYC Money Meter dashboard utilizes the Budget Function Analysis and Mayor’s Management Report to provide transparency into agency spending and performance metrics. Expanding the Budget Function Analysis to include more city agencies would improve the usability and comprehensiveness of the city's budget reporting, which currently only covers 34 percent of the fiscal year 2018 budget.
Recommendations related to City Spending Trends
The Budget Function Analysis (BFA) should be expanded to cover more agencies.
Key Data
34%
— Percentage of the city’s fiscal year 2018 budget accounted for by the Budget Function Analysis (BFA) report.
The New York City Department of Sanitation's curbside organic waste program faces significant fiscal challenges, with collection costs reaching $1,700 per ton compared to $291 for standard refuse. Due to low resident participation and insufficient processing capacity, the city has halted the program's expansion to assess strategies for improving efficiency and cost-effectiveness.
Recommendations related to City Spending Trends
The Department of Sanitation should fine-tune the organics program by assessing participation in existing neighborhoods to improve efficiency.
The Department of Sanitation should pilot new strategies to increase tonnage collected through the curbside program.
The Department of Sanitation should experiment with alternative collection schedules or modes to lower high per-ton collection costs.
The Department of Sanitation should provide more detailed data on tonnage, participation, collection modes, costs, and collection efficiency to ensure transparency.
The City should negotiate operational changes with the Uniformed Sanitationmen’s Association to potentially lower the high per-ton collection cost.
Key Data
$1,700
— Estimated cost per ton of Organics collection, which is significantly higher than other waste streams.
$291
— Cost per ton of refuse collection, which is substantially lower than the cost of organics collection.
$686
— Cost per ton of recycling collection, which is significantly less expensive than organics collection.
3.4 percent
— Percentage of total citywide organic tonnage represented by current curbside collection.
10.6 percent
— Percentage of organic waste separated in neighborhoods with the curbside program in 2017.
89.4 percent
— Percentage of organic waste in districts with the program that was still put in regular waste for landfilling.
New York City's long-term liabilities, including bonded debt, pension obligations, and retiree health benefits, totaled $252.5 billion at the end of fiscal year 2017, creating significant legacy costs that consume over 20% of the annual operating budget. Despite a strong economy, the City lacks a comprehensive strategy to reduce these debts, which continue to grow and crowd out funding for other municipal services.
Recommendations related to City Spending Trends
New bonded debt should be limited by implementing a more realistic capital plan developed around specific priorities and predominantly focused on repairing critical infrastructure.
The City should use dedicated capital reserve funds as PAYGO capital to reduce the borrowing needed each year to finance the capital plan.
The City should establish a goal of cutting retiree health benefit costs by 50 percent through measures like premium sharing and eliminating Medicare Part B reimbursement.
The City should develop a strategy for prefunding OPEB liabilities by establishing a policy for deposits and withdrawals to the Retiree Health Benefits Trust.
The City should advocate for legislative changes to reduce the greatest cost drivers of pension benefits, such as the inclusion of overtime hours in pension calculations for uniformed employees.
The City should seek legislation to change the fixed return Tax Deferred Annuity benefit provided to teachers and school personnel.
Key Data
$252.5 billion
— Total long-term liabilities for New York City at the end of fiscal year 2017.
$88.4 billion
— The City's unfunded liability for other postemployment benefits (OPEB) in fiscal year 2017.
$56.2 billion
— The City's unfunded pension liability in fiscal year 2017.
$19.3 billion
— The projected amount of legacy costs in the fiscal year 2019 operating budget.
21.1 percent
— The portion of total expenditures devoted to legacy costs in fiscal year 2019.
$107.8 billion
— The amount of bonded debt outstanding at the end of fiscal year 2017.
$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…
Restoring the subway car fleet to a state of good repair will require significant, currently unidentified funding, with total costs for modernization plans like Fast Forward exceeding $40 billion. To return car reliability to previous highs, leadership must prioritize these investments within the 2020-2024 capital program and ensure effective administration of the proposed upgrades.
Recommendations related to City Spending Trends
MTA leadership should increase significantly its commitment to subway cars in the 2020-2024 capital program.
Fast Forward must be funded in future capital plans and administered effectively to achieve anticipated results.
The MTA must prioritize subway car investments to avoid placing added pressure on the fleet’s maintenance and squandering hard-fought gains in reliability.
Key Data
$9 billion
— The estimated cost relating to subway cars.
$40 billion
— Initial estimates of the entire Fast Forward program costs.
$8.3 billion
— The combined cost of R211s and additional cars.
$1.2 billion
— The amount authorized in the MTA’s current capital plan for subway car procurement.
$5.5 billion
— Additional funding required to implement Fast Forward.
$1.8 billion
— The cost of the Subway Action Plan (SAP) program to reverse declining performance.
New York City's uniformed overtime spending remains high, particularly within the Fire Department and Department of Correction, where caps have been exceeded despite increased staffing levels. Addressing these costs requires negotiating work rule changes and reforming sick leave policies, as current strategies like hiring more staff have proven insufficient to curb excessive overtime.
Recommendations related to City Spending Trends
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 earned by employees in fiscal year 2016.
$19,400
— Average overtime earned per uniformed employee in fiscal year 2016.
53 percent
— Portion of the uniformed workforce earning overtime pay in excess of 20 percent of base salary in fiscal year 2016.
$272 million
— Uniformed overtime spending at the Fire Department in fiscal year 2017.
$240 million
— Uniformed overtime spending at the Department of Correction in fiscal year 2017.
7 percent
— Absence rate for the Fire Department in the first four months of 2018.
New York City's fiscal year 2019 budget allocates nearly $10 billion toward public employee pensions, a figure that continues to grow steadily. Proposed legislation to increase pension benefits for police and firefighters would add further costs, potentially forcing the city to reduce funding for other essential services and priorities.
Recommendations related to City Spending Trends
The State Legislature and City Council should reject bills that would hike the cost of pensions for NYC police and firefighters.
The City Council and the State Legislature should not pass an unwarranted pension sweetener that will be bitter for taxpayers.
Key Data
$90 billion
— The total budget adopted by the City Council for fiscal year 2019.
$10 billion
— The amount devoted to pensions for public employees in the fiscal year 2019 budget.
$20 million
— The estimated cost of one proposed pension bill for the next year.
$74,500
— The average annual pension for a recently retired NYC police officer.
$118,000
— The average annual pension for a recently retired firefighter.
$35,000
— The average annual pension for a civilian employee.
A series of vetoed legislative bills would have expanded retirement and disability benefits for various public employees, potentially creating significant long-term fiscal liabilities for the state. These proposals included multi-million dollar costs for enhanced death benefits, disability retirements, and changes to overtime pay calculations for public sector workers.
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 and forest rangers.
$4.70 Million
— Annual costs for removing the limit on overtime pay inclusion 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.
Spending on New York City's 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 strategy to control these rapidly rising costs, which have consistently exceeded initial budget projections.
Recommendations related to City Spending Trends
The Administration must provide a clear and specific plan to control the costs of homeless services.
The City should prioritize eliminating the use of commercial hotels in favor of shifting to Tier II shelters to achieve cost savings.
Key Data
$3.0 billion
— projected total spending for homeless services in fiscal year 2018
$1.3 billion
— total spending 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 commercial hotels
112.5 percent
— increase in shelter funding over the five-year period from fiscal year 2014 to 2018
$300.1 million
— additional funds allocated to the capital commitment plan to open 90 new Tier II shelters
New York City's savings plans rely heavily on re-estimates and funding shifts, which account for 49% of the $4,670 million in total savings, while efficiency savings make up only 16%. To achieve lasting fiscal improvements, the city must set more ambitious goals for efficiency to ensure the effective use of resources rather than relying on one-time adjustments.
Recommendations related to City Spending Trends
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 in the Fiscal Year 2019 Citywide Savings Program.
16%
— Share of total savings attributed to efficiency savings in the Fiscal Year 2019 plan.
49%
— Share of total savings attributed to re-estimates and funding shifts in the Fiscal Year 2019 plan.
0.2%
— Efficiency savings as a percentage of total spending proposed during the five-year period.
New York City's fiscal year 2019 executive budget proposes $90.8 billion in spending, with city-funded expenditures growing by 5.8%—more than double the rate of inflation—since the previous year. 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.
Recommendations related to City Spending Trends
The City Council should limit growth in agency spending, confine its own requests to those with the most significant impact, and push to use additional city resources to make investments with a long-term payoff.
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 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%
— Growth rate of city-funded expenditures between fiscal years 2018 and 2019.
$67.4 billion
— Total city-funded expenditures for fiscal year 2019.
$1.25 billion
— Total annual budget reserves.
$90 billion
— City's obligation for the health benefits of public retirees.
$4.25 billion
— Current balance of the Retiree Health Benefits Trust Fund.
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.
New York City's Fiscal Year 2019 Executive Budget increases operating spending at more than twice the rate of inflation while growing city-funded spending by 5.8 percent. Additionally, the five-year capital commitment plan has expanded to approximately $82 billion, necessitating greater scrutiny and reform of the city's capital planning and budgeting processes.
Recommendations related to City Spending Trends
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%
— Projected growth of city-funded spending in the Fiscal Year 2019 Executive Budget.
$82 billion
— Total value of the five-year capital commitment plan.
New York City's waste management system faces significant fiscal challenges, with recycling collection costing more than double that of refuse collection and current organics programs remaining costly and inefficient. To improve efficiency and achieve zero waste goals, the city should optimize labor contracts, implement volume-based garbage fees, and prioritize fiscal considerations when expanding collection programs.
Recommendations related to City Spending Trends
The City should seek productivity gains in waste collection to realize savings, including meeting collection targets, increasing the volume of recyclables, and optimizing the Uniformed Sanitationmen's Association labor contract.
The City should focus on increasing participation in the curbside organics program before extending it to other areas and pursuing the use of in-sink disposers.
The City should continue policy initiatives to improve solid waste collection, including save-as-you-throw and single-stream recycling.
The City should revisit a plastic bag ban with a fee on alternatives to address the environmental and fiscal costs of landfilling bags.
The City should pursue collective bargaining changes to increase flexibility and productivity and end certain differentials and bonuses in the upcoming labor contract.
The City should expand the use of large containers and automated trucks to improve collection efficiency.
The City should halt organics program expansion until participation can be increased in existing districts.
The City should advocate for the use of in-sink disposers, which can crush food waste and send it to waste water treatment plants without incurring additional curbside collection.
Key Data
$629
— Cost to collect a ton of recycling.
$291
— Cost to collect a ton of refuse.
$20 million
— Estimated cost increase if households sorted 55% of recyclables.
$120 million
— Potential annual savings from meeting productivity targets.
$105 million
— Potential net reduction in costs from increasing capture rates and meeting productivity targets.
$40 million
— Estimated cost of collecting 13,000 tons of organics.
New York City faces nearly $1.0 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 priorities like the Fair Fares initiative, the city must exercise significant fiscal restraint.
Recommendations related to City Spending Trends
The City will need to exercise restraint in other areas to manage the additional $1.0 billion in expenditures.
The City’s budget should retain flexibility to address City Council priorities, such as the $212 million Fair Fares initiative.
Mayor Bill de Blasio must make significant changes to the financial plan when he releases the Executive Budget for Fiscal Year 2019.
Key Data
$1.0 billion
— Total additional operating and capital expenditures the City is expected to fund in fiscal year 2019.
$756 million
— Total operating spending the City is required to fund next year due to state actions.
$214 million
— Total capital spending the City is required to fund next year due to state actions.
$418 million
— Cost to the City for the Metropolitan Transportation Authority Subway Action Plan.
$121 million
— Shortfall in education funding the City is facing for state fiscal year 2019.
$200 million
— Estimated annual cost for the Raise the Age initiative.
New York City's capital commitment plan is consistently front-loaded and overly ambitious, resulting in a significant buildup of unspent funds and a reliance on a reserve for projects that are unlikely to be completed on schedule. In fiscal year 2017, the City only committed 54 percent of its planned capital funding, highlighting the need for more realistic projections that align with agency capacity and actual priorities.
Recommendations related to City Spending Trends
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.
The City should clearly articulate its capital priorities and immediate needs to facilitate a more effective and transparent planning process.
Key Data
$69.6 billion
— Total capital commitments planned from fiscal year 2018 through fiscal year 2021.
$15.7 billion
— The commitment target for 2018 in the current Preliminary Capital Commitment Plan.
$6.0 billion
— The reserve for unattained commitments in the 2018 plan, representing 28 percent of the total.
$10.9 billion
— The actual commitments made in the previous fiscal year, despite a projection of $20.0 billion.
54%
— The share of planned commitments the City actually committed in fiscal year 2017.
$3.2 billion
— The 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 firms with pupil transportation contracts, should be rejected because it circumvents competitive bidding and increases taxpayer costs. With annual pupil transportation costs exceeding $1.2 billion, the city should prioritize rebidding contracts to foster competition and generate necessary savings.
Recommendations related to City Spending Trends
The City Council should reject the School Bus Grant Program, which circumvents the public procurement process and increases costs to taxpayers without enhancing services.
The de Blasio Administration should find savings in pupil transportation to offset the increased costs incurred from the restoration of employee protections for seniority and pay.
All new school bus contracts should be awarded with an eye toward realizing savings in the costs of pupil transportation.
The City should rebid all transportation bus contracts to foster competition, increase use of technology, and improve efficiency.
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.
$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 through fiscal year 2018.
$400 million
— Savings achieved by rebidding school bus contracts without employee protections for seniority and pay.
The provided table tracks agency participation in preliminary budget savings programs from fiscal years 2012 through 2019, illustrating the scope of cost-cutting initiatives across various city departments. This historical overview highlights which municipal entities have been subject to these efficiency measures under both the Bloomberg and de Blasio administrations.
New York City taxpayers are subsidizing a guaranteed 7 percent investment return for teachers' retirement accounts, a cost that reached $1.2 billion in fiscal year 2015. This arrangement, which creates a significant financial burden and risks the viability of the pension system, should be reformed to align with market-based investment options.
Recommendations related to City Spending Trends
The city should eliminate the TDA and transfer its assets and participants to the Office of Labor Relations' plan, which is managed by independent institutions and offers multiple investment choices.
A more gradual reform would be to require only newly hired teachers to use the Office of Labor Relations' plan, while reforming the TDA plan serving current teachers and retirees.
The fixed income option should be converted to choices comparable to those offered in the Office of Labor Relations' plan, such as a government bond fund and a corporate bond fund with returns based on prevailing interest rates.
Elected leaders should consider the approach used by the federal government's Federal Employees Retirement System, which offers a voluntary deferred compensation plan with investment options that do not guarantee a set rate of return.
Key Data
$1.2 billion
— The amount of the taxpayer subsidy for the teachers' retirement fixed return fund in fiscal year 2015.
$18.7 billion
— The total amount of money in the fixed return fund in 2015, which grew from $7.4 billion in 2007.
36%
— The portion of the total taxpayer contribution to the Teachers' Retirement System Qualified Pension Plan that the 2015 taxpayer subsidy represented.
$238 million
— The amount of the taxpayer subsidy for the teachers' retirement fixed return fund in fiscal year 2007.
7.0%
— The current guaranteed interest rate for the Tax Deferred Annuity fixed fund option for most participants.
New York City taxpayers contribute over $1.1 billion annually to union-administered benefit funds, which often suffer from excessive administrative expenses, unnecessary reserves, and mismanagement. Consolidating these supplemental health and non-health benefits under city-managed programs could generate over $160 million in annual savings while improving benefit delivery.
Recommendations related to City Spending Trends
The Office of the Comptroller should give higher priority to auditing union-administered benefit funds.
The City should develop benchmarks and indicators for benefit funds that can trigger enforcement powers.
The Office of Labor Relations should expand the Comptroller’s oversight and enforcement authority over union-administered benefit funds.
The City should consolidate supplementary health care benefits under the City’s Health Insurance Plan to improve efficiency.
The City should provide non-health related benefits through a centralized cafeteria plan to allow for more tailored, consolidated benefit delivery.
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 provision of supplemental 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.
$44.5 million
— Total amount of City contributions to welfare funds subject to audit between 2009 and 2017.
New York City has historically utilized Programs to Eliminate the Gap (PEGs) to manage budget shortfalls, a practice that has been updated to include Citywide Savings Programs (CSPs) under recent mayoral administrations. These initiatives track the size of proposed savings in preliminary budgets dating back to 1982.
$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 capital spending reached unprecedented levels under the Bloomberg administration, resulting in significant infrastructure improvements but also leaving the city with a high debt burden and a backlog of maintenance needs. To address these challenges, the city should adopt a "fix it first" strategy that prioritizes state of good repair projects and implements more cost-effective contracting and asset management practices.
Recommendations related to City Spending Trends
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 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.
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 that increase costs and impede efficient construction management, such as repealing the Wicks Law.
Key Data
$111 billion
— Total capital commitments registered since fiscal year 2003 through the current fiscal year.
79 percent
— Increase in the value of assets owned by New York City and its related public authorities since fiscal year 2002.
$100 billion
— Total City-related debt outstanding as of fiscal year 2014.
14.3 percent
— Ratio of debt outstanding to personal income in fiscal year 2013, which is more than double the 6 percent benchmark for high debt.
$6.4 billion
— State of good repair requirements as reported in the Asset Information Management System in fiscal year 2014.
25 percent
— Estimated increase in the cost of housing construction caused by prevailing wage mandates.
New York City's fiscal monitors generally project a stable economic outlook, though they warn of potential budget gaps and revenue risks stemming from federal and state policy uncertainties. These projections, which include varying estimates for expenditure risks like overtime and homeless services, should be viewed with caution until the full impact of external fiscal factors is clarified.
Key Data
$3.2 billion, $2.3 billion, and $1.6 billion
— OMB projected budget gaps for fiscal years 2019, 2020, and 2021, respectively.
$75 million to $150 million
— Amount by which all monitors believe city overtime expenditures are underestimated.
$125 million to $142 million
— Forecasted additional costs for homeless services.
$700 million
— Revenue from new taxi medallions considered at risk over the financial plan period.
$165 million
— Potential reimbursement for fringe benefits and judgments and claims that the City may have to forgo for New York City Health + Hospitals.
$500 million
— Annual revenue risks identified by the State Comptroller for fiscal years 2019 through 2021.
New York City's 74 Business Improvement Districts (BIDs) collected over $100 million in fiscal year 2016 through special assessment fees, which are used to fund supplemental services like sanitation and public safety. Because these districts operate with the authority to tax properties, there is a need for more rigorous, transparent performance evaluations and oversight during the contract renewal process to ensure they are operating cost-effectively.
Recommendations related to City Spending Trends
The current contract should be revised to specify that BID contract renewal is conditioned upon a thorough performance review and analysis of progress in implementing the BID's strategic plan and should include specific evaluation criteria and performance metrics to be utilized by SBS.
The contract should also require BIDs to survey their members at least once every five years to determine satisfaction with the BID's strategic plan and performance.
The additional performance measurement data, combined with the data SBS already collects, should be included in the annual BID Report for every BID for which a contract is renewed in that year.
SBS should also disclose any written notices of violations it has issued to BIDs, as well as the actions taken by BIDs to correct these concerns.
The City Council should hold oversight hearings at least once each year to review the SBS’s oversight of BIDs with contracts up for renewal.
Care should be taken during the formation process that new BIDs will have sufficient size and resources to operate efficiently.
Key Data
$100 million
— Total BID assessment revenues collected in fiscal year 2016.
74
— Number of Business Improvement Districts in New York City as of August 2017.
$134 million
— Total revenue collected by BIDs from all sources in fiscal year 2016.
$106 million
— Revenue generated from the special assessment fee in fiscal year 2016.
$838
— Median BID assessment fee for properties in fiscal year 2016.
$2,670
— Median BID charge for properties in the six BIDs with annual expenses exceeding $5 million.
New York City faces a $95 billion liability for retiree health benefits, a burden that continues to grow as the city pays for these costs on a pay-as-you-go basis rather than prefunding them. To address this fiscal challenge, the city should significantly reduce the cost of the benefit package to align with other municipalities and implement more systematic prefunding policies.
Recommendations related to City Spending Trends
Require workers who retire before Medicare eligibility to pay 50 percent of their health insurance premium.
No longer reimburse for Medicare Part B premiums.
Lower the Medicare Part B reimbursement from full reimbursement to 50 percent.
End benefits for spouses of retirees to reduce the normal cost and current outlays.
Reduce to 50 percent the premium payments for Medicare supplemental insurance.
Replace the full premium payments on behalf of retirees and spouses with a voucher to be used for purchase of insurance.
Increase the retirement age for police and firefighters to match teachers’ retirement age of 55.
Provide a fixed payment to municipal employee unions and authorize them to provide retiree health benefits.
Key Data
$95 billion
— Total OPEB liability for New York City.
$30,000
— Current OPEB debt for each household in New York City.
$4.9 billion
— Current annual normal cost for OPEB benefits.
$2.5 billion
— Current annual PAYGO amount for retiree health benefits.
$150,000
— Average OPEB liability per member (employees and retirees).
$10,950
— Average annual OPEB cost for retirees not yet eligible for Medicare.
New York City's waste management system is currently inefficient and expensive, with initiatives like the organics program suffering from low participation and high costs per ton. To improve fiscal responsibility and operational efficiency, the city should implement cost-saving measures such as route redesigns, automated collection, and the elimination of unproductive productivity bonuses.
Recommendations related to City Spending Trends
The City should implement a slower rollout of the organics program, limiting it to districts that can generate sufficient tonnage to avoid requiring additional collection days.
The City should promote the use of in-sink disposers in select districts to divert organic waste from landfills without requiring curbside collection.
The City should switch to single-stream recycling as expeditiously as possible to boost the diversion rate and improve collection efficiency.
The City should allow greater flexibility in the frequency of collection, scheduling, and recycling practices, including redesigned routes.
The City should expand the use of large containers and automated trucks to improve waste collection efficiency.
The City should eliminate 'unproductive' productivity bonuses for tons collected per truck shift and for dumping on shift, which are a function of the route rather than worker productivity.
Key Data
81.4 tons
— Average amount of organics collected per day by the Department of Sanitation in fiscal year 2017.
0.8 percent
— Share of all refuse collected at the curb that consisted of organics in fiscal year 2017.
$3,000
— Estimated cost of a single truck run for refuse and recycling collection.
17 percent
— The current recycling diversion rate, representing the share of curbside waste that is recycled.
$640
— Cost per ton for the Department of Sanitation to collect recyclable material.
$282
— Cost per ton for the Department of Sanitation to collect refuse.
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…
New York City has significantly increased funding for preventive services intended to reduce foster care placements, with projected spending reaching $313 million in fiscal year 2018. Despite this growth, current public reporting is insufficient to determine if these services effectively reduce child maltreatment or foster care entry, necessitating more rigorous outcome-based evaluation before further investment.
Recommendations related to City Spending Trends
Further investment in preventive services should be contingent upon a more thorough public reporting on outcomes.
The City Council should work with ACS to expand the required indicators to measure outcomes rather than just outputs.
Reporting should differentiate between the different service models and case severity so that there is a better understanding of what works best for which populations.
ACS’s performance should be evaluated consistently, using data and metrics, rather than in response to headlines of tragic cases that focus the public’s attention.
Key Data
$313 million
— Projected spending on preventive services in the fiscal year 2018 Adopted Budget.
42 percent
— Increase in spending on preventive services from Mayor Bill de Blasio’s first year in office.
$125
— Average daily cost per child in foster care in fiscal year 2015.
$24
— Average daily cost per child in preventive services in fiscal year 2015.
63.5 percent
— Decline in foster care entries between fiscal years 2000 and 2016.
17.0 percent
— Repeat substantiated maltreatment rate over the last 8 years.
The Mayor's proposal to increase the personal income tax to fund MTA capital spending is an inappropriate revenue source, as city taxpayers already contribute 40% of the mass transit budget. Instead, long-term capital needs should be addressed through congestion pricing or motorist charges, and low-income MetroCard subsidies should be covered by existing city resources.
Recommendations related to City Spending Trends
New funding streams to support the transit system’s long-term capital needs should come from motorists through congestion pricing or other charges for motor vehicle use.
The proposed half-price MetroCard program for low-income riders should be funded with existing City resources rather than a new tax.
Key Data
40%
— New York City taxpayers already provide approximately 40% of the mass transit budget through the payroll mobility tax and other taxes.
New York City's fiscal year 2018 budget reflects continued growth in spending and headcount despite a partial hiring freeze, with total spending reaching $87.3 billion. To manage fiscal uncertainty, the city should prioritize operational efficiencies, limit new spending, and address rising compensation and health insurance costs through labor negotiations.
Recommendations related to City Spending Trends
Regular deposits to the Retiree Health Benefits Trust should be considered, and efforts to grow the fund should be guided by standards for deposits and withdrawals.
Any additional raises should be paid for with productivity gains, which also necessitate settling the contracts promptly, as those gains can only be prospective.
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.
The City should limit new spending and achieve more savings, tax reductions, and reserves.
Agencies need to step up efforts to make their operations more cost-effective by implementing efficiencies.
Key Data
$87.3 billion
— 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
— Expected surplus at the end of fiscal year 2017 to be used to prepay fiscal year 2018 expenses.
329,055
— Expected headcount in fiscal year 2018.
$160,000
— Projected average compensation per employee by fiscal year 2021.
$140,000
— Average compensation per employee in the current year.
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?
New York City's fiscal year 2018 budget includes a $1.5 billion savings program, yet many agencies contribute little to these efficiency efforts. To address budget risks and economic uncertainty, the city should mandate agency participation in savings programs to ensure recurring, long-term fiscal improvements.
Recommendations related to City Spending Trends
City agencies should similarly review their operations to enhance productivity and reduce expenses.
The city should reinstate mandatory savings requirements for agencies, as voluntary participation has resulted in limited efficiency gains.
The city should continue to put substantial effort into reducing expenses in light of federal budget risks and a slowing economy.
Key Data
$1.5 billion
— Total value of the Citywide Savings Program in fiscal year 2017.
$31 million
— Savings identified by the Office of Management and Budget's Savings Unit for fiscal year 2018.
$124 million
— Projected savings from Office of Management and Budget initiatives by fiscal year 2021.
$378 million
— Potential savings in fiscal year 2018 if all agencies achieved efficiencies equal to 1% of their city-funded expenditures.
$59 million
— Efficiency savings generated by the Department of Education in fiscal year 2018.
The Fiscal Year 2018 Executive Financial Plan requires fiscal prudence due to economic uncertainty, necessitating a focus on restraining spending growth and improving efficiency. Key strategies include mandatory agency participation in savings programs, curbing new initiatives, and reforming labor negotiations to control rising personnel and overtime costs.
Recommendations related to City Spending Trends
The City should increase efficiency savings as part of the Citywide Savings Program.
The Administration should restrain spending growth to ensure fiscal stability.
The City should direct savings to bolster reserves to better weather a potential recession.
The City should improve the capital planning process to ensure realistic scheduling and better assessment of needs.
The City should require productivity gains in exchange for raises during upcoming labor negotiations.
The City and municipal labor unions should continue the effort to find more health insurance savings during the next contract period.
The City should pursue strategies that reduce overtime costs as a part of the labor negotiations.
The Administration and City Council should postpone, curb, or offset new initiatives given the uncertain economic climate.
The City should establish guidelines to require annual deposits and limit withdrawals to special circumstances for the Retiree Health Benefit Trust.
Key Data
$1.5 billion
— CSP projected annual savings in fiscal year 2017.
$1.1 billion
— City-funded new needs in fiscal year 2018.
$1.7 billion
— Actual annual overtime spending in fiscal years 2015 and 2016.
$400 million
— Efficiency savings of 1 percent of city-funded agency budgets.
8.1 percent
— Projected annual growth rate for health insurance costs from fiscal years 2018 through 2021.
$1.25 billion
— Current annual level of the City's reserves.
This 2017 survey of New York City residents gauges public perception of government services and quality of life, finding that only 20.8% of respondents believe the city spends tax dollars wisely. The report provides a comprehensive breakdown of resident satisfaction across various municipal services, safety indicators, and quality of life metrics.
Key Data
20.8%
— Proportion of residents who believe the city spends tax dollars wisely.
44.0%
— Proportion of residents who rate the overall quality of New York City government services as excellent or good.
40.7%
— Proportion of residents who believe the city promotes the economic growth of New York City.
The School Bus Grant Program, which provides supplemental funding to school-bus companies beyond their competitively bid contracts, has been extended for a third year at a cost of over $30 million. This program undermines the integrity of the city's contracting system and increases taxpayer costs without providing additional benefits, prompting calls for the City Council to defund it.
Recommendations related to City Spending Trends
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 bring the School Bus Grant Program to a stop to protect taxpayers.
Key Data
$1 billion
— Annual cost of school-bus transportation contracts prior to the 2012 re-bidding process.
$400 million
— Savings achieved by the city through the re-bidding of school-bus transportation contracts without previous employee protections.
$30 million
— Projected cost of the School Bus Grant Program for its third year of operation.
In fiscal year 2016, New York City employed approximately 283,000 full-time workers with an average total pay of $76,064. Uniformed employees earned the highest average annual pay at $109,000, significantly bolstered by overtime payments, compared to $66,500 for civilian employees and $70,000 for pedagogical staff.
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 projects for libraries and cultural institutions are plagued by excessive delays and high costs, with median new construction projects costing $930 per square foot and taking over four years to complete. These inefficiencies stem from a complex, multi-agency oversight process and outdated procurement rules that prioritize the lowest bid over value, necessitating fundamental reforms to project management and funding strategies.
Recommendations related to City Spending Trends
Create a task force to review and reform the capital construction process.
Start systematically tracking capital project costs and timelines.
Streamline project approval practices and reduce redundancies between OMB and DDC.
Simplify the design review process at DDC.
Strengthen DDC’s data analytics team to inform smarter decision-making.
Institute a process for nonprofits to prequalify for discretionary capital funds.
Establish dependable funding for capital construction projects, including routine state-of-good-repair investments.
Standardize and disseminate capital eligibility rules and requirements.
Allow appropriate capital projects to be contracted through a design-build process.
Improve contracting by assessing value rather than defaulting to the lowest bid.
Key Data
$930
— Median cost per square foot for new library and cultural buildings in the sample.
1,550 days
— Median time taken for the analyzed capital projects to reach completion.
144
— Number of DDC-managed capital projects at cultural institutions and libraries analyzed from fiscal years 2010 to 2014.
$1,272
— Average cost per square foot for ground-up construction projects managed by the city.
$641
— Average cost per square foot for ground-up construction projects managed by the New York Public Library.
36%
— Share of analyzed capital projects that took more than five years to complete.
The Fair Fares proposal, which would provide half-price transit fares for low-income residents, is estimated to cost $212 million in foregone revenue. Given that this amount represents less than one half of one percent of the city's $84.7 billion operating budget, the city should prioritize funding this initiative to support economic mobility.
Recommendations related to City Spending Trends
The Fair Fares proposal to subsidize fares for low-wage workers is worth enacting, and the costs of providing this subsidy should be borne by New York City.
If the mayor supports the policy, it should be a priority that is accommodated within the city’s financial plan.
A broad tax base that draws resources from all wealthier New Yorkers, not just those relying on the subway, should back the commitment to broader opportunity rather than subsidizing services to the poor with higher fares for other riders.
Key Data
$1,452
— Annual cost of a monthly MetroCard for low-income residents.
$212 million
— Estimated cost of the Fair Fares proposal in foregone fare revenue.
$100 million
— Annual cost to the city for providing discounted MetroCards to students and senior citizens.
$130 million
— Yearly cost to the city for subsidizing paratransit for users who are disabled.
$1 billion
— Total annual operating funds provided by the city to the MTA.
$84.7 billion
— New York City’s total operating budget.
Spending on New York City homeless services has surged by 77 percent since fiscal year 2014, reaching $2.3 billion in fiscal year 2017, with costs for shelters, prevention, and re-housing all seeing significant increases. Despite optimistic budget projections suggesting a decrease in future spending, consistent growth in caseloads suggests that current expenditure levels are likely to continue rising without a clear strategy for sustainability.
Recommendations related to City Spending Trends
The Administration should address how much more growth in the homeless population served is actually anticipated and provide milestones against which to measure progress towards more sustainable spending.
The Administration must address how much more growth in homeless services spending will be acceptable.
Any new strategy for service redesign or expansion in this area should be accompanied by milestones for reducing spending to sustainable levels.
Key Data
$2.3 billion
— Total spending on homeless services by all New York City agencies in fiscal year 2017.
77 percent
— Increase in spending on homeless services 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
— Spending on services for the street homeless in fiscal year 2017.
The Citywide Savings Program has identified $3.8 billion in savings through fiscal year 2021, yet less than 10 percent of these savings stem from operational efficiency improvements. To better hedge against budget risks, the administration should prioritize recurring productivity gains over debt service re-estimates when identifying the next $500 million in required savings.
Recommendations related to City Spending Trends
The Office of Management and Budget should ensure that the additional $500 million in savings comes from improving government productivity in ways that generate recurring savings to serve as a meaningful hedge against budget risks.
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 in the Preliminary Budget for Fiscal Year 2018 to be achieved in fiscal years 2017 to 2021.
9.7%
— Portion of total savings derived 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, representing less than 10 percent of the Citywide Savings Program.
1.1%
— Total savings as a percentage of city-funded expenditures.
$1.2 billion
— Amount of savings occurring in the current fiscal year, representing 32 percent of the total.
New York City's program providing supplemental grants to school bus contractors undermines the integrity of the competitive bidding process by offering payments beyond the terms of existing contracts. This recurring funding, originally intended as a temporary measure, creates a problematic precedent for other city vendors to seek similar contract enhancements.
Recommendations related to City Spending Trends
The administration should discontinue the program providing grants to school bus transportation companies.
New York City's fiscal year 2018 budget reaches a record $87.1 billion, marking a 17% increase since the end of the Bloomberg administration, while municipal employment has grown by 9% to over 327,000. Despite this expansion, only 18% of the Citywide Savings Plan consists of efficiency measures, highlighting a need for better management of agencies experiencing significant expenditure growth.
Recommendations related to City Spending Trends
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 municipal spending in fiscal year 2018.
17%
— Increase in municipal spending from Mayor Michael Bloomberg’s last budget.
327,000
— Total municipal employment level.
9%
— Increase in municipal employment from January 2014.
18%
— Portion of the Citywide Savings Plan comprised of efficiency measures.
Rising transit fares in New York City disproportionately burden low-income residents, creating a barrier to employment and economic mobility. Implementing a half-price fare program for those at or below the federal poverty threshold, funded by the city, would improve affordability and support the city's labor force.
Recommendations related to City Spending Trends
The city should implement half-price fares for working-age adults who have incomes at or below the federal poverty threshold to match the discount available to senior citizens.
The mayor and City Council should cover the estimated $200 million annual cost of the fare discount program as part of their strategy to make New York more affordable.
The city’s Human Resources Administration should determine eligibility for reduced fares because it already verifies incomes for social-service programs.
Key Data
$200 million
— annual cost of forgone fares for the proposed discount program
$1,452
— annual cost of a monthly MetroCard after the scheduled fare increase
$1 billion
— annual city contribution to the MTA’s operating budget
$300 million
— annual city contribution for reduced fares for seniors, students, and paratransit users
25%
— percentage of low-income residents who were often unable to afford transit fares in 2015
$121
— projected cost of a monthly MetroCard following the scheduled fare increase
The 2016 Benefit Sweetener Scorecard identifies over 60 active legislative bills that could cost state and local governments hundreds of millions of dollars annually. Because approximately half of these bills fail to specify a fiscal impact, the actual financial burden on taxpayers could be substantially higher than currently estimated.
Key Data
60
— Number of bills active in the 2016 session identified by the Benefit Sweetener Scorecard.
The de Blasio administration's performance across ten key service areas is evaluated by analyzing how increased agency funding and staffing levels have impacted outcomes like crime rates, emergency response times, and housing production. While resources have grown significantly in departments such as the Department of Homeless Services and the Department of Education, preliminary data often show mixed results in achieving intended policy goals.
Key Data
$1.2 billion
— Increase in Department of Education funding for the 2015-2016 school year.
$748 million
— City capital funding for the Department of Housing Preservation and Development in fiscal year 2016.
13 percent
— Increase in the Department of Homeless Services budget in fiscal year 2016 over fiscal year 2015.
14 percent
— Growth in Department of Correction spending in fiscal year 2016.
7 percent
— Increase in New York City Police Department funding in fiscal year 2016 over 2015.
Governor Cuomo should veto 10 bills that would expand government employee and retiree benefits, as these measures would increase public costs and undermine fiscal restraint. These proposed enhancements, including changes to early retirement and disability benefits, threaten to erode the savings achieved through recent pension reforms.
Recommendations related to City Spending Trends
The Governor should veto A9702/S7023, which would eliminate required employee contributions in the New York State Retirement System and the Local Police and Fire Retirement System, shifting costs to taxpayers.
The Governor should veto A6612b/S4001b, which would allow counties to offer correction officers and deputy sheriffs a pension equal to 50 percent of salary after 20 years of service.
The Governor should veto A9440/S6936, which would allow State Court peace officers to retire after 30 years of service if they are at least 55 years old without a diminution of pension benefits.
The Governor should veto A5133c/S1000d, which would increase payments for total disability benefits to $600 from $400 per week for volunteer firefighters and ambulance drivers.
The Governor should veto A7146a/S5012a, which would extend the deadline to file for accidental disability retirement benefits from two to five years for firefighters across the State.
The Governor should veto A7784/S5762, which would provide cash and medical benefits for State parole officers injured in the line of duty equal to full salary.
The Governor should veto A10030/S7216a, which would expand the presumption that a medical condition was caused by public sector employment to include heart disease experienced by Department of Environmental Conservation police and forest rangers.
The Governor should veto A10614/S8071, which would expand the presumption that a medical condition was caused by public sector employment to include heart disease, lung disease, and certain forms of cancer experienced by uniformed officers in the New York State Division of Military and Naval Affairs.
The Governor should veto A10003/S7386, which would eliminate restrictions on transferring between New York City public retirement systems.
The Governor should veto A10369a/S7174b, which would allow certain members of the New York State Retirement System and the Local Police and Fire Retirement System to opt out of Tier 3 and into Tier 5.
Key Data
6.6%
— The percentage of salaries shifted from employees to state and local taxpayers under A9702/S7023.
7%
— The maximum percentage of salaries that A6612b/S4001b would cost counties.
$100,000
— The first-year cost to the State for A9440/S6936.
$600
— The proposed weekly payment for total disability benefits for volunteer firefighters and ambulance drivers under A5133c/S1000d.
$244,000
— The cost for the individual known to be impacted by A7146a/S5012a.
New York City's legacy costs, including debt service, pensions, and retiree health benefits, are projected to exceed $20 billion by fiscal year 2020, growing at a rate that significantly outpaces other budget expenditures. To address this, the city should implement reforms to retiree health benefits, union welfare funds, and Medicare Part B reimbursements to achieve up to $1.6 billion in savings.
Recommendations related to City Spending Trends
Retirees should share in the cost of health premiums to align benefits with other state and local governments.
Reform of union welfare funds is needed by consolidating supplementary health care benefits under the City’s health plan to improve efficiency.
Medicare Part B premium reimbursements should be eliminated as this benefit is uncommon among public employers.
The City should prorate the retiree health subsidy according to length of service, similar to other state and local governments.
Key Data
$20 billion
— Projected annual spending on legacy costs by fiscal year 2020.
20 percent
— The portion of the city budget already exceeded by legacy costs.
$17.4 billion
— Current annual spending on legacy costs.
$20.9 billion
— Projected annual spending on legacy costs.
11 percent
— The projected growth rate of all other city spending.
$1.6 billion
— Potential savings by fiscal year 2020 if recommended reforms are implemented.
Legacy costs in the New York City budget, including debt service, pension contributions, and retiree health benefits, are projected to grow by 20 percent to over $20 billion by fiscal year 2020. To manage this growth, the city should implement reforms to retiree health benefits, such as requiring premium contributions and eliminating Medicare Part B reimbursements, which could save up to $1.6 billion.
Recommendations related to City Spending Trends
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 to align with practices in other municipal governments.
Reform of union welfare funds is needed because the funds are inefficient, poorly managed, and unaccountable.
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 unheard of in the private sector and uncommon among public employers.
Key Data
$20.9 billion
— Projected legacy costs in fiscal year 2020.
$1.6 billion
— Potential savings by fiscal year 2020 from implementing recommended reforms to retiree health benefits.
$8.4 billion
— Projected debt service payments in fiscal year 2020.
$17.4 billion
— Legacy costs in fiscal year 2016.
$2.9 billion
— Annual cost of retiree health benefits by fiscal year 2020.
$3.4 billion
— Total expected savings from the partnership between the City and the Municipal Labor Committee to reduce health care costs.
Expanding New York City's residential organics collection program citywide could increase annual costs to between $177 million and $250 million, significantly outpacing the current $19 million two-year pilot cost. To ensure long-term sustainability and fiscal responsibility, the city should prioritize more limited strategies, such as utilizing in-sink disposers in appropriate neighborhoods and optimizing collection routes to avoid additional expenses.
Recommendations related to City Spending Trends
The city should consider in-sink disposers in select neighborhoods with adequate wastewater treatment plant infrastructure.
The Department of Environmental Protection and DSNY should collaborate to carefully study and identify neighborhoods where in-sink disposers could be used without burdening wastewater treatment infrastructure.
The city should expand curbside collections only where and when additional collection routes are not required.
The DSNY could expand the curbside organics collection program while avoiding additional collection routes by replacing a weekly refuse pickup with an organics pickup or collecting refuse and organics simultaneously.
Achieving such efficiencies would require City Council approval and a significant boost to participation rates.
Key Data
$19 million
— Cost of the residential organics pilot program over two years.
$177 million
— Low-end estimate of annual costs if the curbside program were expanded citywide.
$250 million
— High-end estimate of annual costs if the curbside program were expanded citywide.
88,000
— Number of new truck shifts projected to be needed each year under current collection practices.
16,000 tons
— Amount of organic waste diverted from landfills over two years by the pilot program.
55 percent
— Percentage of NYC households served by treatment plants with sufficient capacity to deal with food sludge.
New York City's planned spending through fiscal year 2020 is set to increase by $17.9 billion, or 24 percent, driven primarily by rising personal service costs like salaries, wages, and health insurance. While the pace of expenditure growth is slower than during the first seven years of the Bloomberg administration, it remains faster than the latter seven years, with the Department of Education accounting for half of the city-funded agency spending increases.
Key Data
$17.9 billion
— The total planned spending increase from 2014 to 2020 among the major objects of expenditure.
24 percent
— The total planned increase in spending through fiscal year 2020.
$11.7 billion
— The portion of the spending increase accounted for by personal service costs, which is the largest category.
$158,258
— The average compensation cost per employee in fiscal year 2020.
$2.8 billion
— The increase in Department of Education spending, which accounts for half of the total agency spending increase.
$669 million
— The increase in Police Department spending, representing one of the two largest increases among criminal justice agencies.
New York City's June 2016 financial plan snapshot provides projections for tax revenues, expenses, headcount, debt service, and savings initiatives, including the health savings agreement and the Citywide Savings Plan.
The Citywide Savings Program proposes $5.4 billion in multiyear savings, yet only 16 percent of these savings stem from actual agency efficiency measures, with the remainder relying on debt service reductions, Medicaid payment claims, and spending re-estimates. To improve government efficiency, the administration must shift its focus toward strategic initiatives that provide lasting value to taxpayers rather than relying on uncertain or one-time accounting adjustments.
Recommendations related to City Spending Trends
The administration should continue to build on the progress in the CSP by focusing more on efficiency initiatives.
Agencies should think strategically and creatively about how to provide value to taxpayers and do more with less.
Key Data
$5.4 billion
— Total multiyear savings proposed in the latest Citywide Savings Program.
$1.5 billion
— Savings claimed from a reduced payment to the State for the City’s share of the Medicaid program.
$883 million
— Total savings derived from agency efficiency measures, representing 16 percent of the total plan.
$1.0 billion
— Savings derived from reductions in required debt service payments.
$1.8 billion
— Savings from an amalgam of spending re-estimates, funding shifts, spending delays, and accruals.
$2.9 billion
— Multiyear savings proposed in the previous year’s Executive Budget.
The New York City Fire Department allocates the vast majority of its resources to firefighting despite the fact that medical emergencies now constitute the overwhelming majority of service calls. To address this inefficiency, the department should integrate fire and emergency medical services more fully, including cross-training firefighters as EMTs and reforming ambulance staffing models to better align resources with actual service demands.
Recommendations related to City Spending Trends
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.
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 subsidize the training for all current firefighters (about $1,200 per person) to increase the number of EMT-trained personnel.
The FDNY should fundamentally reorganize the department to rebalance the financial and human resources provided for each type of service.
Key Data
$3.8 billion
— The total budget for the FDNY in fiscal year 2015.
71 percent
— The portion of the FDNY budget devoted to staffing fire units in fiscal year 2015.
$500 million
— The annual funding allocated to EMS operations.
$5 million
— The estimated annual savings from changing ALS ambulance staffing to one paramedic and one EMT.
$6.8 million
— The estimated average annual cost of operating an engine company in fiscal year 2015.
$8.6 million
— The estimated average annual cost of operating a ladder company in fiscal year 2015.
The New York City Department of Sanitation's operations and costs, including collection and disposal expenses as well as recycling and organic waste capture rates, are detailed in this overview.
The dispute over the Sales Tax Asset Receivable Corporation (STARC) involves $600 million in sales tax revenue that the State seeks to withhold from New York City following the City's decision to borrow extra funds during a bond refunding. Rather than a simple transfer of these funds, the contested money should be utilized to pay down long-term debt, providing lasting savings for both City and State taxpayers.
Recommendations related to City Spending Trends
The best outcome of this dispute would be to return the contested money to City and State taxpayers in the form of long-term savings.
The resolution of the current controversy should not be in favor of the State’s or City’s claim to the contested $600 million, nor a “splitting of the baby” to give half to each.
The money should be put to a use that yields longer term savings for taxpayers, which is an appropriate goal of a bond refunding.
This can be achieved by paying off outstanding debt that requires debt service payments over a period longer than three years and closer to the duration of the STARC bonds.
A negotiated division between the City and State should be reached to give relief to city and state taxpayers over the longer term.
Key Data
$600 million
— The amount of sales tax revenue the State proposes to divert from the City.
$2.5 billion
— The amount of outstanding Municipal Assistance Corporation debt that STARC was created to pay off.
$637 million
— The amount of extra cash the City borrowed during the STARC bond refunding.
$170 million
— The annual amount the State guaranteed to repay the STARC debt.
$500 million
— The City's annual debt service burden eliminated by the STARC deal.
The Citywide Savings Program, intended to improve municipal efficiency, is currently too small and lacks sufficient initiatives that generate recurring savings. While the program aims for $1.9 billion in savings through 2019, this represents only 0.6 percent of total city-funded spending, significantly less than the savings achieved under previous administrations.
Recommendations related to City Spending Trends
The Mayor should set a higher goal for the Citywide Savings Program in his Executive Budget.
The Citywide Savings Program should be expanded in the Executive Budget as a high priority.
The City should require all agencies to participate in the savings program, including those that have not yet done so, such as the Fire Department and the Department of Environmental Protection.
The City should prioritize initiatives that achieve recurring savings by making agency operations more efficient.
Key Data
$1.9 billion
— planned savings over fiscal years 2016 to 2019
0.6 percent
— planned savings as a percentage of total city-funded spending
$270 million
— amount of 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
$1.2 billion
— spending re-estimates and funding shifts that substitute federal or state grants for local resources
2.6 percent
— the high end of the range for PEG savings as a percentage of total city-funded spending under Mayor Bloomberg from 2011 to 2014
The New York City Fire Department's budget is disproportionately allocated toward fire operations despite the vast majority of its workload consisting of medical incidents. To address this imbalance and improve emergency response capacity, the department should reallocate resources by modifying ambulance staffing models and requiring EMT certification for firefighters.
Recommendations related to City Spending Trends
Modify Advanced Life Support (ALS) ambulance staffing to one paramedic and one emergency medical technician (EMT) for more efficient response.
Increase medical training for firefighters, allowing them to handle more emergencies without reliance on a subsequent ambulance and its staff.
Key Data
75 percent
— FDNY’s workload consisting of medical incidents.
5 percent
— FDNY’s workload consisting of fire incidents.
56 percent
— Portion of the agency’s budget spent on fire operations.
28 percent
— Portion of the agency’s budget spent on medical service.
$5 million
— Estimated annual savings from modifying ALS ambulance staffing.
81
— Daily ambulance tours the city must cover following the loss of TransCare service.
New York City's fiscal year 2017 budget proposal increased city-funded spending by $2.7 billion while offering a Citywide Savings Program that only accounts for 0.6 percent of spending over five years. To prepare for potential economic downturns, the city needs to implement more robust savings initiatives that focus on long-term operational efficiencies rather than one-time adjustments.
Recommendations related to City Spending Trends
The Mayor should ask agencies to identify operational efficiencies that provide recurring savings to increase its budget cushion and guard against economic uncertainty.
The City should include much more in the way of agency savings from initiatives that improve operations and provide recurring savings in the Executive Budget.
The City should exercise spending restraint and build reserves regularly and well in advance of a potential downturn.
Key Data
$2.7 billion
— The amount by which the fiscal year 2017 budget proposal increased city-funded spending.
$1.9 billion
— The total value of new savings initiatives proposed in the fiscal year 2017 Citywide Savings Program over fiscal years 2016 to 2020.
0.6 percent
— The share of city-funded spending that the fiscal year 2017 Citywide Savings Program savings amount to during the 2016 to 2020 period.
$7.9 million
— The total value of initiatives to make agencies more efficient in fiscal year 2016.
45 percent
— The amount the Chinese stock market has dropped since its peak in June.
70 percent
— The amount the price of a barrel of oil has dropped since June 2014.
New York City's residential waste management costs taxpayers $1.7 billion annually, and expanding organic waste diversion programs could add between $177 million and $251 million in new annual costs. To achieve environmental goals without excessive spending, the city should limit curbside collection to neighborhoods where it does not require additional routes and consider encouraging the use of in-sink food waste disposers in areas with adequate wastewater infrastructure.
Recommendations related to City Spending Trends
The City should expand curbside collections only where and when additional collection routes are not required to avoid unnecessary costs.
The City should consider encouraging use of in-sink disposers in select neighborhoods with adequate wastewater treatment plant infrastructure and capacity to reduce garbage collection.
Municipal leaders should fundamentally alter collection routes and practices to reduce residential trash collection costs as part of any organics diversion program.
The City should collaborate with the City Council to ensure high levels of residential usage and resolve cost distribution for in-sink disposer installation.
The City should explore operational efficiencies or partnerships with the private sector to allow for cost-effective program expansions in additional neighborhoods.
Key Data
$1.7 billion
— Annual cost to taxpayers for managing residential trash.
$177 million to $251 million
— Estimated new annual costs for citywide residential curbside organics collection.
88,000
— Number of new truck-shifts needed each year for expanded curbside collection.
$4 million
— Annual savings from using in-sink disposers in four specific sanitation districts.
17,000 tons
— Amount of food waste diverted annually by using in-sink disposers in four specific sanitation districts.
$45 million
— Annual cost for the purchase, installation, and operation of in-sink food waste disposers.
Expanding New York City's organic waste program citywide would cost between $177 million and $250 million annually, representing a 10 to 15 percent increase on the current $1.7 billion residential waste collection budget. To mitigate these expenses, the city should pursue strategies such as targeted curbside collection, expanded use of in-sink disposers, and long-term cost reductions through contract negotiations or private competition.
Recommendations related to City Spending Trends
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
$19 million
— Cost of the current organic waste program over two years.
$177 million to $250 million
— Estimated annual citywide cost to expand the organic waste program.
10 to 15 percent
— Projected increase on the $1.7 billion cost of residential waste collection and disposal.
$1.7 billion
— Current annual cost of residential waste collection and disposal.
New York City's $82 billion preliminary budget increases spending by 4.5 percent without raising tax rates, relying on economic growth rather than a robust savings plan. To ensure long-term fiscal health, the city must aggressively pursue agency efficiencies and increase reserves rather than relying on static savings levels.
Recommendations related to City Spending Trends
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.
Additional deposits to the retiree health benefits trust fund should be made this year as well.
Key Data
$82 billion
— The size of the preliminary budget unveiled by the mayor.
4.5 percent
— The increase in city-funded spending, including budget reserves and after adjusting for debt prepayments.
$400 million
— The amount of agency savings included in the fiscal year 2016 budget.
$269 million
— The amount of agency savings included in the fiscal year 2017 budget.
5 percent
— The target for agency savings that City Council members have called on the mayor to set.
$1.5 billion
— The current level of city reserves.
Mayor de Blasio's plan to raise wages to $15 an hour for public and contracted nonprofit employees will cost $238 million through fiscal year 2020 without securing offsetting productivity improvements or service enhancements. This approach of amending existing contracts mid-stream undermines the integrity of the City's competitive bidding process and sets a concerning precedent for fiscal management.
Recommendations related to City Spending Trends
The City should ensure that changes to labor and vendor contracts wait until they expire and are up for renewal or renegotiation.
The City should ensure that costs associated with contract amendments are offset with increased productivity or efficiencies to improve service delivery.
The City should ensure that negotiations for reopening contracts are not a one-way street in which taxpayers give but receive nothing in return.
Key Data
$238 million
— Total cost of wage increases through fiscal year 2020 for public and nonprofit employees.
30,000
— Number of nonprofit employees providing city-contracted services receiving wage increases.
10.4 percent
— Compounded wage increase over seven years established by the DC37 labor agreement.
$36 million
— Portion of the $238 million cost allocated to public employees.
$202 million
— Portion of the $238 million cost allocated to nonprofit employees.
4,500
— Number of workers in three job titles whose wages were raised to $11.50 per hour in March 2015.
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, the department should modernize its staffing models, increase medical training for firefighters, and fundamentally reorganize its operations to better align with current service demands.
Recommendations related to City Spending Trends
The FDNY should petition the NYC-REMSCO again to change ALS ambulance staffing to one paramedic and one EMT, which would yield about $5 million in savings.
The department should increase the medical training of firefighters so they can handle more situations without reliance on a separate ambulance and its staff.
It may be preferable to require EMT qualifications for new applicants for firefighter jobs, which would also effectively create a career ladder for advancement among the EMS staff.
The department should fundamentally reorganize the department to redefine the relationships between fire and EMS services and rebalance financial and human resources.
Key Data
$3.8 billion
— The FDNY’s total budget in fiscal year 2015.
$500 million
— The annual funding for EMS operations, representing just 13 percent of the total budget.
$6.8 million
— The estimated average annual cost of operating an engine company in fiscal year 2015.
$8.6 million
— The estimated average annual cost of operating a ladder company in fiscal year 2015.
$519
— The average cost per ALS ambulance response.
$489
— The average cost per BLS ambulance response.
The New York City Police Department's total expenses and headcount are analyzed, with a specific focus on the impact of overtime costs. This examination provides insight into the financial and staffing trends within the department.
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.
The fiscal year 2016 adopted budget for New York City includes approximately $200 million in new spending 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 for additional police, social service providers and other programs in the FY 16 adopted budget
New York City's outstanding debt exceeded $110 billion as of June 2014, and the proposed Ten-Year Capital Strategy for 2016-2025 threatens to further increase debt service costs, which already consume one out of every eight dollars in tax revenue. Because the City lacks a comprehensive needs assessment and performance metrics for its capital projects, it is difficult to determine if these investments are worthwhile or if they will effectively address the city's infrastructure needs.
Recommendations related to City Spending Trends
The City should limit proposed capital spending to clearly defined projects with demonstrable benefits.
The City should link the Ten-Year Capital Strategy to a needs assessment to determine how much progress will be made toward achieving a state of good repair.
The City should provide performance metrics and timelines with milestones for spending plans to track performance and hold agencies accountable.
Key Data
$110 billion
— New York City's outstanding debt as of June 30, 2014.
96 percent
— The growth of New York City's outstanding debt since 2002.
8 percent
— The projected debt service from tax revenues as a percentage of the City's real property values in fiscal year 2016.
13 percent
— The projected debt service from tax revenues as a percentage of the City's personal income in fiscal year 2016.
$83.8 billion
— The total cost of the Mayor's proposed Ten-Year Capital Strategy for Fiscal Years 2016-2025.
30 percent
— The projected increase in debt service paid from the operating budget.
The New York City Housing Authority faces a severe financial crisis with growing operating deficits driven by high costs and insufficient revenue, necessitating a strategic roadmap to improve efficiency and financial stability. This plan includes measures to increase rent collection, generate non-rental income, and streamline management to reduce expenses and bridge the operating gap.
Recommendations related to City Spending Trends
NYCHA should increase rent collection rates to HUD's 95 percent target to generate an estimated $39 million in 2015.
NYCHA can generate more than $26 million annually in non-rental income by increasing parking fees closer to market rate, increasing monthly fees for appliances, expanding commercial activities, and raising rent collections from nonprofit tenants.
Streamlining management to curtail the scope of responsibility for borough offices to non-redundant functions would save $33 million annually by 2019.
Eliminating responsibility for community and senior centers would save $19 million annually and rely on service provision by better-equipped City agencies and nonprofits.
NYCHA can improve productivity by increasing use of Job Order Contracting, which streamlines and shortens the process to perform more routine maintenance.
NYCHA should negotiate work rule changes in collective bargaining to limit overtime compensation for work performed in the evenings and on weekends.
NYCHA should pursue cost savings through private property management companies.
Key Data
$194 million
— Projected operating deficit for NYCHA in 2019.
77 percent
— NYCHA's average rent collection rate.
$320
— Amount by which NYCHA's monthly operating costs per unit exceed those of a private rent-stabilized unit.
$39 million
— Estimated revenue generated in 2015 by increasing rent collection rates to HUD's 95 percent target.
$26 million
— Amount of non-rental income NYCHA can generate annually through increased fees and commercial activities.
$33 million
— Annual savings by 2019 from streamlining management to curtail the scope of responsibility for borough offices.
New York City's ten-year capital strategy lacks sufficient information to justify its $83.8 billion price tag, failing to link investments to specific needs or performance goals. Furthermore, the city's reliance on borrowing to fund these projects has created a high debt burden, with debt service costs growing significantly faster than other operating expenditures.
Recommendations related to City Spending Trends
The Strategy should incorporate information from agency assessments and clearly spell out how much of state of good repair needs will be addressed by the proposed investments, and how quickly.
Specificity regarding project goals and costs is necessary before dollars are appropriated for new initiatives.
The Council should require improved reporting on the rationale for and performance goals of capital spending.
The Council should limit the capital budget to clearly defined projects with demonstrable benefits.
The city should ensure that operating costs or savings are considered and incorporated in the operating budget for all capital projects.
Key Data
$83.8 billion
— Total cost 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.
17 percent
— Projected growth of all other city operating expenditures in the same time period as the debt service increase.
$30 billion
— Amount of new debt the City will issue in the next four years to support the capital plan.
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 spending commitments. While the budget includes a new savings program, the current initiative remains relatively small and requires more aggressive action to improve municipal service efficiency.
Recommendations related to City Spending Trends
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 greater than anticipated last June
$1,030 million
— total increase in reserves for potential adverse developments
$700 million
— added commitments for multiple social service, housing, and other programs in fiscal year 2016
$500 million
— creation of a new capital program fund
$280 million
— increase in the Retiree Health Benefit Trust
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 to manage these potential shortfalls. Implementing these targets, known as Programs to Eliminate the Gap, is essential for maintaining fiscal discipline and preparing for future economic downturns.
Recommendations related to City Spending Trends
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 efforts are prioritized.
City management should include a continuous search for ways to achieve savings by making service delivery more efficient, even in a strong economy.
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 proactive fiscal planning. Despite a reluctance to use traditional "Program to Eliminate the Gap" terminology, the administration should implement strategies to ensure balanced budgets and improve service delivery efficiency.
Recommendations related to City Spending Trends
Mayor de Blasio should begin planning for how to close these gaps and cope with any unexpected adverse conditions as well as new needs that may emerge.
The Mayor would be better off giving the beloved a new name and presenting a financial plan that includes significant savings from new efficiencies in service delivery.
Mayor de Blasio’s next financial plan should be creative both in naming his strategy to reflect a progressive spirit and in identifying ways to keep the budget balanced and make service delivery more efficient in the future.
Key Data
$1.0 billion
— Projected budget gap in fiscal year 2017.
$2.1 billion
— Projected budget gap in fiscal year 2019.
$6.5 billion
— Savings in fiscal year 2014 attributed to PEGs implemented from fiscal years 2008 to 2013.
$4.8 billion
— Unprecedented PEG in Year 1 of Mayor Bloomberg’s first financial plan.
$2.1 billion
— PEG amount in the last year of the Dinkins administration.
New York City's health insurance costs have doubled since 2005, reaching $5.3 billion in 2015 and prompting a $3.4 billion savings agreement with the Municipal Labor Committee. Instead of implementing structural changes to bend the cost curve, the City is claiming savings based on lower-than-expected premium increases, which diverts funds that could otherwise support general budget priorities like libraries and parks.
Recommendations related to City Spending Trends
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, ensuring that lower national and regional health care inflation, temporary premium rate 'freezes,' and unusually low premium increases are not credited as savings gained under the agreement.
The City should pursue initiatives such as reducing emergency room utilization and improving chronic disease management, which can improve health outcomes for the City’s workforce and save money for the City’s taxpayers.
Key Data
$2.6 billion
— Cost of the City's health insurance plan in fiscal year 2005.
$5.3 billion
— Cost of the City's health insurance plan in fiscal year 2015.
6.7 percent
— Portion of the 2015 budget comprised by health insurance costs.
$3.4 billion
— Total savings target agreed upon by the City and the Municipal Labor Committee between fiscal year 2015 and 2018.
9 percent
— Annual rate at which the financial plan projected health insurance spending to increase.
2.89 percent
— Actual rate increase for health insurance in fiscal year 2016.
New York City's Law Department expenditures are projected to reach $180 Million in fiscal year 2016, while citywide judgments and claims are forecasted to hit $710 Million. The NYPD accounts for the largest share of these settlements and judgments, representing 39% of the total in fiscal year 2014.
Key Data
$180 Million
— The forecasted Law Department expenditures for fiscal year 2016.
$710 Million
— The forecasted NYC judgments and claims for fiscal year 2016.
1,542
— The forecasted number of Law Department employees for fiscal year 2016.
$732 Million
— The total NYC judgments and claims recorded in fiscal year 2014.
39%
— The share of settlements and judgments attributed to the NYPD in fiscal year 2014.
22%
— The share of settlements and judgments attributed to the HHC in fiscal year 2014.
New York City's current waste management system costs taxpayers $1.5 billion annually, prompting calls for a variable fee structure to incentivize waste reduction and fund disposal infrastructure. Implementing a phased, usage-based garbage fee system could align costs with usage, reduce landfill reliance, and support environmental goals.
Recommendations related to City Spending Trends
The City should implement 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 garbage fees.
The fees could initially be pegged to the cost of disposal, which is about $7 per month for the average New York City household.
Bag or sticker programs could be used for large apartment buildings, and rebates could offset the new fees.
Key Data
$300 million
— Annual cost of landfilled trash managed by New York City's Department of Sanitation.
1 million tons
— Amount of greenhouse gas emissions produced by landfilled trash managed by the Department of Sanitation.
13,500
— Number of tanker trucks of gasoline equivalent to the greenhouse gas emissions produced by landfilled trash.
80 percent
— Greenhouse gas reduction goal set by Mayor de Blasio for 2050.
$7
— 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.
New York City's Preliminary Budget for Fiscal Year 2016 utilizes a thriving economy to address service needs while maintaining reserves, though officials are urged to review past spending to improve efficiency. Additionally, the proposed ten-year capital strategy has grown to $68 billion, a significant increase from the previous $54 billion plan.
Recommendations related to City Spending Trends
Additional expenditures should be accompanied by a review of past spending commitments to assess performance and reduce inefficiencies.
The City should conduct reviews of past spending commitments to produce recurring savings that will help prepare for the next economic downturn.
Key Data
$68 billion
— The cost of the Preliminary Ten-Year Capital Strategy for Fiscal Years 2016 - 2025.
$54 billion
— The cost of the Preliminary Ten-Year Capital Strategy for Fiscal Years 2014 - 2023.
Annual 'Christmas bonus' payments to retired police, fire, and correction officers drain city pension funds, reducing investment returns and necessitating higher taxpayer contributions to cover pension liabilities. Eliminating these non-constitutionally protected payments would improve the fiscal health of the pension system and lower the burden on the city's operating budget.
Recommendations related to City Spending Trends
The Mayor and City Council should make phasing out or eliminating the Variable Supplement Fund (VSF) a priority on their legislative agenda in Albany.
Policymakers should gradually eliminate these unusual pension bonuses for retirees to enhance the fiscal condition of the pension funds and reduce the needed contributions from taxpayers.
Key Data
$2.9 billion
— The amount transferred from the pension funds to the Variable Supplement Funds in fiscal year 2014.
$8.6 billion
— The total pension contributions required in the fiscal year 2015 budget.
$2.5 billion
— The amount transferred from the police pension fund to police officers’ and superiors’ Variable Supplement Funds in fiscal year 2014.
$500 million
— The total cost of Variable Supplement Fund payments made to eligible retirees in 2014.
17.5 percent
— The combined return on the pension system's $150.3 billion in investments during fiscal year 2014.
$12,000
— The annual check amount received by eligible retired police, fire, and correction officers.
The New York City Health and Hospitals Corporation faces a severe fiscal crisis, with deficits projected to reach $1.7 billion by fiscal year 2018 and cash reserves expected to be exhausted by 2016. To ensure financial sustainability, the organization must modernize operations, improve service efficiency, and establish more stable funding guidelines with the City.
Recommendations related to City Spending Trends
To realize savings of that magnitude, HHC will need to intensify its efforts to make service delivery more efficient and reduce unneeded hospital capacity.
MetroPlus also should seek to retain more of its members' utilization at HHC facilities, primarily by attracting patients to in-house providers because of their high quality relative to others and their proximity to member residences.
HHC should advocate for available state tax exemptions and funding sources conditioned on greater participation by voluntary hospitals in caring for the uninsured.
HHC and municipal leaders should develop more rational and stable guidelines for funding HHC.
Possibilities include capitated payments for the uninsured that reflect the cost of providing care and incentive payments for implementing state-of-the-art care management models.
Key Data
$668 million
— The deficit run by the Health and Hospitals Corporation in fiscal year 2013.
$645 million
— The estimated deficit for the Health and Hospitals Corporation in fiscal year 2014.
$1.7 billion
— The projected imbalance between revenues and expenditures for the Health and Hospitals Corporation in fiscal year 2018.
$2.2 billion
— The annual revenues of MetroPlus, a Medicaid managed care plan operated by the Health and Hospitals Corporation.
467,823
— The number of enrollees in MetroPlus in 2014, which more than doubled from 2005.
700,000
— The estimated number of New Yorkers who will remain uninsured despite the Affordable Care Act.
New York City spends $2.3 billion annually on garbage collection, with public-sector costs significantly higher than private-sector alternatives. Implementing proposed reforms to collection methods, competition, and fee structures could save taxpayers hundreds of millions of dollars annually.
Recommendations related to City Spending Trends
The City should promote flexibility in refuse collection, shift scheduling, and recycling practices to better meet neighborhood needs.
The Department of Sanitation should redesign routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons.
The City should expand the use of one-worker, automated trucks from 8 percent to 18 percent of the fleet.
The City should eliminate "unproductive" productivity bonuses for DSNY workers that are based on route assignments rather than actual productivity.
The City should implement pay-as-you-throw financial incentives to discourage garbage creation and encourage reuse and recycling.
The City should introduce competition to public waste collection by soliciting public and private-sector bids for smaller waste streams.
The City should create franchises for commercial waste collection to limit the number of carters and improve operational efficiency.
Key Data
$2.3 billion
— Annual spending on both the public and private systems of handling trash in New York City.
$300 million
— Annual savings potential from longer-term changes to the garbage collection system.
$220 million
— Annual savings if all DSNY collections were subject to competition.
$72 million
— Annual savings from redesigning routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons.
$57 million
— Annual savings from implementing pay-as-you-throw fees for garbage producers.
$26 million
— Annual savings to the private system from creating franchises for commercial waste collection.
New York City could save over $300 million annually by modernizing its municipal waste collection through route optimization, increased automation, and the introduction of competitive bidding for residential and commercial services. Implementing volume-based "pay-as-you-throw" fees and diversifying the snow removal workforce would further reduce costs and improve operational efficiency.
Recommendations related to City Spending Trends
The City should promote flexibility in service arrangements by redesigning routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons.
DSNY should expand the use of large containers and automated trucks to reduce the physical labor required for collection and improve productivity.
The City should eliminate 'unproductive' productivity bonuses that are currently based on route characteristics rather than actual worker performance.
Municipal policy should implement financial incentives to reduce refuse generation through volume-based 'pay-as-you-throw' fees.
The City should introduce competition to promote efficient public waste collection by soliciting public- and private-sector bids for smaller waste streams and residential collection.
The City should create franchises for more efficient commercial waste collection to limit the number of carters in a given area and reduce truck congestion.
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.
Key Data
$275 million
— Annual savings from redesigning municipal waste collection policies.
$220 million
— Annual savings from managed competition for all residential garbage.
$72 million
— Annual savings from redesigning routes to increase average refuse collected per truck-shift from 10 to 12 tons.
$57 million
— Annual savings from implementing pay-as-you-throw fees.
$26 million
— Annual savings from commercial garbage collection franchises.
$20 million
— Annual savings from expanding the use of automated trucks from 8% to 18%.
New York City's fiscal year 2015 budget increases spending by billions to cover labor contracts and new services, while projecting future budget gaps due to spending growth outpacing revenue. To maintain fiscal stability, the city must implement recurring health care savings, improve operational efficiency, and reinstate programs to eliminate budget gaps.
Recommendations related to City Spending Trends
The Administration and the Municipal Labor Committee should agree to changes that provide recurring savings on rapidly-growing health care costs.
The City should make city operations more efficient by eliminating archaic work rules, adopting new technologies, and reinventing service delivery.
There should be restraint in adding new spending, particularly regarding new programs and expanded services.
The City should implement a Program to Eliminate the Gap (PEG) to find efficiencies within agency operations.
The Administration should develop guidelines for regular deposits to and potential withdrawals from the Retiree Health Benefits Trust (RHBT) in order to prevent future raids on the fund.
Key Data
$75 billion
— New York City’s total budget for fiscal year 2015.
$13.6 billion
— Projected gross cost of negotiating labor agreements with the entire municipal workforce between fiscal years 2014 and 2018.
$3.4 billion
— Targeted savings in health care costs to be achieved through actions yet to be specified.
$3.1 billion
— Projected budget gap for fiscal year 2018.
$2.6 billion
— Projected budget gap for fiscal year 2016.
$1.9 billion
— Projected budget gap for fiscal year 2017.
Proposed legislation (A9594/S7326) threatens to reverse 2012 pension reforms, potentially increasing City costs by $35 million in fiscal year 2015 and up to $617.9 million by fiscal year 2019. These changes would undermine previous efforts that saved the City an estimated $31 billion over 30 years, necessitating opposition to maintain fiscal responsibility.
Recommendations related to City Spending Trends
The Mayor should oppose the supporting home rule message under consideration in the City Council as well as the bill itself.
The Mayor should affirm his commitment to fiscal responsibility by opposing this bill.
Key Data
$8.2 billion
— The total pension costs in fiscal year 2013, which was up 235 percent from fiscal year 2004.
235 percent
— The increase in pension costs from fiscal year 2004 to fiscal year 2013.
$31 billion
— The estimated savings to the City over 30 years resulting from the 2012 pension reforms.
$35 million
— The increase in the City's costs in fiscal year 2015 if the proposed changes to police disability pensions are enacted.
$266.4 million
— The actuarial value of contributions required by the City to fund the new benefit in fiscal year 2015.
$617.9 million
— The actuarial value of contributions required by the City to fund the new benefit in fiscal year 2019.
New York maintained its position as the highest per-pupil spender on public education in 2012, with costs 84 percent above the national average driven largely by high teacher compensation and fringe benefits. These rising benefit costs have squeezed district budgets, forcing reductions in other areas like classroom supplies and limiting salary growth.
Key Data
$19,552
— New York's average per-pupil spending on public elementary-secondary education in 2012.
$10,608
— The national average per-pupil spending on public elementary-secondary education in 2012.
84%
— The amount by which New York's average overall per-pupil spending exceeded the national average.
$8,313
— Average instructional salaries and wages per pupil in New York.
$4,233
— Average instructional employee fringe benefits per pupil in New York.
6.8%
— The growth rate of fringe benefits for teachers from 2011 to 2012.
New York City's garbage collection system is exceptionally expensive, with public costs significantly exceeding those of private carters and other major cities due to inefficient labor contracts and operational practices. Addressing these high costs requires reforming labor agreements and implementing policies like 'pay-to-throw' and single-stream recycling to improve efficiency and reduce waste.
Recommendations related to City Spending Trends
The City should use the expired labor contract with sanitation workers to address the major factors driving the exceptionally high costs of the trash system.
New York City should implement 'pay-to-throw' arrangements to provide an incentive to reduce waste.
The City should move away from mandated inefficient recycling practices to 'single stream' recycling that requires far fewer trucks to collect.
Key Data
$2.3 billion
— Total annual amount spent by the public and private systems to handle garbage in New York City.
$431
— Average combined collection and disposal cost per ton for the Department of Sanitation.
$185
— Average combined collection and disposal cost per ton for private carters.
$100,000
— Starting compensation for a City sanitation worker, including direct wages and fringe benefits.
$629
— Cost per ton for the Department of Sanitation to collect recyclable material in fiscal year 2012.
$251
— Cost per ton for the Department of Sanitation to collect refuse.
New York City's waste management system is significantly more expensive than private alternatives, with the Department of Sanitation spending $2.3 billion annually on collection and disposal. High costs are driven by inefficient collection practices, generous compensation packages, and a reliance on public employees for snow removal, suggesting a need for reforms like automated collection, pay-as-you-throw pricing, and private contracting for snow services.
Recommendations related to City Spending Trends
The City should implement a pay-as-you-throw system to create financial incentives for residents to generate less refuse.
DSNY should adopt automated trucks to reduce labor costs and decrease the high rate of worker injuries.
The City should utilize private contractors for snow removal to reduce the heavy reliance on DSNY employees and curb high overtime expenses.
New York City should limit the number of private waste carters through franchise agreements to reduce truck traffic, emissions, and inefficiency.
DSNY should transition to single-stream recycling to improve collection efficiency and reduce the costs associated with dual-stream sorting.
Key Data
$2.3 billion
— Total annual local spending on residential and commercial garbage collection and disposal.
$431 per ton
— DSNY's average combined collection and disposal cost.
$185 per ton
— Private carters' average combined collection and disposal cost.
$119.5 million
— DSNY overtime costs accrued in fiscal year 2011 due to heavy snowfall.
$55 million
— DSNY overtime costs accrued in fiscal year 2012 due to snow and a hurricane.
$100,000
— The starting compensation cost for a City sanitation worker.
New York City's health insurance costs for employees and retirees more than doubled in the last decade to $4.8 billion in fiscal year 2012, and are projected to reach nearly $7 billion by fiscal year 2016. Implementing premium-sharing for employees and retirees, alongside the elimination of Medicare Part B premium reimbursements, would generate $1.8 billion in savings in fiscal year 2014, rising to $2.2 billion by fiscal year 2016.
Recommendations related to City Spending Trends
The City should implement premium-sharing for employees to align with private sector and other municipal government standards.
The City should require premium-sharing by retirees, as few private sector employers offer retiree health insurance and public sector peers typically require higher contributions.
The City should eliminate the reimbursement of Medicare Part B premiums for retirees and their spouses, as this practice is rare among other state and local governments.
Key Data
$4.8 billion
— Health insurance costs for New York City municipal employees and retirees in fiscal year 2012.
$7 billion
— Projected health insurance costs for New York City municipal employees and retirees by fiscal year 2016.
$1.8 billion
— Total savings in fiscal year 2014 if the proposed premium-sharing and Medicare reimbursement changes are adopted.
$2.2 billion
— Total savings in fiscal year 2016 if the proposed premium-sharing and Medicare reimbursement changes are adopted.
$83 billion
— Estimated unfunded liability for retiree health insurance and other post-employment benefits.
70 percent
— Portion of the projected budget gap in 2016 that will be comprised of health insurance costs.
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 over the past decade, with tax expenditures doubling to nearly $1.6 billion and capital spending nearly tripling to $751 million annually by 2012. Despite this growth, the city lacks consistent evaluation of these programs, necessitating clearer standards for discretionary benefits and a shift toward more cost-effective tools like conduit financing for non-profits.
Recommendations related to City Spending Trends
The city should use capital investments to enhance infrastructure in neighborhoods with job growth potential rather than supporting individual firms as beneficiaries.
The city should encourage growth in the cultural, medical and educational sectors by enhancing access to capital through conduit financing instead of relying on direct capital grants.
The city should continue reform of as-of-right tax expenditure programs to make them more cost-effective by implementing greater restrictions on retail benefits and shorter durations.
The city should establish clearer standards for awarding discretionary tax expenditure benefits, such as capping the level of per-job subsidies.
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 in its administration of tax exemptions.
Key Data
$1.6 billion
— Annual tax expenditures in 2012.
$751 million
— Annual capital spending 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.
$9.2 billion
— Total face value of bond issues for 226 projects between 2002 and 2012.
New York City's Ten-Year Capital Strategy for fiscal years 2014-2023 proposes $53.7 billion in infrastructure investments, yet the city faces a high and growing debt burden that limits future flexibility. With debt service projected to rise to 17 percent of city-funded expenditures by 2017, the incoming administration must carefully balance infrastructure needs with fiscal affordability.
Recommendations related to City Spending Trends
The next mayor must determine a level of long-term capital investment that takes into account the city’s already high debt burden.
The city must incorporate future resiliency proposals into the long-term capital agenda.
The city must make difficult trade-offs among competing priorities to keep debt from becoming unaffordable.
Key Data
$53.7 billion
— Total capital commitments proposed in the Ten-Year Capital Strategy for Fiscal Years 2014-2023.
$67.9 billion
— Total city debt outstanding in fiscal year 2013.
45 percent
— Growth in city debt outstanding since 2003.
14.6 percent
— Share of city-funded expenditures currently dedicated to debt service.
17 percent
— Projected share of city-funded expenditures dedicated to debt service by fiscal year 2017.
58 percent
— Portion of required state of good repair work funded in the fiscal year 2014 report.
The city faces a significant fiscal challenge as all municipal labor contracts have expired, and negotiating new agreements with retroactive pay could cost billions. Funding these retroactive raises would necessitate either sharp tax increases or significant spending cuts to the city's operating budget.
Recommendations related to City Spending Trends
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 contract negotiations, 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 raises.
10 percent
— The portion of the city's fiscal year 2014 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's health insurance costs for employees and retirees are projected to rise to nearly $7 billion by 2016, consuming 80 percent of the city's projected budget deficit. Implementing premium-sharing requirements for employees and retirees, alongside the elimination of Medicare Part B reimbursements, could generate $1.7 billion in annual savings.
Recommendations related to City Spending Trends
The city should require contributions of up to 25 percent from employees for health insurance premiums.
The city should require contributions of up to 50 percent from retirees for health insurance premiums.
The city should eliminate the Medicare Part B reimbursement for retirees.
Key Data
40 percent
— Projected growth of health insurance costs between fiscal years 2013 and 2017.
$7 billion
— Projected cost of health insurance in 2016.
80 percent
— Portion of the city's projected budget deficit that health insurance costs will equal in 2016.
90 percent
— Portion of the city's workforce enrolled in health plans requiring no employee contribution.
$1.7 billion
— Estimated annual savings achievable through premium-sharing and eliminating Medicare Part B reimbursements.
New York City's public employee health insurance costs are projected to reach nearly $7 billion by 2016, contributing significantly to the city's budget deficit. Implementing premium-sharing for employees and retirees would generate billions in savings while aligning benefits with national standards.
Recommendations related to City Spending Trends
Lawmakers and labor should reach an agreement to implement premium-sharing.
City employees should contribute 10% for individual and 25% for family coverage, similar to most U.S. workers.
Retirees should pay for 50% of the premium.
Reimbursement for Medicare Part B should be phased out.
Key Data
40%
— Projected growth of health insurance costs for New York City public employees and retirees by 2016.
$7 billion
— Projected annual cost of health insurance for New York City public employees and retirees by 2016.
$1.5 billion
— Portion of the projected 2016 budget deficit attributed to the growth in health insurance costs.
90%
— Percentage of the city’s workforce enrolled in health plans that require no employee contribution toward the cost of the premium.
$1.8 billion
— Total savings in fiscal year 2014 if premium-sharing reforms were implemented.
$2.2 billion
— Total savings in fiscal year 2016 if premium-sharing reforms were implemented.
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 driving significant budget gaps. Implementing premium-sharing for active employees and retirees, alongside eliminating Medicare Part B reimbursements, could generate up to $2.2 billion in annual savings by fiscal year 2016.
Recommendations related to City Spending Trends
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 align with broader public sector standards.
The City should eliminate the reimbursement for Medicare Part B premiums for retirees and their spouses to decrease annual health insurance expenditures.
Key Data
$4.8 billion
— The cost of health insurance for New York City municipal employees and retirees in fiscal year 2012.
$2.0 billion
— The cost of health insurance for New York City municipal employees and retirees in fiscal year 2002.
$83 billion
— The estimated unfunded liability for retiree health insurance and other post-employment benefits (OPEB).
$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 total savings in fiscal year 2014 if the proposed premium-sharing and Medicare reimbursement changes are adopted.
$2.2 billion
— The total savings in fiscal year 2016 if the proposed premium-sharing and Medicare reimbursement changes are adopted.
New York City's budget relies heavily on temporary 'one-shot' resources and lacks structural reforms for escalating costs like health insurance and debt service, which have driven total agency spending up 19.8% since 2008. To address persistent budget gaps and the limitations of the current $1.5 billion 'Program to Eliminate the Gap,' the city must move beyond temporary measures and implement more enduring, long-term expenditure reductions.
Recommendations related to City Spending Trends
The City must prioritize rightsizing capital investment to reduce the long-term trajectory of debt service costs.
The City needs to reform health insurance premium arrangements to address the structural budget deficit caused by escalating health costs.
The City should implement larger recurring expenditure cuts rather than relying on temporary measures to close budget gaps.
The City must negotiate changes to health insurance with public employee unions or make them legislatively to control spending growth.
Key Data
$1.5 billion
— Total savings from the November 2012 Program to Eliminate the Gap (PEG) over two years.
$2.5 billion
— The projected fiscal year 2014 budget gap.
$72.3 billion
— The projected total budget for fiscal year 2013.
19.8%
— The increase in the total budget from fiscal year 2008 to fiscal year 2013.
$8.0 billion
— The cost of pension contributions, a major big-ticket expenditure item.
$6.3 billion
— The cost of Medicaid, a major big-ticket expenditure item.
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 change would redirect significant budget resources away from an overly generous benefit that costs taxpayers hundreds of millions of dollars annually.
Recommendations related to City Spending Trends
The City should begin a phase-out of the reimbursement of Medicare Part B premiums for retired municipal workers and their spouses in next year’s budget.
The City should reduce the reimbursement of Medicare Part B premiums by 50 percent in each of the next two years to generate significant savings.
The City should redirect budget resources toward the needs of the city’s children and away from areas of overspending like retiree health benefits.
Key Data
$100
— The monthly standard premium for Medicare Part B benefits.
$320
— The maximum monthly premium for Medicare Part B for high-income individuals.
$280 million
— The cost of providing Medicare Part B reimbursement to retirees and their spouses in fiscal year 2013.
$380 million
— The projected cost of providing Medicare Part B reimbursement to retirees and their spouses by fiscal year 2016.
$140 million
— The savings generated in fiscal year 2013 by reducing Medicare Part B reimbursement by 50 percent.
$310 million
— The savings generated in fiscal year 2014 by reducing Medicare Part B reimbursement by 50 percent.
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.
New York City faces a financial dilemma as revenue growth slows and spending on health insurance and debt service continues to outpace revenue, necessitating a shift away from reliance on one-shot budget fixes. To address these structural issues, the City should implement a wage freeze, adopt premium-sharing for employee health benefits, and reform capital investment prioritization.
Recommendations related to City Spending Trends
The Council should sustain the three-year wage freeze to avoid a serious risk to the budget.
The Council should use its authority to phase out the reimbursement of Medicare Part B premiums for retirees over age 65.
The Council should support the Mayor in seeking premium-sharing arrangements for employees and retirees to reduce the City's unfunded liability.
The Council should reexamine the level and nature of capital investments by establishing clear criteria for prioritizing projects 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 budget gap.
$700 million
— Annual savings if employee contributions of 10 percent for single coverage and 25 percent for family coverage were implemented.
52 percent
— The portion of state-of-good-repair needs that will be funded in fiscal years 2013 to 2016.
$280 million
— Savings in fiscal year 2013 from phasing out the reimbursement of Medicare Part B premiums.
New York City spends $2 billion annually on waste collection and disposal, with significant portions of that budget going toward expensive, environmentally harmful long-distance landfilling. By transitioning to local waste-to-energy facilities, the city could achieve substantial fiscal savings, including $119 million annually and $2 billion over 30 years.
Recommendations related to City Spending Trends
New York City should follow the example of many European countries that convert nonrecyclable garbage into energy.
The city should explore the ability of existing local facilities to receive additional garbage, either as currently configured or through expansion.
New York City should allow larger new waste-to-energy plants to achieve greater savings.
Key Data
$2 billion
— Annual cost for the Department of Sanitation to collect and dispose of about a third of the city's garbage.
$300 million
— Amount spent annually on railroads, trucking companies, and landfill operators to transport and dispose of 3 million tons of nonrecycled garbage.
$119 million
— Annual savings for New Yorkers if local waste-to-energy facilities processed 2 million more tons of city waste.
$2 billion
— Total savings over 30 years if local waste-to-energy facilities processed 2 million more tons of city waste.
$95
— Cost per ton to ship and bury garbage in long-distance landfills.
$66 and $77
— Current cost per ton for local waste-to-energy disposal.
The cost of health benefits for retired government employees is rising rapidly, creating massive unfunded liabilities of $84 billion for New York City and $56 billion for the state. Legislative efforts to restrict the ability of officials to modify these benefits threaten to force cuts to essential services like police, fire, and schools.
Recommendations related to City Spending Trends
Public officials should retain the discretion to alter retiree health insurance to avoid laying off police or closing libraries.
State legislators should not pass bills that would prevent government officials from reducing current benefit levels for retirees.
Elected officials should not be put in a position where they have to lay off current workers and reduce services because they lack the latitude to address retiree health-insurance costs.
Key Data
$1.6 billion
— FY 2012 New York City cost for health insurance for retired government employees.
$1.3 billion
— State cost for retiree health care in fiscal year 2011-12.
44 percent
— Increase in retiree health-insurance costs in the city budget from five years ago.
a third
— Increase in retiree health-insurance costs in the state budget from five years ago.
$84 billion
— Estimated unfunded liability for New York City retiree health benefits.
$56 billion
— Estimated unfunded liability for New York State retiree health benefits.
The New York City Health and Hospitals Corporation faces significant fiscal challenges as its expenses for pensions and benefits outpace revenues, leading to projected operating deficits through 2016. To address these gaps, the corporation must identify new funding sources or implement steeper expenditure reductions and layoffs to avoid a dramatic decline in services for needy residents.
Recommendations related to City Spending Trends
The Health and Hospitals Corporation must redouble its efforts at delivering services more efficiently to avoid a dramatic reduction in services for needy residents.
The Health and Hospitals Corporation must identify new sources of funding to replace lost supplemental Medicaid payments and cover projected operating deficits.
The Health and Hospitals Corporation may need to implement steeper expenditure reductions and layoffs if the current gap-closing plan fails to achieve savings goals.
Key Data
$1.6 billion
— Annual revenues expected from special Medicaid supplementary payments.
$218 million
— Amount of personal service expenditures reduced by trimming the full-time employee headcount by roughly 2,500 between 2009 and early 2012.
$1.7 billion
— Projected operating deficit for the fiscal year 2016.
$850 million
— Amount of unspecified gap-closing actions required from the State and federal governments in fiscal year 2016.
Prevailing wage mandates significantly increase the cost of public projects by requiring compensation levels that often exceed private sector averages and include substantial supplemental benefit payments. To improve fiscal efficiency and transparency, the process for determining these wages should be reformed to use broader, more inclusive data and clearer, publicly accessible documentation.
Recommendations related to City Spending Trends
Efforts should be undertaken to ensure wage surveys are inclusive and widely administered, and the definition of prevailing wage should be broadened to a standard greater than 30 percent.
The State Labor Commissioner and the City Comptroller should take steps to improve transparency in the determination of prevailing wage.
They should exercise their discretion to re-examine the criteria for establishment of titles and consider whether changes to prevailing wage schedules could be made within occupations to simplify the schedules and reduce the cost burden.
In addition, collective bargaining agreements used to set prevailing wage rates should be identified on the schedules.
These and other contractual agreements relevant to the determination of the prevailing wage should also be posted online.
Key Data
$47.32 - $47.98
— The New York City prevailing wage range for boilermakers.
30%
— The minimum percentage by which supplemental pay for fringe benefits adds to compensation costs.
65 – 67%
— The percentage by which the prevailing wage for boilermakers exceeds the mean hourly rate paid by private employers.
91 – 99%
— The supplemental rate as a percent of the wage rate for truck drivers.
200%
— The high end of the ratio of prevailing wage to private sector wage for security guards.
New York City's decade-long trend of relying on unanticipated tax revenue surpluses to balance the budget has ended, as fiscal year 2012 collections are currently on target rather than exceeding expectations. Consequently, the city is forced to rely on temporary one-shot resources, such as the sale of taxi medallions and retiree health insurance trust funds, to cover budget gaps.
Recommendations related to City Spending Trends
The Mayor and the City Council will be obliged to 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
$5.3 billion
— The high of unanticipated tax revenues reached in fiscal year 2007.
$114 million
— The amount fiscal year 2012 tax collections are running above the initially budgeted sum.
$1 billion
— Revenues 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.
$7 billion
— The amount Wall Street profits are running below what was assumed when the budget was adopted.
$42.2 billion
— The total tax revenues for fiscal year 2012.
New York faces significant fiscal pressure as pension costs for the city, the MTA, and the state are projected to rise dramatically, with New York City's costs alone expected to reach $8.6 billion by fiscal year 2014. Implementing a new package of pension benefits for new employees could align the state with national norms and generate $123 billion in savings over the next 30 years.
Recommendations related to City Spending Trends
The governor should use his influence in the budget process to bring about more affordable pension benefits at all levels of government.
The governor should include a pension reform proposal in his executive budget.
The state Legislature should swiftly adopt a pension reform proposal to control government costs.
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
— New York's state and local tax burden per $1,000 of personal income in fiscal year 2009.
$12
— Pension costs per $1,000 of personal income in fiscal year 2009.
$574
— Annual taxes paid per person for public employee pensions.
$2.4 billion
— New York City's pension costs in fiscal year 2004.
$8.6 billion
— New York City's projected pension costs by fiscal year 2014.
$314 million
— MTA pension costs for subways, buses, bridges, and tunnels in fiscal year 2004.
The current method for calculating the rental payment from New York City's water and sewer system to the municipal treasury is arbitrary and has contributed to rapidly rising water prices for residents. Adopting a more transparent, logic-based approach for setting these payments would improve fairness, even if it does not result in lower overall costs for consumers.
Recommendations related to City Spending Trends
The City should adopt a payment of City-funded GO debt service plus payment for services rendered by the City to the water and sewer system to better align costs with actual services provided.
The Water Board could make a rental payment equivalent to what it would pay in City property taxes under the rate charged to other utilities.
The Water Board could make a rental payment equivalent to what it would pay under the utilities business income tax to align with standard utility practices.
The Water Board could make a rental payment equivalent to what it would pay for property and utilities business income taxes combined, similar to other utility providers.
The City should rethink the current policy for setting the rental payment, as the 15 percent formula is arbitrary and lacks a basis in the actual value of services received.
Key Data
$234 million
— The budgeted rental payment for the water and sewer system in fiscal year 2012.
$102 million
— The low point of the rental payment in 2003 before the City changed the calculation method.
$30 billion
— The amount of capital investment authorized to expand, improve, and maintain the water system since 1985.
$12.1 billion
— The projected capital investment for the water system over the next ten years.
$73.8 million
— The amount the Water Board paid the City in fiscal year 2011 for judgments, claims, and street cleaning services.
$2.96 billion
— The total revenue generated by the water system in fiscal year 2011.
New York City's waste management system costs approximately $4 billion annually, with significant inefficiencies in collection and disposal that drive up taxpayer expenses. By implementing waste reduction incentives, improving recycling efficiency, and utilizing cost-effective waste-to-energy facilities, the city could achieve substantial budgetary savings.
Recommendations related to City Spending Trends
New York City should test "pay to throw" fees for collection to signal the fiscal and environmental cost of waste disposal.
The City should implement a tax on plastic bags to incentivize waste reduction.
The Department of Sanitation should achieve greater economies of scale in recycling collection to lower costs.
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.
The Department of Sanitation management should work cooperatively with the Uniformed Sanitationmen’s Association to reverse the trend of rising collection costs.
Key Data
$4 billion
— annual cost of solid waste management for New Yorkers
$440 per ton
— average cost of collecting and disposing of waste by the DSNY
$205 million
— potential annual savings from a 10 percent reduction in waste generation
$575 per ton
— cost for handling recycled material
$50 million
— potential annual savings from lowering the average disposal cost of 2 million tons of garbage
56 percent
— increase in collection cost per ton since 2005
New York City's fiscal health is threatened by structural spending growth in health insurance, pensions, and debt service, which are projected to consume 33 percent of total revenues by 2015. To address these rising costs and avoid future service cuts, the city must implement structural reforms to employee benefits and downsize the capital budget.
Recommendations related to City Spending Trends
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.
Key Data
$4.8 billion
— The projected budget gap for fiscal year 2013.
$23.1 billion
— The expected spending on health insurance, pension contributions, and debt service in 2015.
$30 billion
— The total savings over the next 30 years from the proposed pension reform bill.
$625 million
— The savings produced in 2012 by adopting a premium-sharing arrangement for health insurance.
$5.4 billion
— The amount of projected spending reduced by agencies since 2008.
9,450
— The number of positions included in the Executive Budget proposal for elimination.
The Health Insurance Premium Stabilization Fund, which reportedly holds $500 million, is being considered to support city payroll expenses, prompting calls for greater transparency and oversight. An inquiry has been made to the Comptroller to clarify the fund's governance and investment performance, while urging the establishment of audit authority to ensure accountability.
Recommendations related to City Spending Trends
The Comptroller should establish audit authority for the Health Insurance Premium Stabilization Fund and promptly conduct an audit of its operations.
Key Data
$500 million
— The reported balance of the Health Insurance Premium Stabilization Fund.
New York City could avoid impending layoffs and service cuts by adopting the labor agreement model established by the state, which includes wage freezes, employee furloughs, and increased health insurance contributions. Implementing these measures would generate significant fiscal savings, potentially reaching $1.4 billion in fiscal year 2012 alone.
Recommendations related to City Spending Trends
The City should extend the wage freeze to a third year to generate $388 million in savings in 2013.
Implementing a five-day furlough for all municipal employees would save $400 million in 2012.
The City should require employees to contribute to the cost of their health insurance premiums, which would save $735 million.
The City should adopt the state’s long-standing policy for retiree premium-sharing to save an additional $290 million in fiscal year 2012.
Key Data
$3.8 billion
— Five-year savings for the State if the agreement is adopted by all State employees.
$1.4 billion
— Potential savings for New York City in fiscal year 2012 by following the state's template.
$388 million
— Savings in 2013 from extending the wage freeze to a third year.
$400 million
— Savings in 2012 from a five-day furlough for all municipal employees.
$735 million
— Savings from requiring city employees to contribute to health insurance premiums.
$915 million
— Savings from health insurance contributions by 2015.
Reforming health insurance arrangements for city employees and retirees could save over $1.5 billion in fiscal year 2012, helping to avoid layoffs and service cuts. These savings would be achieved by implementing premium sharing for current employees, requiring retiree contributions, and ending Medicare Part B premium reimbursements.
Recommendations related to City Spending Trends
The City should institute health insurance premium sharing for current employees at 10 percent for individual coverage and 25 percent for family coverage to generate savings.
The City should require retirees to pay 50 percent of their health insurance premium cost to reduce expenditures.
The City should end the reimbursement of Medicare Part B premiums for retirees over the age of 65.
Key Data
$1.5 billion
— Total potential savings for the City in fiscal year 2012 from implementing three specific health insurance reforms.
$600 million
— Savings in fiscal year 2012 from adopting premium sharing requirements for current employees at 10 percent for individual coverage and 25 percent for family coverage.
$700 million
— Savings in fiscal year 2012 from requiring retirees to pay 50 percent of their health insurance premium cost.
$250 million
— Savings in fiscal year 2012 from ending the reimbursement of Medicare Part B premiums for retirees over the age of 65.
New York City's pension costs have quadrupled since 2002, forcing difficult budget choices that threaten funding for essential services like education and social programs. To address this, structural reforms are proposed to increase the retirement age, raise employee contributions, and eliminate pension padding, which would save the city $30 billion over 30 years.
Recommendations related to City Spending Trends
The retirement age should be increased to 65 to align New York's pension system with Medicare eligibility and reduce the length and cost of benefit payouts.
Required employee contributions should be raised to 6 percent for their entire length of service to bring New York's pension funding closer to national norms.
Prospects for "pension padding" should be eliminated by calculating pension benefits based on the highest five years of earnings rather than the highest three.
Overtime pay should be excluded from the earnings used to calculate benefits to bring New York's rules in line with 94 percent of other public employees nationwide.
An "anti-spiking cap" should be implemented to exclude extraordinary increases in income in any year from pension benefit calculations.
Key Data
$1.5 billion
— New York City pension costs in 2002.
$7 billion
— New York City pension costs as of 2011.
$8.7 billion
— Projected New York City pension costs in 2015.
$30 billion
— Projected savings for New York City over 30 years from the proposed pension reforms.
$93 billion
— Projected savings for state and local governments over 30 years from the proposed pension reforms.
$179,000
— Proposed maximum eligible wages cap for pension benefit calculations.
The Metropolitan Transportation Authority faces significant fiscal challenges, with projected budget gaps reaching nearly $1.2 billion by 2013 despite previous fare increases and tax hikes. To address these deficits, the agency has implemented service cuts and efficiency measures, including renegotiating vendor contracts and reducing overtime, aimed at achieving recurring savings of approximately $525 million.
Key Data
$8 billion
— Total operating expenses for the five largest MTA passenger transport divisions in 2009.
$300 million
— The operating budget deficit the MTA ended 2009 with, despite a new tax and fare increase.
$1.2 billion
— The projected budget gap for the MTA in 2013.
$525 million
— The expected recurring savings from efficiency measures and service cuts.
$100 million
— The projected annualized savings from service cuts that took effect in June 2010.
New York City faces significant budget pressures and is considering depleting its retiree health insurance trust fund to cover deficits, despite the fund's purpose to address a $70 billion unfunded liability. Instead of tapping these reserves, the city should implement structural reforms to retiree benefits, such as eliminating Medicare Part B reimbursements and instituting premium sharing, to generate recurring savings.
Recommendations related to City Spending Trends
The City should eliminate reimbursement of Medicare Part B premiums to align with other public employers and generate significant recurring savings.
The City should institute premium sharing for retiree health insurance, requiring retirees to pay for half the cost of their premiums.
The City should increase vesting requirements for retiree health insurance benefits for the public workforce.
The trust fund should be protected from any further drawdowns, including the ones already scheduled for the current and subsequent fiscal years.
The City should make additional deposits into the trust fund when the City returns to prosperity.
Key Data
$70 billion
— The total unfunded accrued liability for retiree health benefits.
$2.2 billion
— The projected cost of retiree health insurance by 2015.
$975 million
— The combined value of savings in fiscal year 2012 from eliminating Medicare Part B reimbursements and instituting premium sharing.
$1.2 billion
— The amount the City is planning to withdraw from the retiree health insurance trust fund for general budget relief.
$600 million
— The amount of State action required to close the budget gap for fiscal year 2012.
$883 million
— The cost of retiree health insurance in 2005.
New York City implemented multiple rounds of budget cuts between 2009 and 2011 to address revenue shortfalls, relying heavily on revenue-raising measures and shifting funding sources rather than direct spending reductions. To avoid further cuts to essential services like education, the city must pursue structural reforms to pension contributions and employee health insurance premiums.
Recommendations related to City Spending Trends
The City should identify and approve ways to reduce spending for pension fund contributions and health insurance premiums for employees and retirees to avoid substantial new cuts in agency budgets.
New initiatives should be implemented to reduce the “all other” budget category, which consists largely of pension fund contributions and health insurance premiums.
Unions must be willing to accept changes in collective bargaining over health benefits to achieve larger savings in fringe benefits.
Wide support must be garnered to push the State Legislature to authorize changes in future pension benefits to achieve necessary budget savings.
Key Data
$3.4 billion
— Total budget balancing actions proposed in the last two fiscal years.
$2.0 billion
— Total agency expenditure reductions achieved.
$926 million
— The single largest cut, which occurred at the Department of Education.
$593 million
— Revenue raising measures identified in PEG documents.
274,061
— Number of full-time employees at the end of fiscal year 2010.
New York State and City should eliminate the reimbursement of Medicare Part B premiums for retirees, a costly fringe benefit rarely offered by other employers that costs hundreds of millions of dollars annually. Additionally, increasing retiree health insurance premiums to 50 percent of the total cost would help alleviate the fiscal pressure caused by rising healthcare expenses.
Recommendations related to City Spending Trends
One such opportunity is to eliminate a public employee fringe benefit rarely offered anywhere else: reimbursement for Medicare Part B premiums.
Premiums for retiree health insurance should be increased by both the State and the City to 50 percent of the cost to relieve the burdens of rampant cost escalations.
Key Data
$96.40
— The base monthly premium for Medicare Part B.
$350
— The monthly premium for retirees with greater incomes.
$20 million
— The minor relief provided by the State limiting reimbursements to 90 percent for individual coverage and 75 percent for family coverage.
$140 million
— Total costs of State Medicare Part B reimbursements in fiscal year 2010.
$213 million
— Total costs of New York City Medicare Part B reimbursements in fiscal year 2010.
$312 million
— Projected cost of New York City Medicare Part B reimbursements by 2014.
New York City's fiscal year 2011 budget gap was largely addressed through temporary revenue shifts and one-time funding sources rather than structural expenditure cuts, disproportionately impacting health, welfare, and cultural institutions. Looking ahead to fiscal year 2012, the city faces a $1 billion budget gap that will likely necessitate significant service cuts and headcount reductions of over 8,000 positions unless structural reforms to employee costs are implemented.
Recommendations related to City Spending Trends
The city must implement reforms to reduce employee health insurance or pension costs to avoid relying on harmful service cuts to close future budget gaps.
Key Data
$4.5 billion
— The looming budget gap for fiscal year 2012.
$1 billion
— The proposed program to eliminate the gap (PEG) for fiscal year 2012.
8,264
— The total headcount reduction planned for fiscal year 2012.
$585 million
— The total program to eliminate the gap (PEG) for fiscal year 2011.
$369 million
— The amount of revenue actions in the fiscal year 2011 PEG, representing 63 percent of the total.
$91.6 million
— The savings achieved from expenditure actions with associated headcount reductions in fiscal year 2011.
Despite repeated announcements of budget cuts since 2008, New York City's capital commitments have continued to rise, reaching a record high of over $12 billion in fiscal year 2011. This trend reflects a failure to apply the same fiscal austerity to infrastructure projects that has been successfully implemented in the city's operating budget.
Recommendations related to City Spending Trends
The Mayor must become more determined about establishing priorities in the capital budget the way he has for the operating budget.
Key Data
$38.9 billion
— Reduced commitment plan for fiscal years 2009-2012.
$26.2 billion
— Commitment plan for fiscal years 2010-2013.
$12 billion
— Projected 2011 commitments that exceed this amount.
$12.2 billion
— Average yearly commitments since the Mayor began “cutting” the capital plan.
$1.3 billion
— Commitments for parks in fiscal year 2011.
$1.1 billion
— Commitments for economic development in fiscal year 2011.
New York City faces ballooning liabilities for retiree health insurance, with expenses reaching $9.4 billion in fiscal year 2010 due to rising costs and new benefit mandates. To manage these growing fiscal pressures, the city must implement premium-sharing for retirees and establish a disciplined, long-term funding policy for these obligations.
Recommendations related to City Spending Trends
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 benefits.
The City should institute premium-sharing for retirees, which can be collectively bargained.
An appropriate goal is for retirees to pay 50 percent of their health insurance premiums.
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
— New York City recognized this expense for 'other postemployment benefits' (OPEB) in fiscal year 2010.
$2.3 billion
— The amount of OPEB expenses 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 cost of retiree health insurance premium payments by the City in 2014.
$11 billion
— The 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 municipal pension and benefit costs are forcing significant budget cuts to essential youth services in New York City. Reforming these generous compensation packages, specifically for uniformed workers, would alleviate the need for such drastic service reductions.
Recommendations related to City Spending Trends
The Legislature must enact a new pension system for future uniformed workers that includes a minimum age for retirement.
The Legislature must enact a new pension system for future uniformed workers where the pension is based on salaries without overtime.
The Legislature must enact a new pension system for future uniformed workers where they are obliged to contribute more during their working years.
Union leaders must agree to more cost-sharing for health insurance premiums.
Retirees should be paying for a share of their benefits similar to arrangements in the private and nonprofit sectors.
Key Data
$1.6 billion
— Budget cuts announced by Mayor Bloomberg in November 2010.
$3 billion
— Reduction in planned spending for fiscal year 2012.
$6.6 billion
— Total pension contributions cost New York's taxpayers in 2009.
$1.2 billion
— Retiree health insurance cost New York taxpayers in 2009.
$4.9 billion
— Annual pension fund contributions in 2007.
$8.1 billion
— Projected annual pension fund contributions in fiscal year 2012.
New York City spends $1 billion annually on municipal union welfare funds, which suffer from poor management, lack of accountability, and inefficient benefit provision. Consolidating these benefits into the city's health insurance program and centralizing non-health benefits could improve oversight and generate significant taxpayer savings.
Recommendations related to City Spending Trends
The City should consolidate supplementary health care benefits under the City's health insurance plan to replace the varying and inefficient package of drug, dental, and optical benefits provided by multiple welfare funds.
A new centralized 'cafeteria' plan should be developed to provide non-health-related benefits, enabling individuals to select specific benefits with a limit on the dollar value.
The City should improve accountability for any remaining union welfare fund expenditures by setting standards for fund performance and expanding the Comptroller's authority to oversee and sanction funds.
Key Data
$1 billion
— Annual taxpayer contributions to municipal union welfare funds.
$146 million
— Estimated annual savings from consolidating supplementary health care benefits under the City's health insurance plan.
8% to 16%
— Portion of current welfare fund expenditures that go toward non-health-related benefits.
48
— Number of funds out of 70 analyzed that were cited for issues such as excessive administrative costs, high reserve levels, or signs of insolvency.
3
— Number of funds that were insolvent at the end of 2007.
69
— Number of funds that submitted late filings for fiscal year 2007.
New York City spends over $1 billion annually on union welfare funds, which suffer from limited accountability, poor financial management, and inefficient benefit provision. Consolidating these supplementary health benefits under the City's health insurance program and centralizing non-health benefits could yield significant taxpayer savings.
Recommendations related to City Spending Trends
The City should consolidate supplementary health care benefits under its existing health insurance program to leverage large-scale purchasing power and improve benefit design.
The City should provide non-health related benefits through a centralized "cafeteria plan" to achieve economies of scale and allow for more flexible, member-specific benefit selection.
The City should improve accountability for any remaining union welfare fund expenditures by setting stricter limits on administrative costs, establishing reserve requirements, and granting the Comptroller new enforcement powers to sanction non-compliant funds.
Key Data
$1 billion
— Annual City payments to union welfare funds.
$146 million
— Total estimated annual savings from consolidating health benefits and administrative operations.
$12.7 million
— Estimated annual administrative savings from consolidating welfare funds.
$3.7 billion
— Cost to the City for health insurance benefits in fiscal year 2010.
$254,052,851
— City payments to District Council 37 in 2007.
$250,646,789
— City payments to Local 2 United Federation of Teachers in 2007.
New York City's infrastructure faces a significant maintenance backlog, with the city currently funding only about half of the $5.6 billion required for a state of good repair. To address this, the city must prioritize routine maintenance and utilize condition assessments to develop a long-term strategy for upgrading public assets.
Recommendations related to City Spending Trends
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
— Estimated need for state of good repair work for existing facilities.
36 percent
— Increase in the estimated cost of needed repairs since 2000.
$2.9 billion
— Funding allocated for AIMS capital work in fiscal year 2011.
53 percent
— Portion of required funding for AIMS capital work in fiscal year 2011.
70 percent
— Maintenance needs funded in the operating budget across all facilities.
$1.2 billion
— Annual amount that, if devoted to state of good repair between 2006 and 2009, would have eradicated the need identified in the AIMS report.
New York City's capital planning process needs to be modernized to better manage its vast infrastructure, as current practices often fail to prioritize assets in need of repair or justify new expansion projects. The city should adopt a long-term strategic approach that includes regular asset replacement cycles funded by operating revenues rather than relying on debt.
Recommendations related to City Spending Trends
A vibrant future for New York requires that this type of effort be institutionalized and expanded in scope.
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 according to their useful lives 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.
Key Data
$83.7 billion
— Total planned capital investments over the next ten years.
$23 billion
— Total cost of planned expansion projects for the next ten years.
$60.5 billion
— Total value of capital assets controlled by the City government.
$3.0 billion
— Investment in Hudson Yards, the only expansion project with clear justification.
$4.9 billion
— Estimated depreciation of major assets based on replacement cost in fiscal year 2007.
New York City's fiscal year 2011 budget relies on depleting accumulated surpluses to balance expenditures, which are growing at 6.3 percent despite agency cuts. To address long-term fiscal instability, the city must reform public employee benefits and scale back the $43.5 billion capital commitment plan.
Recommendations related to City Spending Trends
Bringing public employee health care and retirement benefits more in line with those of the private sector would achieve significant savings now and into the future.
Requiring employee contributions to health care premiums of 10 percent for individuals, 25 percent for families, and 50 percent for retirees would save the City over $1 billion annually.
Creating a new pension tier that would require greater employee contributions and a longer vesting period would 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, rather than less urgent development projects.
Key Data
$4.6 billion
— Projected gap in fiscal year 2012 where actual expenditures will exceed revenues.
$43.5 billion
— Total capital commitment plan for fiscal years 2010-2014.
6.3 percent
— Growth in expenditures in FY2011 compared to the previous fiscal year after adjusting for prepayments and drawdowns.
$3.6 billion
— Surplus from fiscal year 2010 used to balance the fiscal year 2011 budget.
4,200
— Number of jobs lost in the Program to Eliminate the Gap.
$100 million
— Service cuts faced by health and welfare programs.
New York City committed over $63 billion to capital projects between fiscal years 2002 and 2009, significantly increasing the value of city-owned assets like schools and parks. Despite this record investment, the city faces a growing maintenance backlog, with a funding gap for necessary repairs that has widened to 49 percent of required work.
Key Data
$63.4 billion
— Total capital commitments made by New York City through the end of fiscal year 2009.
$5.6 billion
— Amount of capital work needed to bring surveyed City assets to a state of good repair, according to the fiscal year 2011 AIMS report.
49 percent
— The funding gap for necessary capital work, which has grown from 29 percent over time.
$2.3 billion
— The approximate depreciation expense for City-owned assets in fiscal year 2009.
New York City's debt service is growing rapidly due to an expanding capital program, with total costs projected to reach $8.8 billion. To control these liabilities, the City must reduce capital investment by abandoning non-essential projects while prioritizing critical infrastructure repairs.
Recommendations related to City Spending Trends
The City must implement a downsized capital program to restrain the growth of debt service.
The City should apply the same belt-tightening measures used in the operating budget to the capital budget.
The City should make cuts starting in fiscal year 2011 by abandoning non-essential items, such as over $1.0 billion in economic development projects.
The City should prioritize preserving key infrastructure repairs like roads, bridges, water mains, and sewer pipes.
The City should pursue smarter, more targeted investment to produce real savings in debt service by the end of the Mayor's term.
Key Data
$5.2 billion
— Debt service in the current fiscal year, representing 12.4 percent of all city-funded spending.
$6.5 billion
— Total debt service including costs serviced by the Water Authority to support environmental protection projects.
$8.8 billion
— Projected total debt service costs, representing an increase of over 35 percent from current costs.
$38.6 billion
— Total capital commitments for fiscal years 2006 to 2009.
$14.5 billion
— Expected record high for capital commitments in fiscal year 2010.
$36.3 billion
— Updated capital commitment plan for fiscal years 2010-2013.
New York City's preliminary budget for fiscal years 2010 through 2014 addresses a $4.1 billion gap through a combination of revenue increases, spending cuts, and union contract negotiations. While the plan avoids broad tax increases, it faces challenges regarding potential state aid reductions, the preferential treatment of education spending, and the use of retiree health benefit funds to balance operating budgets.
Recommendations related to City Spending Trends
The City needs to develop a realistic plan for dealing with inevitable cuts in State aid rather than relying solely on a contingency plan designed for advocacy.
Policymakers should evaluate whether the highly favored status of teachers and the Department of Education is justified given the current difficult fiscal situation.
The City should reconsider the decision to use the Retiree Health Benefits Trust as a rainy day fund and instead adopt a policy for its future use that links withdrawals to growth in the current year liability for retiree health insurance premiums.
Key Data
$4.1 billion
— The budget gap for fiscal year 2010-11.
$371 million
— Savings in the current year from the 'Agency Program' designed to curb spending growth.
$1,149 million
— The total amount scheduled to be diverted from the Retiree Health Benefits Trust to help balance current operating budgets between fiscal years 2010 and 2012.
$11.9 billion
— The amount of aid the City expects from the State in the current fiscal year.
4,286
— The number of jobs to be eliminated by the end of fiscal year 2011 under the proposed agency savings plan.
Retired police and firefighters receive annual 'Christmas bonuses' known as Variable Supplement Fund payments, which totaled $405 Million in fiscal year 2010. These payments, which have grown 150% since 2001, are funded by taxpayers and can potentially impact city pension fund contributions if investment losses occur.
Key Data
$12,000
— The amount of the annual Christmas bonus, officially called a Variable Supplement Fund payment, received by eligible retired police and firefighters.
$405 Million
— The total amount of Variable Supplement Fund benefits paid out in fiscal year 2010.
150%
— The increase in Variable Supplement Fund benefits paid in fiscal year 2010 compared to fiscal year 2001.
$164 Million
— The total amount of Variable Supplement Fund benefits paid out in fiscal year 2001.
$1.7 Billion
— The total assets held in Variable Supplement Funds in fiscal year 2010.
New York City taxpayers currently spend $10.4 billion annually on pension and health-insurance benefits for municipal employees, a cost that exceeds private-sector standards. Aligning these benefits with private-sector practices could generate nearly $1.4 billion in annual savings for the city.
Recommendations related to City Spending Trends
The city should require its current workers to make contributions toward health-insurance premiums equal to the amounts paid by employees of local private-sector firms.
The city should require retirees to make contributions toward health-insurance premiums equal to the amounts paid by retirees of local private-sector firms.
The city should convert to defined-contribution plans for future hires to remain competitive with the private sector.
Key Data
$10.4 billion
— Total annual cost for pension and health-insurance benefits for current and retired municipal employees.
$1.4 billion
— Potential annual savings if the city offered benefits similar to those in the private sector.
$628 million
— Potential annual savings from requiring current workers to contribute to health-insurance premiums.
$741 million
— Potential annual savings from requiring retirees to contribute to health-insurance premiums.
8 percent
— Percentage of private firms in the survey that do not require payments toward premiums from their workers.
90 percent
— Percentage of private firms in the survey that offered a defined-contribution plan.
New York City taxpayers currently spend $10.4 billion annually on public employee pension and health insurance benefits, a figure that could be reduced by nearly $1.4 billion if the city aligned its contributions with private sector standards. By requiring employee contributions for health insurance and transitioning future hires to defined contribution pension plans, the city could maintain a competitive workforce while significantly lowering long-term fiscal obligations.
Recommendations related to City Spending Trends
The City should require current workers to contribute toward health insurance premiums, which would result in annual savings of about $628 million.
The City should implement a policy requiring retirees to contribute toward health insurance premiums, generating annual savings of about $741 million.
The City should convert to defined contribution plans for future hires to remain competitive with the private sector while reducing long-term pension costs.
The City should align its health insurance benefits with those of local private sector firms to balance their cost to taxpayers and their value in helping to recruit and retain a competitive workforce.
Key Data
$10.4 billion
— Total annual cost for pension and health insurance benefits in the current fiscal year.
$1.4 billion
— Potential annual savings from aligning health insurance benefits with private sector policies.
$628 million
— Potential annual savings from requiring current employees to contribute to health insurance premiums.
$741 million
— Potential annual savings from requiring retirees to contribute to health insurance premiums.
$900
— Typical annual contribution for individual health coverage in the private sector.
$3,500
— Typical annual contribution for family health coverage in the private sector.
New York City's municipal payroll costs rose by $15 billion between 2000 and 2009, while the number of full-time employees grew by 6,838. To ensure long-term fiscal health, the city must control payroll expenses through benefit reform and work rule changes while reducing debt service and focusing capital spending on existing assets.
Recommendations related to City Spending Trends
Wage increases must be kept below inflation to reverse the trend of rising municipal payroll costs.
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 must shift from a 35- to a 40-hour workweek to enable the City to operate with fewer workers.
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 billion
— The increase in the cost of compensating City employees, including pension and fringe benefits, from fiscal year 2000 to 2009.
80 percent
— 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 increase in the number of full-time municipal workers from 2000 to 2009.
2.5 percent
— The percentage growth in the number of full-time municipal workers from 2000 to 2009.
$6.5 billion
— The projected interest on the debt by 2013.
New York City faces a $5 billion budget gap, necessitating a teachers' contract that prioritizes fiscal responsibility through value-generating concessions and merit-based pay rather than seniority. The city should also eliminate wasteful spending by ending indefinite pay for teachers in the Absent Teacher Reserve and expediting the termination of unsatisfactory educators.
Recommendations related to City Spending Trends
Salary increases should be funded with value-generating concessions.
Pension and health insurance reforms should be implemented to curb rising benefit costs.
Merit pay should replace seniority rewards to better incentivize performance.
Targeted pay increases should be used to help staff shortage fields like math, science, and special education.
Compensation for teachers who are not teaching should end, with payments to teachers in the Absent Teacher Reserve ceasing after six months.
Unsatisfactory teachers should be terminated quickly by hiring more arbitrators and streamlining disciplinary procedures.
The new contract should include modifications to seniority rules that give principals an enhanced role in deciding the order of layoffs.
Financial incentives should be provided to teachers in shortage areas willing to commit to fixed-term assignments in hard-to-staff schools.
Key Data
$5 billion
— Projected budget gap for the next fiscal year.
$655 million
— Annual cost of two 4 percent raises included in the Mayor's budget.
$285 million
— Potential annual savings from ending pay increases solely for seniority after ten years.
$74 million
— Annual cost of the "Absent Teacher Reserve" which pays 1,400 teachers who are not teaching.
$60 million
— Annual cost of maintaining 640 teachers in "rubber rooms" while their cases are considered.
$9 billion
— Total annual cost of compensating teachers in New York City.
New York City faces unprecedented budget gaps reaching $9.6 billion by fiscal year 2013, necessitating a strategic shift away from tax increases and toward structural expenditure reductions. The city should prioritize lowering the cost of municipal services through pension and health insurance reforms, while curbing capital investments and avoiding the use of non-recurring revenues to balance the budget.
Recommendations related to City Spending Trends
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 not rely on inappropriate non-recurring revenues to balance the budget.
The City should implement a 25 percent contribution by current employees and a 50 percent contribution by retirees toward their health insurance premiums.
Key Data
$9.6 billion
— Projected budget gap by fiscal year 2013.
$3 billion
— Potential annual savings from changing work rules and compensation of employees.
$1.2 billion
— Recurring savings from a one-year wage freeze for city employees.
$13 billion
— Record level of capital commitments reached in the current year.
$8.6 billion
— Projected debt service over the next four years.
$1.1 billion
— Drawdown from the Retiree Health Insurance Trust Fund over three years.
New York City's pension and retiree health benefit costs are rising rapidly, with pension funding costs growing 230 percent since 2003 and retiree health care spending projected to reach $1.9 billion by 2013. To address this fiscal pressure, the city should implement a new, less costly pension tier for future workers, require retiree contributions to health premiums, and eliminate supplemental 'Christmas bonuses' for police and firefighters.
Recommendations related to City Spending Trends
The city should create a new 'tier' for future workers that would provide less costly benefits.
The city should require retiree contributions to health premiums to help manage fiscal pressure.
The city should work to lower or end the police and firefighter 'Christmas bonuses' to achieve necessary savings.
Key Data
230 percent
— The growth in the annual cost of funding pensions since fiscal year 2003.
$7.6 billion
— The projected city pension-fund contribution amount by fiscal year 2013.
$10.2 billion
— The amount paid in benefits to New York City's retirees annually.
$1.9 billion
— The projected city spending on health care for retirees in fiscal year 2013.
New York City's park system has expanded significantly, but managing these assets requires addressing fiscal challenges, including the need for more transparent partnerships with nonprofit organizations and better alignment of maintenance funding. The city should implement strategic planning and create stronger incentives for generating earned revenue to ensure all parks are maintained in an acceptable condition.
Recommendations related to City Spending Trends
Create a stronger incentive for increasing concessions and other earned revenues by dividing growth in these revenues between the City’s general fund and a new fund dedicated to parks improvements.
Bring all parks to an acceptable condition.
Improve productivity in parks maintenance and operations.
Encourage preventive maintenance and longer periods of usefulness by funding routine repairs and replacements in the operating budget.
Institutionalize responsibility for strategic planning for parks.
Make the relationships between the DPR and its nonprofit partner organizations more transparent and consistent with core guidelines.
Key Data
$780 million
— Total City funds for Department of Parks and Recreation facilities in fiscal year 2006.
$394 million
— Amount needed to bring major Department of Parks and Recreation assets to a state of good repair in fiscal year 2007.
$81 million
— Total revenue generated by the Department of Parks and Recreation in fiscal year 2006.
$48.1 million
— Concession revenue generated by the Department of Parks and Recreation in fiscal year 2006.
$288 million
— Department of Parks and Recreation operating budget in fiscal year 2006.
$246 million
— Department of Parks and Recreation capital expenditures in fiscal year 2006.
New York City's current budget structure fails to effectively link financial allocations to specific program performance, hindering accountability and transparency. To improve service delivery, the city should reorganize its budget to better track program outcomes, adopt efficiency measures, and utilize comparative benchmarking and citizen feedback to drive results.
Recommendations related to City Spending Trends
City leaders should connect money and performance in the budget by reorganizing it to better track programs and program performance.
The city should focus on efficiency measurement by making the measurement and reporting of unit costs a high priority in every service area.
Leaders should improve outcome measurement and reporting by pushing to develop and track desired results for every service area.
New York City should develop and present comparative performance measures so that residents can compare the caliber of their services to those provided by other competitor cities.
The city should expand the use of citizen-derived outcome measures by measuring public perception of city services through satisfaction surveys.
Key Data
$54 Billion
— The total size of the New York City enterprise.
24 out of 30
— The number of countries participating in a 2005 OECD study that were reporting performance results to the public.
24 out of 30
— The number of the largest U.S. cities that publish performance metrics in their budgets.
$4.9 Billion
— The amount of spending represented by the single unit of appropriation for 'General Education Instruction and School Leadership' in the fiscal year 2007 budget.
$2.4 Billion
— The amount of spending covered by the 'Operations' unit of appropriation in the Police Department's budget.
13.2 Million
— The number of calls handled by the 3-1-1 service center in fiscal year 2006.
New York City's public sector compensation, including wages and retirement benefits, has become significantly more expensive than private sector equivalents, creating unsustainable long-term fiscal pressures. To address these rising costs, the city should transition to defined contribution pension plans and reform retiree health insurance contributions to align with broader market standards.
Recommendations related to City Spending Trends
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans.
The City should increase required employee pension contributions, as the current 3 percent requirement is lower than most other systems.
The City should raise the minimum age requirement for retirement to align with federal Social Security thresholds.
Pension benefits should be based on a standard definition of final average salary that excludes overtime and other supplements.
The City should define work-related disabilities more rigorously to prevent the broadening of access to benefits without clear evidence of a work-related cause.
The City should eliminate the variable supplements, or 'Christmas bonuses,' available to some retired uniformed workers.
The City should require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
The City should stop reimbursing retirees for Medicare Part B premiums to align with practices of other large employers.
Key Data
$3.2 billion
— City contribution to pension funds in fiscal year 2005.
$927 million
— City payments for health insurance for retirees in fiscal year 2005.
$35.16
— Average hourly total compensation cost for public employers in 2004.
$23.90
— Average hourly total compensation cost for private-sector employers in 2004.
$325 million
— Estimated savings for the City in fiscal year 2004 if retirees were required to pay 50 percent of health insurance premiums.
$131 million
— Estimated savings for the City in 2004 if it stopped reimbursing retirees for Medicare Part B premiums.
New York City's 'non-discretionary' spending, which consumes half of locally-raised revenues, is projected to grow to $25 billion by fiscal year 2009, creating a significant financial burden. By implementing reforms to pension plans, health insurance contributions, Medicaid eligibility, and debt management, the city could save nearly $2.5 billion annually.
Recommendations related to City Spending Trends
The City should establish a new and more affordable pension plan for new workers through State legislation.
The City should share the cost of health insurance premiums with workers by requiring 10 percent for individual policies and 20 percent for family policies.
Retirees should be required to pay 50 percent of their health insurance premiums and the City should stop paying for their Medicare Part B premiums.
The City should limit eligibility loopholes in State laws and local administrative practices that enable middle-class and wealthier individuals to qualify for Medicaid-financed long-term care.
The City should pay only competitive costs to hospitals and nursing homes for Medicaid services, as New York State currently pays significantly more than necessary.
The City should increase managed care participation for Medicaid, as it is a win-win arrangement under which taxpayers save money and needy clients get better care.
The City should limit excessive personal care services in the Medicaid program, as the current program pays for many more hours of home attendant services than permitted in any other state.
The City should lower debt service by refinancing to convert high-interest debt to low-interest debt.
The City should reduce capital spending or build more efficiently to lower the amount of debt service due in future years.
The City should pay off debt with the large operating surplus it has accumulated in fiscal year 2005 rather than using it to support recurring expenses.
Key Data
$2.5 billion
— The amount of annual savings the City could achieve by implementing four specific policy reforms.
$19 billion
— The amount of 'non-discretionary' spending in fiscal year 2005.
$25 billion
— The projected amount of 'non-discretionary' spending by fiscal year 2009.
$549 million
— The annual savings in fiscal year 2009 from pension reform.
$1,197 million
— The annual savings in fiscal year 2009 from health insurance reforms.
$454 million
— The annual savings in fiscal year 2009 from Medicaid cost containment.
New York City faces an unprecedented $6.4 billion budget gap for fiscal year 2003-04, necessitating structural changes rather than temporary borrowing or gimmicks. Implementing five specific efficiency measures, including a 40-hour work week for civilian employees and rationalized police staffing, could generate over $1 billion in annual savings.
Recommendations related to City Spending Trends
The City should require civilian employees not currently working a 40-hour week to adopt a 40-hour work week to allow for the elimination of approximately 8,500 positions.
New York City should streamline its procurement process by replacing the Mayor’s Office of Contracts with a new entity, implementing an advanced e-procurement system, and changing the legal framework.
The City should restructure special education by moving students to less restrictive environments, utilizing more preventive services, and streamlining support services.
The Police Department should implement more rational staffing by rescheduling the work day, reassigning officers to civilian-appropriate roles, and reducing the use of overtime for predictable duties.
Municipal agencies should centralize energy conservation responsibility, offer incentives for conservation, and double the annual volume of energy upgrades.
Key Data
$1 billion
— Total annual savings identified through five specific proposals to lower the cost of government.
$6.4 billion
— Projected budget gap for New York City in fiscal year 2003-04.
$498 million
— Estimated annual savings from requiring civilian employees to work a 40-hour week.
$267 million
— Estimated annual savings from restructuring special education services.
$251 million
— Estimated annual savings from implementing more rational staffing at the Police Department.
$197 million
— Estimated annual savings from streamlining the City's procurement process.
Requiring the city's 80,000 non-managerial civilian employees to work a 40-hour week instead of the current 35-hour standard could eliminate 8,500 positions and generate $498 million in annual savings. This shift would require implementing strategies like work-sharing across agencies, consolidating job titles, and relocating staff to more centralized offices to overcome operational obstacles.
Recommendations related to City Spending Trends
Those civilians not working a 40-hour week should be required to increase their workweek to 40 hours.
For workers in job titles with fewer than eight incumbents, the shift to a 40-hour week should be accompanied by the sharing of work across agencies and combining tasks now limited to narrowly defined job descriptions, known as 'broad-banding.'
For employees at smaller locations, the shift to a 40-hour week should be accompanied by relocation to more concentrated offices or dividing time among two or more locations.
Peak-hour demand for services should be met by increasing part-time staff during the peak periods rather than increasing full-time staff.
Key Data
$498 million
— Estimated annual savings to the City from requiring all non-managerial civilian employees to work a 40-hour week.
8,500
— Number of positions that could be eliminated if all non-managerial civilian employees worked a 40-hour week.
$58,000
— Average savings per worker, including salary, fringe benefits, and space costs, achieved by moving to a 40-hour workweek.
80,000
— Total number of non-managerial civilian employees in the City of New York.
1,556
— Total number of different work locations for civilian, non-managerial employees.
New York City's procurement process is hampered by excessive paperwork, fragmented oversight, and outdated technology, leading to long contract cycles and higher costs. Implementing a centralized procurement entity, adopting an advanced e-procurement system, and updating legal frameworks could save the city at least $135 million annually.
Recommendations related to City Spending Trends
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.
No City employees should be PPB members, and members should have fixed terms.
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
— Total spent by the City on construction, goods, and services in fiscal year 2001.
12 million
— Latest estimate of the number of sheets of paper produced to execute procurements.
$135 million
— Minimum annual savings from implementing the recommended procurement reforms.
$200 million
— Likely annual savings from implementing the recommended procurement reforms.
$75
— Estimated savings per transaction with an advanced e-procurement system.
142,000
— Number of transactions completed by the City per year.
New York State's fragmented health insurance subsidy programs, including Medicaid, Child Health Plus, and Family Health Plus, suffer from high administrative costs and inefficient eligibility determination processes that often exclude eligible residents. Implementing an integrated eligibility system, supported by a centralized information system and community-based enrollment, would improve outreach and reduce the significant administrative expenses currently associated with these programs.
Recommendations related to City Spending Trends
The Governor should take the lead in this effort and give the Health Commissioner primary responsibility for redesigning the health insurance subsidy system and its supporting information systems.
The State should integrate eligibility determination for major health insurance programs into a new system independent of the current public assistance eligibility bureaucracy.
The State should establish multiple, common access points for eligibility and recertification with staff at these offices following uniform procedures across the state.
The State should maintain a statewide master eligibility file for all programs to allow individuals to move easily between programs when their income or other conditions change.
The State should begin a longer-term process of integrating eligibility determination for all major means-tested programs, including non-health programs.
The State should integrate Food Stamp eligibility determination with health insurance program eligibility determination.
The State should test using school lunch program administrators as facilitated enrollers for health insurance programs.
The State should coordinate Earned Income Tax Credit benefit determination with health insurance subsidy eligibility determination.
Key Data
$68 million
— Cost of 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
$117
— Administrative cost per recipient for 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
$21 billion
— Annual cost of the Medicaid program in New York State.
$464 million
— Annual Child Health Plus appropriation in federal fiscal year 1999.
$248 million
— Administrative costs of public assistance in New York City in fiscal year 2000.
$392 billion
— Annual expenditures for almost 80 different means-tested programs in 1998.
New York City's fiscal management faces challenges as headcount reaches a 25-year high and spending growth outpaces inflation. Despite rising debt service costs, the city has failed to implement significant productivity improvements or reform debt practices to better manage its $36 billion capital plan.
Recommendations related to City Spending Trends
The City should enact significant productivity improvements and invest wisely in its infrastructure to deliver more competitive services.
The City should use existing facilities, such as schools, more intensively, better maintain its assets, work to repeal the burdensome Wicks Law, and set effective limits on borrowing to improve the capital plan.
The City should pursue a comprehensive reform of the City’s debt practices to limit debt service growth.
Key Data
8 percent
— The annual growth rate of City debt service payments over the next four years.
$36 billion
— The total value of the City's five-year capital plan.
25 years
— The period over which City headcount has increased to its highest levels.
New York City's municipal workforce compensation, which accounts for half of all city expenditures, requires a new labor relations strategy to improve service quality and fiscal sustainability. By shifting pay structures toward performance, modernizing health insurance, and restructuring pension systems, the city could achieve net savings of $1.4 billion by fiscal year 2004 while better aligning wages with labor market conditions.
Recommendations related to City Spending Trends
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.
$1.4 billion
— Net savings to taxpayers in fiscal year 2004 from implementing the Commission's recommendations.
$798 million
— Recurring annual cost of pension enhancements added in 2000 outside of collective bargaining.
$150 million
— Cost of well-targeted, one-time “catch-up” raises for shortage occupations.
$138 million
— Annual savings from five specific changes in the Fire Department.
$1.6 billion
— Additional cost of agreements that would increase wages at the projected rate of inflation in fiscal year 2004.
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