Efficiency savings in New York City government involve recurring actions to reduce spending, improve productivity, and streamline operations to ensure fiscal stability. This page covers CBC’s work on recurring budget-balancing measures, procurement reform, performance management systems, school budget alignment, and labor productivity initiatives.
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Modify the Charter to require the City to conduct a statistically valid and representative resident feedback survey at least every four years.
Establish a comprehensive performance management system that promotes quality and efficiency through robust data and management review processes.
Improve the Mayor’s Management Report to include a portfolio of indicators for each agency and major program, including input, output, outcome, quality, and efficiency metrics.
Require the Mayor and City Council to enact a local law that details the City’s Rainy Day Fund deposit, withdrawal, and target size policy.
Double Executive Order 12 saving initiatives to $2 billion in fiscal year 2027 and increase by $1 billion annually thereafter.
Implement additional actions to reduce costs stemming from CityFHEPS, due process (Carter) cases, and other fast-growing areas.
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
In June 2026, the CBCNY reported that the City's $3 billion savings program was an insufficient start to transform government, with only 26% of Executive Order 12 initiatives actually increasing efficiency, while the rest relied on re-estimates and vacancy reductions.
A March 2026 report noted that the State Comptroller's pre-contract review is highly efficient, taking on average only 7 days, with 90% of contracts reviewed within 15 days, which helps deter corruption and reduce taxpayer costs.
As of November 2025, the CBCNY identified operational inefficiencies in City services, noting that the cost per ton of recycling collected increased from $668 to $805 between fiscal years 2019 and 2024, and 40% of contracted infant/toddler day care slots were unfilled in fiscal year 2025.
In September 2025, the CBCNY commended the MTA for finding more than $500 million in recurring operating efficiencies over the past several years, though it noted that further work rule changes are needed to stabilize the operating budget.
In December 2024, the CBCNY cited a Department of Design and Construction analysis showing that joint bidding on street construction projects reduced utility-related delays from 28 months to 7 months, avoiding $4.3 million in additional costs per project and generating about $1 million in City revenue per project.
New York City should amend its Charter to mandate regular resident feedback surveys, implement a comprehensive performance management system, and improve the Mayor’s Management Report to better track outcomes and efficiency. Additionally, the City must establish clear legal rules for Rainy Day Fund deposits and withdrawals to ensure long-term fiscal stability.
Recommendations related to Efficiency Savings
Modify the Charter to require the City to conduct a statistically valid and representative resident feedback survey at least every four years.
Establish a comprehensive performance management system that promotes quality and efficiency through robust data and management review processes.
Improve the Mayor’s Management Report to include a portfolio of indicators for each agency and major program, including input, output, outcome, quality, and efficiency metrics.
Require the Mayor and City Council to enact a local law that details the City’s Rainy Day Fund deposit, withdrawal, and target size policy.
The City's fiscal plan relies heavily on one-time resources and short-term savings, with only 39 percent of budget-balancing actions providing recurring impact. To achieve long-term sustainability, the City must prioritize meaningful, recurring efficiency savings and increase reserves rather than relying on temporary fixes.
Recommendations related to Efficiency Savings
Double Executive Order 12 saving initiatives to $2 billion in fiscal year 2027 and increase by $1 billion annually thereafter.
Implement additional actions to reduce costs stemming from CityFHEPS, due process (Carter) cases, and other fast-growing areas.
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
$3.0 billion
— Total value of the savings program, which represents about one-quarter of the total plan.
26 percent
— Portion of fiscal year 2027 savings that are efficiency measures.
$284 million
— Amount of efficiency-driven savings in fiscal year 2027.
$1.8 billion
— Savings generated by Executive Order 12 initiatives over two years.
$100 million
— Projected savings from annual audits of the eligibility of dependents covered under the City’s employee health insurance plans.
$500 million
— Projected efficiency savings in fiscal year 2030.
Sherif Soliman has more than 30 years of experience in government and currently serves as Budget Director of the New York City Mayor’s Office of Management and Budget. In this role, he oversees the city’s fiscal policy, including the development of the expense and capital budgets, the city’s bond and…
New York City faces significant economic challenges, including outmigration and declining business headquarters, which require a budget that prioritizes efficiency and service quality over increased spending. To improve fiscal stability and competitiveness, the city must implement targeted savings, such as reforming procurement and aligning school budgets with enrollment, rather than raising taxes or expanding spending.
Recommendations related to Efficiency Savings
Relief from Albany’s class size mandate could unlock $1.2 billion in efficiency savings while preserving smaller classes where they matter most.
Aligning school budgets with declining enrollment could save $400 million.
Fixing procurement could yield $700 million in efficiency savings.
Maintaining current city-funded housing vouchers would save $330 million.
The mayor and City Council should adopt a sound budget that improves services, expands effective programs, and eliminates ineffective ones.
The Chief Savings Officers must dig deeper to eliminate spending that isn’t serving people well.
Key Data
$1.2 Billion
— Potential savings from relief from Albany’s class size mandate.
$400 Million
— Potential savings from aligning school budgets with declining enrollment.
$700 Million
— Potential savings from fixing procurement.
$330 Million
— Potential savings from maintaining current city-funded housing vouchers.
$1.1 Billion
— The mayor's current recurring savings target.
Mandating two-person subway crews prevents the adoption of one-person train operation, a global industry standard that allows for greater operational efficiency. This legislative restriction risks wasting billions of dollars in capital investments intended to modernize subway signals and improve service quality.
Recommendations related to Efficiency Savings
Legislators should oppose S9586 and A10706, which would restrict the MTA’s use of one-person train operation.
The MTA should be allowed to leave operational strategies and decisions to management to ensure the most flexible path to high-quality service at the lowest cost.
The MTA should be able to follow facts and implement national and international best practices for staffing and technology investments.
Legislators should focus efforts on forward-looking investments, rather than policies micromanaging subway staffing and operations.
Key Data
less than 6%
— of 400 rail lines around the world use two or more train operators.
$5.4 billion
— in the 2025-29 capital program spent on modernizing subway signals.
$5.0 billion
— in the 2020-24 capital program spent on modernizing subway signals.
Maintaining the Comptroller's pre-audit review of state contracts and ensuring competitive bidding are essential to preventing waste, corruption, and unnecessary costs to taxpayers. Proposals to erode this oversight authority and exempt billions in contracts from competitive bidding threaten the integrity of government procurement and risk significant financial mismanagement.
Recommendations related to Efficiency Savings
State lawmakers and the Governor should maintain the Comptroller’s current authority to review state contracts before they are executed to ensure fiscal oversight.
The State must ensure contracts are competitively bid to the maximum extent to prevent waste and reduce costs to taxpayers.
The Assembly and Senate should stand firm in their rejection of budget changes that would erode the Comptroller's pre-audit authority.
Policymakers should focus on substantial procurement improvements, such as assisting agencies with writing Requests for Proposals (RFPs), rather than limiting oversight.
The Governor and Legislature should strive to ensure the integrity of government contracting rather than undermining it through uncompetitive procurements.
Key Data
$3 billion
— Amount of Executive budget proposals eroding the Comptroller’s pre-audit authority that the Legislature rejected.
$2.76 billion
— Total value of contracts the Executive Budget proposes to exempt from the competitive bidding process in 36 instances.
$2.8 billion
— Value of contracts that would continue to be or be newly bid uncompetitively under the proposed budgets.
$1 billion
— Amount of taxpayer money that would be diverted into vendors’ pockets without the Comptroller’s scrutiny due to increased dollar thresholds.
$2 billion
— Value of unexamined funds resulting from the proposal to eliminate Comptroller pre-audit review for purchases from centralized contracts.
7 days
— Average time it takes for the Comptroller’s office to complete a pre-contract review.
Mayor Mamdani's initial savings plan is a positive first step, but the administration must exceed the current $1.7 billion target to achieve meaningful fiscal results. Achieving an affordable government requires a fundamental transformation in operations and the elimination of spending that does not directly benefit New Yorkers.
Recommendations related to Efficiency Savings
The administration must go much further than the current $1.7 billion savings target to achieve necessary fiscal goals.
The administration must be as ambitious about government efficiency as it is about affordability.
The city must pursue a real transformation on how we run government by eliminating spending that does not help New Yorkers.
Key Data
$1.7 billion
— The current savings target set by the administration.
New York City's preliminary budget relies on tax increases and one-time resources to close a $9.4 billion gap, rather than implementing necessary structural reforms. To achieve long-term fiscal stability, the city should prioritize operational efficiency, reduce ineffective spending, and rebuild its depleted reserves.
Recommendations related to Efficiency Savings
The City should reduce ineffective spending and improve operational efficiency, including relief from the State class size reduction mandate ($1 billion), consolidating union welfare funds ($200 million), and more within agency programs and by leveraging technology and eliminating redundant bureaucracy.
The City should right-size spending in areas where demand has changed, such as adjusting school funding to reflect declining enrollment ($400 million), and maintaining the number of FHEPS housing vouchers ($330 million).
The City should implement procurement reform to generate $700 million in savings by modernizing purchasing practices and improving competition.
The City should reduce the number of vacant positions—currently nearly 20,000 positions, including 16,000 full-time positions, are vacant—and then let agencies hire to fill those vacancies.
Key Data
$1 billion
— Recurring annual savings included in the Preliminary Budget, which is far below the level needed to put the City on a sustainable fiscal path.
$1 billion
— Potential annual savings from obtaining relief from the State class size reduction mandate.
$700 million
— Potential savings from procurement reform by modernizing purchasing practices and improving competition.
$400 million
— Potential annual savings from adjusting school funding to reflect declining enrollment.
$330 million
— Potential annual savings from preserving the number of CityFHEPS housing vouchers at its current level.
$200 million
— Potential savings from consolidating union welfare funds.
New York City's preliminary budget for fiscal year 2027 relies on depleting reserves and avoiding tax hikes, but significant opportunities exist to improve efficiency and reduce spending. By pursuing reforms such as adjusting school funding for declining enrollment, consolidating union welfare benefit funds, and securing relief from state mandates, the city could achieve substantial savings without raising taxes.
Recommendations related to Efficiency Savings
The Administration should eliminate spending that does not improve New Yorkers’ lives and make government more efficient and effective.
The City should secure relief from the State class size mandate to achieve up to $1 billion in savings.
The City should adjust school funding for declining enrollment to realize $400 million in savings.
The City should consolidate union welfare benefit funds to save $200 million.
The City should pursue procurement reform to identify additional savings.
The City should comb through agencies as Executive Order 12 directs to identify additional savings.
The Mayor should partner with municipal unions to redesign work processes and broaden responsibilities to increase government efficiency.
The City should streamline operations by using technology and eliminating wasteful bureaucratic processes.
Key Data
$1 billion
— Potential savings from securing relief from the State class size mandate.
$400 million
— Potential savings from adjusting school funding for declining enrollment.
$200 million
— Potential savings from consolidating union welfare benefit funds.
$127 billion
— Total City budget that the Mayor should ensure is used well.
$6.7 billion
— Projected budget gap in fiscal year 2028.
$100 million
— Reduced in-year reserves, leaving virtually no budget cushion.
New York City's fiscal challenges stem from excessive spending growth, which has consistently outpaced inflation over the last decade. To close budget gaps, the city should implement a multi-year improvement plan focused on operational efficiency, productivity, and evidence-based service redesign rather than tax increases.
Recommendations related to Efficiency Savings
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 be given appropriate ambitious targets, but savings should be prioritized to preserve critical services and not uniform across the board.
Agencies should identify efficiencies based on aligning staffing and workload, streamlining administrative functions, leveraging technology to automate manual processes, and eliminating or redesigning programs that have not demonstrated effectiveness.
The City should 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
— Amount the City spent more than it received over the past three years.
$15 billion
— Amount the City would be spending less today had spending merely kept pace with inflation over the last decade.
New York City faces a significant budget shortfall that requires immediate action through the streamlining of operations, the elimination of wasteful bureaucratic processes, and the implementation of a citywide performance management system. Rather than raising taxes, the administration should prioritize fiscal responsibility by cutting unproductive spending and modernizing labor relations and technology to improve public services.
Recommendations related to Efficiency Savings
The City should spend its $120 billion budget efficiently on effective programs before considering asking New Yorkers for more.
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.
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 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, partly to support high-performing schools serving low-need students.
Key Data
$8 billion
— The estimated budget gap facing New York City.
$2.3 billion
— The amount the City spent more than it received over the past three years.
$3 billion
— The annual cost to the City due to the shrinking share of the nation's millionaires.
17.44%
— The top combined corporate tax rate in New York City compared to 11.5 percent in New Jersey.
$15 billion
— The amount lower City spending would be today had it kept pace with inflation since 2017.
19 percent
— The increase in City spending since 2023.
New York City faces a projected fiscal year 2027 budget gap approaching $8 billion, driven by spending growth that has outpaced inflation by double. To address this, the City must prioritize high-impact programs, modernize operations, and restructure government to achieve efficiency rather than relying on tax increases.
Recommendations related to Efficiency Savings
The Mayor should comb through City programs to identify and protect those that deliver significant positive impact and shrink those that do not.
The City should leverage technology, modernize outdated operations, and work with labor to boost productivity.
The spending plan should reflect the reported $1 billion in savings from rebidding the City’s health insurance plan.
The City should lay out a multi-year effort to restructure City government to be more efficient and results driven.
The State should repeal the class size mandate, which restricts the Mayor’s flexibility and drives higher spending.
The City should prioritize what works and shrink what doesn’t before turning to the easier option of raising taxes.
Key Data
$8 billion
— Estimate of the City’s fiscal year 2027 budget gap.
$14.5 billion
— Amount City spending would be lower today if it had tracked inflation.
$1 billion
— Savings from rebidding the City’s health insurance plan.
The incoming administration faces a significant budget gap and must implement disciplined financial management to restore fiscal stability and improve service quality. By prioritizing high-impact services, streamlining operations, and leveraging technology, the city can align spending with revenues and ensure long-term fiscal health.
Recommendations related to Efficiency Savings
The Administration should implement a savings plan that streamlines operations, reduces duplication, phases out lower-impact programs, leverages technology to automate manual processes, and increases productivity in collaboration with labor unions.
The Administration should identify the impact and cost-effectiveness of each service, preserve what works well, and cut or shrink what does not, even if popular.
The Administration should launch a citywide Performance Management System, similar to CompStat, to deliver the efficient high-quality services New Yorkers deserve.
The City should shift from a siloed to a flexible agencywide approach to allocate vacant positions, eliminating those in excess.
The Mayor should pursue a collaborative relationship with labor that recognizes their shared interest in a thriving city and a sustainable, efficient municipal government.
Key Data
$4.5 billion
— The amount by which the City's projections understate fiscal year 2027 spending.
$2.3 billion
— The cumulative amount by which annual expenses exceeded annual revenues over the past three fiscal years.
13 percent
— The decline in public school enrollment since school year 2015-16.
40 percent
— The portion of contracted infant/toddler day care slots that were unfilled in fiscal year 2025.
19,302
— The number of full time and full-time equivalent vacant positions in the City as of June 2025.
$787 million
— The amount the statewide cost shift would be reduced annually if the SNAP administrative error rate is brought back to its historical range.
Extending the authorization of joint bidding for public works contracts allows the city to simultaneously bid on capital projects and utility relocation work, preventing costly delays and private negotiations. This process streamlines construction planning and avoids the higher costs associated with utility interference that are ultimately passed on to ratepayers.
Recommendations related to Efficiency Savings
The Governor should sign S8404/A8679 and S8405/A8678 to extend authorization of joint bidding on public works contracts in lower Manhattan and in the rest of the city for one year.
The Metropolitan Transportation Authority faces a structural budget gap exceeding $800 million annually, necessitating fare and toll increases alongside continued efforts to curb expenses and fare evasion. To ensure reliable service, the agency must secure further recurring operating efficiencies and negotiate productivity-enhancing work rule changes with labor unions.
Recommendations related to Efficiency Savings
The MTA should continue to rein in expenses to address its structural budget gap.
The MTA should continue efforts to reduce fare and toll evasion, which costs the system hundreds of millions of dollars annually.
The MTA and labor unions should pursue work rule changes during upcoming contract negotiations to increase productivity and operational flexibility.
Key Data
$500 million
— Amount in recurring operating efficiencies found by the MTA over the past several years.
$800 million
— Annual structural budget gap between the MTA's recurring revenues and recurring expenses.
$1 billion
— Estimated amount lost by the MTA to fare and toll evasion last year.
$900 million
— Estimated amount the MTA is on track to lose to fare and toll evasion this year.
$345 million
— MTA operating budget gap projected for 2027.
$350 million
— Annual revenue expected from the proposed fare and toll increases.
Prohibiting one-person train operation on New York City subways would cost the transit system $10 million annually and prevent $442 million in potential yearly savings that could be reinvested into service improvements. Maintaining management's ability to implement modern operating methods like one-person train operation is essential for ensuring efficient, reliable, and cost-effective public transit.
Recommendations related to Efficiency Savings
The Governor should veto A4873/S4091, which would prohibit the Metropolitan Transportation Authority from using one-person train operation.
The state should allow the MTA to use OPTO to improve subway efficiency and service as transit technology is modernized.
State laws should focus on ensuring agencies are high performing and transparent, and that management is accountable.
The MTA should be permitted to leave operational strategies and decisions to management to ensure the best, most flexible path to high quality service at the lowest cost.
Key Data
$442 million
— Estimated annual savings from using OPTO systemwide, which could be reinvested to close the MTA’s structural operating budget gap or improve service.
$10 million
— Estimated annual cost to the MTA if it were forced to cease using OPTO on the A, G, M, 5, and all shuttle services.
The New York City fiscal year 2026 budget agreement fails to prepare for potential federal cuts and future recessions, leaving future budget gaps of more than $9 billion. To ensure stability, the city must prioritize critical services while increasing efficiency and reducing low-impact programs.
Recommendations related to Efficiency Savings
The City must stabilize the budget and secure the future by increasing efficiency and shrinking low impact programs.
The City can be more affordable, safe, and stable, but only if it prioritizes critical services, manages them to deliver results, and protects its fiscal foundation.
The City should put aside $3 billion to soften the first blows of federal cuts and protect against a future recession.
Key Data
$3 billion
— Amount that should be set aside to soften the first blows of federal cuts and protect against a future recession.
$9 billion
— Projected future budget gaps after accounting for underbudgeted expenses.
$11 billion
— Amount of revenue a typical recession would sap over two years.
Mayoral candidates for New York City were surveyed on their strategies for fiscal management, with many emphasizing the need to address government inefficiencies, reduce excessive overtime, and improve capital project delivery. The responses highlight a consensus on the importance of fiscal discipline, though approaches vary regarding specific savings plans, tax policies, and the management of city agencies.
Recommendations related to Efficiency Savings
I will create revenue by recovering $2B+ in unpaid city fines & fees; taxing vacant luxury apts; ending corporate property tax exemptions; cutting excessive NYPD overtime & property tax reform for MSG.
I will work with agencies to set multi-year savings targets that yield recurring, long-term savings.
We need immediate fiscal discipline—not budget bloat masked by short-term revenue spikes.
New York City must implement rigorous fiscal discipline by modernizing procurement, streamlining capital spending, and utilizing performance-based budgeting to eliminate waste. By prioritizing evidence-based programs and cutting ineffective initiatives, the city can improve service delivery while ensuring long-term financial stability.
Recommendations related to Efficiency Savings
Run regular Programs to Eliminate the Gap (PEGs) smartly to save money.
Modernize procurement to boost competition and cut costs.
Reward labor productivity and share the savings.
Use PEGs not just to cut but to improve and prioritize.
Drop what doesn’t work—no matter how popular.
Overhaul capital spending: better manage assets and projects, fix procurement, and control costs.
Avoid waste—choose standardized over customized designs, and don’t build schools when redistricting can solve the problem.
Modernize NYCHA: cut costs, speed up repairs, and quickly unlock capital through RAD/PACT and the Preservation Trust.
Use tax incentives that work and scrap the ones that don’t.
Key Data
$115 billion
— The annual amount the City spends, which requires better management to ensure services are worth the money.
New York City faces significant fiscal risks from potential federal budget cuts, exacerbated by current spending that exceeds revenue and annual underbudgeting that obscures future deficits. To maintain essential services and economic stability, the city must implement immediate fiscal discipline, including streamlining administrative overhead and bolstering financial reserves.
Recommendations related to Efficiency Savings
The city should hold the line on new spending by ensuring the Executive and Adopted Budgets do not add or expand programs that it cannot afford.
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, ensuring the fund is reserved for short-term emergencies rather than mitigating recurring federal cuts.
The city should restrain spending growth by identifying actions to streamline administrative overhead and increase efficiency to minimize service disruptions and shrink programs that provide less value.
The city should end budget-estimating gimmickry to ensure New Yorkers receive accurate and reasonable estimates of revenue and expenses as required by the City Charter.
Key Data
$1.1 billion
— Amount the city spent more on fiscal year 2024 obligations than it took in.
$4 billion
— Annual amount of underbudgeting that drastically understates the size of future gaps.
$10 billion
— Potential size of future budget gaps even without federal cuts or a recession.
$1 billion
— Recommended addition to the fiscal year 2026 General Reserve to help absorb the immediate blow of federal cuts.
$500 million
— Recommended addition to the Rainy Day Fund to prepare for short-term emergencies.
This year, voters will choose the next New York City Comptroller, who will play a critical role holding the City Administration accountable, managing five pension funds with $280 billion in assets, and partnering in the issuance of billions of dollars of City debt. The Comptroller is important to New York City's fiscal…
$35 billion is how much of the MTA's 5-year capital plan remains unfunded. Investing in the MTA’s crumbling infrastructure is one of the most important decisions Albany will make this year; New York's economy, quality of life, and the region's competitiveness depend on it. At a recent CBC event, MTA…
Joint bidding for capital projects allows the City to coordinate utility work simultaneously with construction, significantly reducing project delays and associated costs. Analysis shows that this method cuts utility-related delays from 28 months to 7 months, saving $4.3 million per project while generating $1.0 million in revenue.
Recommendations related to Efficiency Savings
We would support future legislation to permanently authorize joint bidding.
The evidence demonstrates the benefits of joint bidding and justifies not only a one-year extension but permanent authorization.
Key Data
$86.7 billion
— The total value of the September Capital Commitment Plan covering fiscal years 2025 to 2028.
$164.8 billion
— The total value of the most recent Ten-Year Capital Strategy covering fiscal years 2024 to 2033.
28 months
— The average delay resulting from utility work for street construction projects bid under the traditional method.
7 months
— The average delay resulting from utility work for street construction projects bid using joint bidding.
$4.3 million
— The additional cost added to each project without joint bidding due to 21 months of delay.
$1.0 million
— The amount of City revenue generated per project through joint bidding cost sharing agreements.
New York City faces future budget gaps exceeding $8 billion annually, significantly higher than the $5.5 billion figure reported by the administration. To address these shortfalls, the city must prioritize critical services, improve operational efficiency, and reduce spending on lower-impact programs.
Recommendations related to Efficiency Savings
The Administration should prioritize critical programs to balance the budget and serve New Yorkers.
The Administration should increase efficiency to balance the budget and serve New Yorkers.
The Administration should shrink spending on lower-impact programs to balance the budget and serve New Yorkers.
The Administration should start taking steps now to close next year’s gap in January’s Preliminary Budget.
Key Data
$3 billion
— The amount by which the budget continues to low-ball spending for ongoing programs annually in future years.
$8 billion
— The amount of future budget gaps the City will actually face annually.
$5.5 billion
— The amount of future budget gaps reported by the City.
Congestion pricing is expected to generate significant economic benefits by reducing the $20 billion annual cost of excess traffic and helping to close the $15 billion shortfall in the Metropolitan Transportation Authority's capital budget. To ensure long-term fiscal stability, the transit system must prioritize increasing operational efficiency and aggressively curbing fare evasion.
Recommendations related to Efficiency Savings
The MTA must identify ways to increase efficiency and adjust priorities to reflect changing demands on the transit system.
The MTA must redouble efforts to dramatically reduce fare evasion, which has stressed the budget and makes financing capital investment harder.
Key Data
$20 billion
— Estimated annual cost of excess congestion that could be reduced through more efficient movement of people and goods.
$15 billion
— Shortfall in the current capital budget of the Metropolitan Transportation Authority that congestion pricing revenues will help close.
The Mayor’s Management Report currently focuses on inputs and outputs rather than outcomes, quality, and efficiency, failing to provide the actionable data needed to assess cost-effectiveness or program performance. To improve accountability and management, the City should integrate outcome-based metrics, link performance to granular spending data, incorporate resident feedback, and establish clear performance targets.
Recommendations related to Efficiency Savings
The City should add outcome, quality, and efficiency metrics that demonstrate how well the City is doing its work.
The City should link performance metrics to more granular expenditure data, such as the budget function analysis.
The City should incorporate a periodic, statistically valid, representative resident feedback survey that provides New Yorkers’ ratings on quality of life and government services.
The City should include more performance targets and a direction for the targets to move.
The City should utilize the DMMR to provide geographic data for select indicators.
Key Data
66.4%
— Share of restaurants inspected in fiscal year 2024, down from 99.5% in fiscal year 2019 and 83.4% in fiscal year 2023.
$57 million
— Spending on HRA food assistance programs in fiscal year 2023, an increase from $27 million in fiscal year 2022.
46.7 million pounds
— Amount of food distributed by City Food Connection in 2023, up from 17.8 million pounds in 2022.
$1.26
— Average cost per pound of food distributed in fiscal year 2023, down from $1.51 the year before.
25%
— Percentage of indicators in the 2024 PMMR that include numerical targets.
3,026
— Number of deaths from unintentional drug overdoses in fiscal year 2023, up from 2,103 in fiscal year 2021.
The MTA's proposed 2025-2029 capital plan is currently too large to be achievable and relies on unaffordable debt, necessitating a reduction in scope and a focus on essential repairs over expansion. To stabilize finances, the agency must prioritize efficiency by reducing fare evasion and increasing labor productivity while securing sustainable funding sources.
Recommendations related to Efficiency Savings
The MTA should trim the capital plan to a more achievable level to reduce the funding gap and transparently present what will happen in the next five years.
If the plan is not trimmed, the MTA should transparently schedule essential rebuild and improve projects before expansion projects.
The MTA must reduce fare evasion to help stabilize the operating budget and provide the capacity to finance debt.
Labor must be a partner to increase productivity, which is essential to stabilize the operating budget and provide the capacity to finance debt.
The State should unpause congestion pricing to help fill the gaping financing hole.
Key Data
$8.6 billion
— in proposed and previously planned expansion projects that divert resources from essential rebuilding and improvement efforts.
$10 billion
— in new MTA bonds that are not affordable under the current plan.
$1 billion
— the amount by which the MTA’s structural budget gap will exceed by the end of the decade.
15 percent
— of an operating budget that is not fully funded, which does not make debt affordable.
The Metropolitan Transportation Authority must prioritize essential infrastructure repairs and right-size its capital program to match available funding, while avoiding reliance on unsustainable debt. To stabilize its budget and support these capital investments, the agency should increase productivity and reduce fare evasion to generate at least $1.5 billion in annual savings.
Recommendations related to Efficiency Savings
The MTA should increase productivity and reduce fare evasion to provide at least $1.5 billion in needed operating budget savings.
The MTA needs to deliver capital projects more efficiently at the lowest cost to stabilize its budget and provide resources for capital investment.
The MTA should collaborate with labor to increase efficiency, which could save up to $2 billion annually.
Key Data
$1.5 billion
— Needed operating budget savings from increased productivity and reduced fare evasion.
$700 million
— Annual amount of fare evasion.
$2 billion
— Potential annual savings from increasing efficiency with labor collaboration.
New York State should sign legislation requiring the publication of details for contracts currently exempt from Comptroller oversight to prevent wasteful spending and corruption. Reducing the prevalence of these exemptions, which currently allow billions of dollars to bypass competitive procurement rules, is essential for fiscal responsibility.
Recommendations related to Efficiency Savings
The Governor should sign A10281/S9171 to require State agencies and authorities to publish information related to contracts that are exempt from prior approval by the Office of the State Comptroller.
The Governor should no longer include exemptions to sections 112 and 163 in executive budget bills to prevent wasteful spending.
The Governor should reject any exemptions proposed by the Legislature to ensure contracts are subject to competitive procurement rules.
State officials should reduce the number, amount, or scope of emergency and exempted contracts to improve financial management.
Key Data
5.3 days
— Average time for the Office of the State Comptroller to complete prompt review of contracts.
$50,000
— Minimum value floor for contracts subject to oversight provisions.
$368 million
— Total value of enacted budget appropriations exempt from section 112 of the State Finance Law.
$1.5 billion
— Total value of enacted budget appropriations exempt from section 163 of the State Finance Law.
The New York City adopted budget for fiscal year 2025 increases city-funded spending by $6.1 billion, yet fails to identify offsetting savings for new programs or fully fund recurring costs like overtime. This approach relies on using prior-year funds to balance obligations, leaving the city without necessary reserves to protect against potential economic downturns.
Recommendations related to Efficiency Savings
Adopt a transparent, accurate budget that fully funds planned services and identifies those that will shrink.
Ensure that spending added during budget adoption is offset by savings elsewhere.
Deposit at least $1 billion into the Rainy Day Fund over this and next year.
Key Data
$1.3 billion
— The amount by which the All Funds adopted budget is larger than the Mayor’s Executive proposal.
$6.1 billion
— The increase in City-funded spending in the fiscal year 2025 adopted budget over fiscal year 2024.
$17.8 billion
— The total growth in City-funded spending from fiscal year 2020 to fiscal year 2025.
$1.1 billion
— The amount by which fiscal year 2024 spending obligations exceeded that year’s revenues.
The fiscal year 2025 budget agreement fails to adequately prioritize long-term fiscal stability by neglecting to save for a rainy day despite strong revenues. Furthermore, the budget relies on potentially inaccurate estimates that may leave critical areas like overtime, class size reduction, and housing vouchers underfunded.
Recommendations related to Efficiency Savings
City leaders should use stronger revenues to prioritize programs, make government more efficient, shrink lower impact activities, and save for a rainy day.
All programs should be budgeted at expected service levels and costs.
The Administration and City Council should join forces to become much more transparent and accurate in their budgeting to avoid future shortfalls.
The fiscal year 2025 budget requires greater transparency and accuracy to avoid artificial gaps caused by underbudgeting, particularly regarding expenses like overtime. To maintain fiscal sustainability, any new spending must be offset by recurring savings from efficiencies or the reduction of underutilized programs, while simultaneously bolstering the Rainy Day Fund, which currently holds less than $2 billion despite an average recession costing $11 billion over two years.
Recommendations related to Efficiency Savings
To ensure added spending is sustainable, it should be budgeted on a recurring basis and offset with recurring reductions from efficiencies or shrinking of lower impact or underutilized programs.
If the City chooses not to fully fund a program, it should be clear that it will be trimmed or cut.
New York City faces budget shortfalls of $2.2 billion in fiscal year 2025 and up to $2.8 billion in the outyears, necessitating a more transparent budget that offsets new spending with recurring efficiency savings. To improve fiscal health, the City should implement mandatory Rainy Day Fund deposits and identify programs for reduction or elimination to ensure long-term sustainability.
Recommendations related to Efficiency Savings
City leaders should adopt a transparent, accurate budget that fully funds planned services and identifies those that will shrink.
To ensure new spending is sustainable, it should be budgeted on a recurring basis and offset with recurring spending reductions from efficiencies or the reduction or elimination of lower impact or underutilized programs.
The City should deposit at least $500 million in the Rainy Day Fund in fiscal year 2024 and budget to deposit at least $553 million in fiscal year 2025.
The City should enact mandatory deposit rules to ensure the Rainy Day Fund is built up over time.
The City should build its reserves to $12.7 billion, which would cover two years of recessionary tax revenue losses and permit spending to grow 2 percent a year.
Key Data
$65 million
— Shortfall for Early Intervention services in fiscal year 2025.
$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 to $2.8 billion
— Budget shortfall range for the outyears.
$4 billion
— Additional fiscal year 2024 resources identified since budget adoption to roll into fiscal year 2025.
$12.7 billion
— Target reserve size for the Rainy Day Fund to cover two years of recessionary tax revenue losses.
New York City's fiscal stability is threatened by understated spending projections and revenue estimates that may be too conservative, leading to potential budget gaps exceeding $8.0 billion annually. To address these challenges, the City should prioritize essential programs, implement productivity-focused savings plans, and ensure accurate budget reporting to avoid future service cuts.
Recommendations related to Efficiency Savings
Implement additional savings plans, focused on increasing productivity and shrinking lower impact and priority programs.
Reduce future budget gaps by prioritizing programs that are highly needed and proven to work.
Allocate funded vacancies to where they are most needed to provide critical services.
Put extra funds available now into the Rainy Day Fund and commit to saving it for a recession or severe, one-time emergency.
Allow agencies to hire into funded positions and spend their budgets on needed programs.
Key Data
$8.0 billion
— Estimate of future annual budget gaps.
$17.4 billion
— Potential budget gap by fiscal year 2028 if risks come to bear.
$3.0 billion
— Amount of underbudgeting in the Fiscal Year 2025 Preliminary Budget according to the City Council.
$4.9 billion
— Potential cost of City FHEPS expansion in fiscal year 2028.
New York City and State governments face significant fiscal challenges driven by years of spending growth that outpaced revenue, resulting in structural budget gaps and a reliance on temporary funding sources. To avoid a looming fiscal reckoning, leaders must prioritize spending restraint, align recurring expenditures with revenues, and implement efficiency measures like work rule changes and process streamlining.
Recommendations related to Efficiency Savings
Leaders, managers, and front-line workers should work together to improve productivity by ensuring uniformed employees are deployed effectively and not filling jobs that could be done by civilian employees.
The City should pursue work rule changes and job-title flexibility to realize real savings potential.
The City should streamline housing repairs so that one employee can complete certain fixes rather than needing to schedule multiple staff, such as a plumber, a plasterer, and a painter.
Government leaders should increase efficiency by leveraging technology and streamlining processes to identify and implement the best ways to improve productivity.
The City and State should prioritize programs that produce the most significant effects while shrinking or eliminating those that are ineffective or deliver less benefit.
Key Data
$33 billion
— Increase in State Operating Funds spending between fiscal years 2020 and 2025.
$15 billion
— The structural gap in the State budget when accounting for non-recurring revenue.
$11.5 billion
— The increase in City-funded spending between FY 2020 and FY 2025.
40%
— The growth in Medicaid spending over the last three years.
The November 2023 Program to Eliminate the Gap (PEG) includes 16.7 percent in efficiency savings, which reduce costs while maintaining service levels. Agencies should continue to use data-driven approaches to identify and streamline ineffective programs to further reduce costs without compromising critical services.
Recommendations related to Efficiency Savings
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.
Agencies should continue to identify efficiency savings that do not affect critical program services.
Returning to standardized procurement practices wherever possible should increase competition and drive down the cost of providing services.
Efforts to identify efficiencies should be continued and strengthened.
Key Data
16.7%
— The share of cumulative savings in the November 2023 PEG attributed to increasing efficiency.
$360 million
— The amount of annually recurring efficiency savings identified by agencies in the November 2023 PEG.
$85.9 million
— Savings in the current year from reducing Department of Education administrative staff per diem and per session costs.
$120 million
— Annual savings beginning in fiscal year 2025 from reducing Early Childhood spending while maintaining current seat levels.
$96.3 million
— Annual savings beginning in fiscal year 2025 from reducing Department of Education administrative staff per diem and per session costs.
New York City faces a $10.6 billion budget gap, necessitating a strategic shift away from service expansion toward prioritizing critical services and increasing operational efficiency. To address this shortfall without raising taxes or depleting reserves, the City must leverage transparent data on program impact and collaborate with labor to implement necessary structural changes.
Recommendations related to Efficiency Savings
Now is not the time to focus on expanding services but rather to prioritize those services with significant impact and to increase efficiency.
The Council should focus on the data to help make the hard choices and minimize the impact on New Yorkers.
The City will not identify and be able to deliver services efficiently without the input of labor and without agreed-upon changes to work rules, job titles, health insurance, and other benefit administration structures.
Making wise, hard choices requires transparent data on program impact and a relentless effort to manage programs well.
The focus should be on identifying the most critical priorities and services and delivering them well.
Key Data
$16 billion
— Added costs through 2027 from recent collective bargaining agreements that did not include offsetting productivity increases.
$7.1 billion
— Budget gap for fiscal year 2025 shown in the City's financial plan.
$10.6 billion
— More accurate budget gap when including impacts of fiscal cliffs and regularly underbudgeted areas.
92 percent
— Portion of previous savings programs that did not directly affect program services.
20 percent
— Portion of the most recent savings program (PEG) that will affect current programs.
The Metropolitan Transportation Authority faces significant risks in achieving its targeted operational efficiency savings, with a shortfall of $193 million projected for 2024 that grows to $348 million by 2027. To address these gaps and ensure fiscal stability, the agency must implement identified efficiencies, increase productivity, and potentially pursue work rule changes with labor partners.
Recommendations related to Efficiency Savings
The MTA must implement efficiencies to meet its savings targets to close projected budget gaps.
The MTA should continue to identify ways to increase productivity and reduce costs to ensure long-term fiscal health.
The MTA should work with labor partners to implement work rule changes to capture up to $2.9 billion in potential operational savings.
The MTA and stakeholders should closely monitor the implementation and fiscal impact of operational efficiency savings to ensure planned targets are met.
Key Data
$528 million
— Targeted operational efficiency savings for 2027.
$181 million
— Identified operational efficiency savings for 2027.
$348 million
— Risk from unidentified operational efficiency savings in 2027.
$2.9 billion
— Potential operational savings identified from benchmarking productivity to other transit systems.
$400 million
— Targeted operational efficiency savings for 2024.
$193 million
— Risk from unidentified operational efficiency savings in 2024.
New York City faces a widening fiscal gap projected to reach $10.6 billion in fiscal year 2025, driven by rising costs for asylum seekers and pre-existing budget imbalances. To address this, the city must conduct a comprehensive review of program efficiency and collaborate with labor unions to implement structural changes that reduce costs while preserving critical services.
Recommendations related to Efficiency Savings
The City needs a citywide look at program impact and efficiency to identify all opportunities to reduce costs without cutting critical services.
Consolidating welfare benefit funds could save $150 million without cutting actual benefits.
Services will be best preserved if the City works 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.
Key Data
$10.6 billion
— The total projected fiscal year 2025 budget gap, including the fiscal cliff and program underbudgeting.
$150 million
— Potential savings from consolidating welfare benefit funds without reducing 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 currently funded by City coffers.
$7.1 billion
— The revised fiscal year 2025 budget gap estimate.
$2.4 billion
— The cost of the fiscal cliff excluded from the initial gap estimate.
New York City faces a significant fiscal cliff with projected budget gaps reaching up to $13.8 billion, driven by increased spending that has outpaced recurring revenue. To address this, the city must prioritize impactful programs, consolidate duplicative efforts, and implement rigorous performance management to achieve necessary efficiency savings.
Recommendations related to Efficiency Savings
To stabilize the budget, the city should prioritize the most impactful programs, end temporary initiatives, and consolidate duplicative efforts.
The city must improve its data on program efficiency and effectiveness while implementing a performance management and accountability process.
Agencies should deliver services more efficiently by collaborating with labor to change processes, enhance skills, and utilize technology.
The city should examine its use of space and vehicles and identify savings through centralized procurement.
Strong consideration should be given to reviving the Program to Eliminate the Gap (PEG) monitoring function to ensure transparency in savings efforts.
Key Data
$9.9 billion
— Projected budget gap for next year, assuming higher tax revenues and lower migrant costs.
$13.8 billion
— Potential upper estimate for the 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 sources.
$2.5 billion
— Amount of programs funded by temporary federal Covid aid and tax revenue surges.
15%
— Total savings target across three rounds of agency budget cuts.
The Metropolitan Transportation Authority aims to achieve $400 million in operational savings by 2024, with that target increasing to $500 million by 2025. While these goals are established, there is potential for even greater efficiency savings if the agency can successfully implement necessary cost-cutting measures.
Key Data
$400 million
— The amount of operational savings the MTA assumes it will achieve by 2024.
$500 million
— The amount of operational savings the MTA assumes it will achieve by 2025.
New York City's 'Programs to Eliminate the Gap' (PEG) have largely failed to reduce actual programmatic spending, with 90 percent of savings coming from non-service areas like debt service and revenue generation. Furthermore, new annual spending in fiscal years 2024 through 2026 significantly outpaces these recurring savings by approximately $5 billion to $6 billion per year.
Key Data
$2.6 billion
— Cumulative recurring savings achieved through the Administration's savings plans.
10 percent
— Portion of the $2.6 billion in recurring annual savings that may directly affect program services.
$345 million
— Savings generated from reducing the Department of Education fringe growth rate from 11.6 percent to 10.9 percent.
$5.0 billion to $6.0 billion
— Annual amount by which new spending in fiscal years 2024 to 2026 exceeds recurring PEG savings.
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 Metropolitan Transportation Authority faces a long-term structural budget gap that threatens its financial stability, necessitating immediate operational reforms to reduce costs and align spending with revenue. By implementing efficiency measures like one-person train operations and adjusting work rules, the transit system can better manage its budget and avoid relying on future extraordinary subsidies or fare increases.
Recommendations related to Efficiency Savings
The MTA should implement one-person train operation (OPTO) on subways and proof of payment on commuter rail, as these are industry standard practices that would increase efficiency.
The MTA should reduce the cost of commuter rail services by verifying fare payment at turnstiles or with proof of payment systems.
The MTA should reduce maintenance and operating costs by targeting peer benchmark levels.
The MTA should negotiate work rule changes with labor unions to allow the MTA to adjust schedules and services to meet shifting rider needs.
The MTA should bring its spending in line with its recurring revenues to avoid returning to taxpayers and riders for a new infusion of extraordinary resources.
Key Data
$442 million
— Annual savings from expanding one-person train operation (OPTO) systemwide.
$300 million
— Annual savings from verifying fare payment at turnstiles or with proof of payment systems on commuter rail.
$1.6 billion
— Potential annual savings from meeting benchmark maintenance and operations levels.
$400 million
— The MTA's current target for annual operational savings.
$2.6 billion
— The MTA's budget gap for 2023.
$900 million
— The projected budget gap the MTA will face in 2029.
The fiscal year 2024 budget agreement utilizes $2.3 billion in available resources to increase spending without implementing the necessary offsetting savings to ensure long-term sustainability. To avoid future fiscal crises, the City must prioritize programs, reduce spending on lower-impact initiatives, and restructure operations to improve productivity.
Recommendations related to Efficiency Savings
The City should prioritize programs, reduce spending on those with lower impact, and restructure operations to increase productivity.
The Administration, City Council, and the municipal unions should collaborate to ensure the City can deliver to New Yorkers what they need at a cost the City can afford.
The City should not wait until it slams into a fiscal wall to spend within its means.
Key Data
$2.3 billion
— Amount of available resources used in the fiscal year 2024 budget to add spending without offsetting savings.
New York City faces growing budget gaps projected to reach $10.7 billion by fiscal year 2027, necessitating a budget that offsets new spending with savings and avoids funding recurring programs with one-time resources. To ensure long-term stability, the City must prioritize critical services and deliver them more efficiently while building reserves in the Rainy Day Fund.
Recommendations related to Efficiency Savings
The City should adopt a budget that narrows future budget gaps.
The City should reduce future fiscal cliffs by including spending for ongoing programs in the outyears.
The City should offset all added spending for recurring activities with savings elsewhere in each year of the financial plan.
The City should include realistic annual spending estimates for all functions, including uniformed overtime and special education.
The City should deposit at least half of any additional fiscal year 2023 resources into the Rainy Day Fund.
Key Data
$7.5 billion
— Projected budget gap in fiscal year 2025.
$10.7 billion
— Projected budget gap in fiscal year 2027.
$400 million
— Cost to maintain the current FHEPS rental voucher program.
New York City's recent savings initiatives, while avoiding service cuts, fail to sufficiently address widening budget gaps that are projected to reach $11 billion by fiscal year 2027. To balance the budget without harming critical services, the city must prioritize restructuring operations and implementing genuine efficiency measures rather than relying on vacancy reductions and accounting adjustments.
Recommendations related to Efficiency Savings
The City should implement additional PEGs that focus on improving efficiency—reducing costs without reducing services.
Future actions should focus much more on prioritizing impactful programs and restructuring operations to preserve services.
The City should shift vacancies to where they are most needed and take steps to aggressively reform how it hires, especially for critical functions.
The City has sufficient vacancies and should not be adding new positions.
Key Data
$4.1 billion
— Cumulative recurring savings from the four savings plans.
$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.
1,274
— Number of new full-time positions added in the fiscal year 2024 Executive Budget.
$180 million
— Recurring annual revenue generated from revenue-raising initiatives.
New York City faces widening budget gaps reaching $10.0 billion by fiscal year 2027, despite an agency program to eliminate the gap that saves $900 million annually. To ensure fiscal stability, the city must prioritize essential programs, improve operational efficiency, and shift existing vacancies rather than adding new positions.
Recommendations related to Efficiency Savings
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.
Key Data
$900 million
— Annual savings generated by the agency Program to Eliminate the Gap (PEG).
82 percent
— Portion of the PEG savings that is offset by new spending.
23,000
— Number of existing vacancies in the City.
$4.2 billion
— Budget gap projected for fiscal year 2025.
$7.0 billion
— Budget gap projected for fiscal year 2027.
$10.0 billion
— Future shortfall projected by fiscal year 2027 when accounting for underbudgeted programs and fiscal cliffs.
New York City faces significant budget gaps, projected to reach $9.7 billion in fiscal year 2025 and $14.5 billion in fiscal year 2027, necessitating a focus on efficiency rather than austerity. By restructuring operations, streamlining bureaucracy, and leveraging technology, the city can achieve necessary savings, such as the $150 million available through consolidating welfare-benefit funds and $100 million from increasing sanitation productivity.
Recommendations related to Efficiency Savings
The city must thoughtfully rein in its spending by restructuring and prioritizing high impact services, not by slashing programs or pruning low hanging fruit.
Consolidating welfare-benefit funds would save $150 million from efficiency and purchasing power.
The city should reduce costs of centralized services, such as space for fewer employees.
Most savings should come from reorganizing operations, streamlining bureaucracy, and leveraging technology.
Increasing sanitation productivity could save $100 million annually.
Key Data
$9.7 billion
— Projected budget gap in fiscal year 2025.
$14.5 billion
— Projected budget gap in fiscal year 2027.
$150 million
— Potential savings from consolidating welfare-benefit funds.
$100 million
— Potential annual savings from increasing sanitation productivity.
5.5%
— Projected increase in city-funded spending next year.
4.8%
— Projected annual spending growth over the next three years.
The Adams Administration's savings plans, including two Programs to Eliminate the Gap and a Vacancy Reduction Plan, reduce ongoing budgeted spending by approximately $3.0 billion annually. While these measures eliminated 11,386 vacant full-time positions, 92 percent of the recurring savings are projected to have no impact on services, as they primarily involve re-estimating costs and eliminating vacancies rather than cutting programs.
Key Data
$3.0 billion
— annual reduction in ongoing budgeted spending from the three savings plans.
92 percent
— of the plans' recurring impact that should not affect services expected to be delivered.
11,386
— vacant full-time positions eliminated by the savings plans.
23,000
— vacant full-time positions remaining in the City.
0.3 percent
— of the total budget represented by reductions that potentially affect programs.
New York City faces significant fiscal challenges, with budget gaps projected to reach $6.5 billion by fiscal year 2027 and potentially exceeding $14.0 billion when accounting for additional pressures. To address these shortfalls, the City should leverage its 23,000 existing vacancies and prioritize operational efficiency, such as flexible work rules, rather than resorting to layoffs or service cuts.
Recommendations related to Efficiency Savings
The City should avoid layoffs and minimize service impacts when implementing savings programs.
Agencies should utilize the 23,000 existing citywide vacancies to meet savings targets while still hiring for critical positions.
The City should prioritize improving operational efficiency as the primary method for preserving services.
The City should make work rules and job titles more flexible to increase operating efficiency and reduce ongoing costs.
Key Data
$6.5 billion
— Projected budget gaps by fiscal year 2027, excluding unbudgeted labor costs, asylum seeker costs, and other fiscal pressures.
$8.8 billion
— Estimated funding needed by the City for the current and upcoming fiscal year.
$14.0 billion
— Projected future budget gaps by fiscal year 2027.
4 percent
— The size of the Program to Eliminate the Gap (PEG) directive.
23,000
— Number of citywide vacancies available to help agencies meet savings targets without layoffs.
New York State's proposed fiscal year 2024 budget includes $14.8 billion in discretionary lump sum appropriations, which lack transparency and are often allocated based on political considerations rather than public benefit. These funds should be eliminated or strictly regulated to ensure taxpayer money is spent efficiently, transparently, and subject to competitive procurement oversight.
Recommendations related to Efficiency Savings
The State should not enact any new lump sum appropriations that authorize spending on a broad range of projects or purposes to be determined and allocated at a later date.
The State should omit the $6 billion Special Public Health Emergency Appropriation from the budget.
The State should reduce the Special Emergency Appropriation to $1 billion and ensure it is subject to OSC oversight and competitive procurement rules.
The Executive should fully and completely disclose distributions from all lump sum pots currently being spent.
The Governor and Legislature should pass a law codifying the Governor’s discretionary lump sum database to include improved requirements for disclosure.
The Governor and Legislature should provide full data for lump sum spending dating back to at least 2020.
Key Data
$14.8 billion
— Total proposed State FY 2024 discretionary lump sum spending authority.
$8 billion
— Amount of lump sums for the COVID emergency included in the total.
$6.8 billion
— Total amount of non-emergency lump sums in the budget.
$3.1 billion
— Amount of lump sum funding the Executive alone has discretion to allocate.
$943 million
— Total amount of new appropriations that are lump sums.
$5.8 billion
— Total amount of reappropriations that are lump sums.
New York City's Department of Education faces a projected budget gap of $12.0 billion by fiscal year 2026, exacerbated by consistent underbudgeting of $500 million for special education tuition and the expiration of federal pandemic aid. To address these fiscal realities amidst a loss of 141,000 students since 2015, the City must evaluate program impacts and align spending with per-student costs rather than aggregate levels.
Recommendations related to Efficiency Savings
Consider spending levels per student rather than aggregate level and recognize that declining enrollment could yield flat or reduced total spending.
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.
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, which could be even larger if there is a recession.
$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.
141,000
— The number of students lost by K-12 DOE schools between school years 2015-16 and 2021-22.
$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.
To address the Metropolitan Transportation Authority's financial crisis, productivity improvements and operational reforms should constitute at least half of the gap-closing plan. Implementing standard transit practices, such as one-person-train-operation and proof of payment fare collection, could unlock up to $2.9 billion in annual savings.
Recommendations related to Efficiency Savings
Productivity improvements, including changes in MTA operations that require agreement from labor, should be at least half of the plan to address the Metropolitan Transportation Authority's financial crisis.
The Metropolitan Transportation Authority should implement operational reforms, including adopting standard practices of other systems like one-person-train-operation for subways and proof of payment fare collection on commuter rail, to unlock significant savings.
The Metropolitan Transportation Authority should pursue changes in labor agreements to unlock productivity savings while maintaining the ability to provide quality service.
Key Data
$100 million
— The Metropolitan Transportation Authority's initial planned annual operational efficiencies before being increased.
roughly $400 million
— The Metropolitan Transportation Authority's updated target for annual operational efficiencies.
$2.9 billion
— The potential annual savings from implementing operational reforms, including adopting standard practices of other transit systems.
The tentative contract agreement with District Council 37 will cost approximately $16.2 billion more than currently budgeted over the contract period, widening city budget gaps to $10.6 billion by fiscal year 2027. To offset these significant costs, the city must implement a multiyear Program to Eliminate the Gap and identify changes in work rules and job titles that increase operational efficiency.
Recommendations related to Efficiency Savings
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 identify productivity savings to offset these multi-billion-dollar collective bargaining costs.
Key Data
$16.2 billion
— The estimated cost of the tentative contract agreement raises 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 resulting from the additional spending.
$6.5 billion
— The city's budget gap in fiscal year 2027 prior to the additional contract costs.
$3.2 billion
— The city's budget gap in fiscal year 2025 prior to the additional contract costs.
The Fiscal Year 2024 Preliminary Budget requires aggressive action to stabilize future finances, including initiating a productivity program to restructure services for better quality and cost-effectiveness. To prepare for looming fiscal cliffs and potential recession, the City must prioritize critical services, restrain spending growth, and implement structural changes to reduce costs over time.
Recommendations related to Efficiency Savings
The Administration should initiate a productivity PEG (program to eliminate the gap) that tasks agencies with restructuring programs to improve the quality and cost-effectiveness of City services.
The City should replicate the effort to increase the speed of land use reviews and remove administrative barriers to development across all City agencies and programs.
The City must prioritize critical services, manage them relentlessly, save for a rainy day, and protect from massive future cuts by restraining spending growth.
Key Data
4,300
— Number of vacant positions eliminated in the Fiscal Year 2024 Preliminary Budget.
$181 million
— Estimated savings from eliminating 4,300 vacant positions in the current fiscal year.
$350 million
— Estimated savings from eliminating 4,300 vacant positions in the next fiscal year.
$1.1 billion
— Amount of the fiscal cliff that the Administration's planning for its Executive Budget should address.
$1.0 billion
— Amount that should be deposited into the Rainy Day Fund to better prepare for uncertainty.
New York City's long-term fiscal outlook remains precarious, with efficiency savings amounting to less than $100 million annually in the Program to Eliminate the Gap. To ensure future stability and preserve essential services, the city must prioritize restructuring operations and eliminating unnecessary vacant positions rather than relying on re-estimates and illusory savings.
Recommendations related to Efficiency Savings
It is critical that the City start taking action immediately to restrain spending over the long run to reduce the future gaps.
The City can and should both hire for critical functions and eliminate many more, ultimately unneeded, positions.
The City and agencies should have flexibility to shift vacant positions across and within agencies to units and titles that have critical staffing needs.
The best way to preserve services for New Yorkers when they need them most is to improve the quality and efficiency of the City’s operations today.
More transformative changes are needed to ensure future stability.
Key Data
$100 million
— Efficiency savings were less than this amount in each year of the Program to Eliminate the Gap.
2,000
— Number of vacancies reduced annually in fiscal years 2024 and 2025 by the November Plan.
24,000
— Number of vacant full-time positions remaining after the November Plan's reductions.
5,000
— Total number of positions expected to be eliminated by the Office of Management and Budget.
$350 million
— Annual savings expected from the elimination of roughly 5,000 vacant civilian positions.
$376 million
— Value of illusory savings annually in fiscal years 2025 and 2026.
The Metropolitan Transportation Authority faces a significant structural deficit and should prioritize implementing efficiency-focused operating reforms to improve fiscal stability. By adopting a multi-year plan that begins with management-led efficiencies and transitions to collectively bargained changes, the agency could potentially realize up to $2.9 billion in recurring annual savings.
Recommendations related to Efficiency Savings
The MTA should seize the opportunity and runway created by federal aid to implement efficiency-focused operating reforms and—to the extent possible—restructure its long-term debt, which would reduce its structural deficit before the region’s critical transit system risks falling off the fiscal cliff.
The MTA should implement a multi-year phase-in plan starting with efficiencies under the purview of management, followed by implementing changes collectively bargained with labor over time.
Key Data
$100 million
— The amount of annual savings the MTA expects its "Fiscal Baseline Reset" to generate.
$2.9 billion
— The amount of recurring annual savings that could cover much of the MTA's structural deficit.
4 percent
— The portion of the structural deficit that the MTA's "Fiscal Baseline Reset" savings are expected to cover.
The Metropolitan Transportation Authority faces a structural operating budget deficit of at least $2.5 billion annually, necessitating significant efficiency reforms and operational changes to avoid service degradation. By adopting industry-standard operating strategies and renegotiating labor contracts, the transit system can narrow its fiscal gap while maintaining essential services for the region.
Recommendations related to Efficiency Savings
The MTA should increase efficiency as a significant portion of its gap-closing actions.
The MTA's leadership and labor unions should work together to identify and phase in efficiency reforms to narrow the structural gap.
The MTA should adopt operating strategies common to other public transit systems and align costs with industry benchmarks to realize potential savings.
The MTA should prioritize the state of good repair before expansion projects to ensure the system functions reliably.
The MTA should start the efficiency push as soon as possible with changes achievable by leadership alone.
Key Data
$2.5 billion
— The amount by which the MTA's recurring annual expenses exceed its revenues.
$750 million
— The approximate prepandemic structural deficit of the MTA.
$100 million
— The size of the MTA's current efficiency plan.
4%
— The portion of the MTA's budget gap that the current efficiency plan would close.
44%
— The amount by which the productivity of New York City Transit subway facility maintenance work is lower than the national median.
$35 billion
— The amount of capital investment the MTA needs in the next few years to maintain a state of good repair.
New York City agencies were instructed to identify efficiency savings of 3 percent in fiscal year 2023, with targets increasing to 4.75 percent annually starting in fiscal year 2024. These initiatives aim to achieve $1 billion in savings for fiscal year 2023 and $1.6 billion annually beginning in fiscal year 2024 to help address projected budget gaps.
Key Data
3 percent
— Efficiency savings target for City agencies in fiscal year 2023.
4.75 percent
— Annual efficiency savings target for City agencies in fiscal year 2024 and beyond.
$1 billion
— Expected savings for City agencies in fiscal year 2023.
$1.6 billion
— Expected annual savings for City agencies starting in fiscal year 2024.
New York City's plan to cut 3% of agency budgets this year and 4.75% next year is a necessary and achievable step to address projected budget gaps that could reach $10 billion. By focusing on managerial efficiency, streamlining operations, and strategically managing vacancies, the city can stabilize its finances without compromising critical services.
Recommendations related to Efficiency Savings
The city should focus on increasing efficiency and reducing underutilized services to preserve and enhance critical needs.
The city should reorganize operations, streamline bureaucratic approvals, leverage technology, and fundamentally change ways of doing business to boost productivity.
The city needs to restrain spending and better manage vacancies and hiring to ensure sufficient capacity exists to hire strategically.
The city should modernize contracts during union negotiations to reduce recurring costs, fund workers’ raises, and narrow budget gaps.
The city should eliminate many thousands of unneeded vacant positions while simultaneously hiring in critical areas.
Key Data
3%
— The savings target for city-funded agency budgets this year.
4.75%
— The savings target for city-funded agency budgets next year.
$10 billion
— The projected budget gap in the near future, which is more than twice what the city anticipates.
12%
— The rise in private-sector productivity over the past decade.
New York City's recycling system suffers from low collection productivity and high costs, with recycling collection costing 80 percent more per ton than refuse collection. Implementing volume-based waste fees, optimizing collection routes, and pursuing alternatives to curbside organic collection could improve efficiency and generate significant fiscal savings.
Recommendations related to Efficiency Savings
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 through alternatives like increasing drop-off sites, encouraging 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 to improve collection productivity.
Key Data
$615 per ton
— Recycling collection cost in fiscal year 2021.
$342 per ton
— Refuse collection cost in fiscal year 2021.
$203 per ton
— Refuse disposal cost in fiscal year 2021.
$53 per ton
— Recycling processing cost in fiscal year 2021.
149,000 tons
— Amount of organics that could be diverted per year by incentivizing in-sink disposal units.
$1,700 per ton
— Possible cost of the curbside organic program.
New York City's implementation of a Program to Eliminate the Gap (PEG) is a necessary step to stabilize the budget by focusing on increasing productivity and reducing recurring costs. By restructuring operations and modifying labor contract work rules, the city can achieve these savings while maintaining essential services and managing future fiscal pressures.
Recommendations related to Efficiency Savings
The City should change work rules and other contractual components to increase efficiency and provide PEG savings as the best way to raise employee salaries without creating an unsustainable fiscal burden.
The City should utilize its current 28,000 vacancies to hire critical service-providing positions while still meeting the PEG target.
Key Data
3 percent
— The directive for agencies to identify savings in the current year.
4.75 percent
— The directive for agencies to identify savings in future years.
28,000
— The number of current vacancies in the City, which allows for hiring critical service-providing positions while meeting PEG targets.
3 percent to 5 percent
— The range of PEG savings previously called for in June.
The City should improve operational efficiency by reallocating existing vacant positions to priority areas rather than increasing the authorized headcount or budget. Streamlining hiring processes, modernizing civil service systems, and improving retention are essential to maintaining a high-quality, effective municipal workforce.
Recommendations related to Efficiency Savings
The City should move available positions to where they are needed and increase the flexibility of processes used to control, allocate, and reallocate headcount.
The City should improve and speed up the processes and procedures it uses to control and manage hiring and to administer the civil service system.
The City should institute policies to increase retention of high-performing employees.
The City should modernize civil service and job paths to increase the attractiveness of public sector employment.
The City should report transparently on vacancies, hires, separations, and promotions.
Key Data
326,739
— Pre-pandemic high of full-time and full-time equivalents (FTEs).
304,641
— Full-time and full-time equivalent staff on board as of April 2022.
21,551
— Decline in the total number of on-board full-time and full-time equivalents from March 2020 to April 2022.
333,129
— Authorized headcount for fiscal year 2023.
28,500
— Vacant positions as of April 2022.
246 days
— Median time between exam administration and results in the first four months of fiscal year 2022.
The fiscal year 2023 budget agreement increases spending by $1.15 billion without implementing necessary efficiency measures or vacancy eliminations to offset costs. To achieve fiscal sustainability, the administration must require agencies to identify recurring efficiency savings of 3 percent to 5 percent.
Recommendations related to Efficiency Savings
The Administration should be requiring agencies to find recurring efficiency savings of 3 percent to 5 percent to be included in the November 2022 financial plan.
Restructuring operations and focusing on priorities will be essential to bring spending levels back down to fiscally sustainable levels.
Key Data
$300 million
— The amount of additional savings identified in the Adopted Budget, which likely comes from re-estimates and debt service savings rather than efficiency efforts.
3 percent to 5 percent
— The range of recurring efficiency savings the Administration should require agencies to find to bring spending levels back down to fiscally sustainable levels.
$1.15 billion
— The amount by which the budget deal increases spending over the Executive Budget, highlighting the need for offsetting savings.
$4 billion
— The average annual budget gap that necessitates a focus on restructuring operations and securing efficiency savings.
New York City faces potential revenue shortfalls of $13 billion to $19 billion during future recessions, necessitating a strategic increase in the Rainy Day Fund to ensure long-term fiscal stability. Prioritizing core services and identifying operational efficiencies, alongside prudent allocation of current revenue surpluses, will help mitigate fiscal cliffs and protect essential public services.
Recommendations related to Efficiency Savings
Deposit half of the newly identified resources, $2.3 billion, into the Rainy Day Fund to improve the City's ability to weather the next economic storm.
Add $1.7 billion to the labor reserve over the financial plan to fully restore the reduction made during the pandemic.
Use the remaining resources for non-recurring actions such as pay-as-you-go capital programs or the Retiree Health Benefit Trust.
Shift between $250 million and $500 million annually from the general and capital stabilization reserves to the Rainy Day Fund.
Commit to setting rules to govern the Rainy Day Fund in Local Law by enacting legislation that sets a target size and mandates deposits.
Prioritize core services and identify efficiencies in operations that can improve the quality of services and reduce ongoing costs.
Key Data
$13 billion to $19 billion
— Potential revenue shortfall the City could face over three years in the next recession.
$4.5 billion
— Additional revenue available in fiscal years 2022 and 2023 than was projected in the Executive Budget.
$12 billion
— Recommended total balance for the Rainy Day Fund.
5.8 percent
— Proposed increase in City-funded spending in the Fiscal Year 2023 Executive Budget.
$1.7 billion
— Amount recommended to be added to the labor reserve over the financial plan.
$2.3 billion
— Recommended deposit into the Rainy Day Fund from newly identified resources.
The New York City Housing Authority's federal monitorship has led to some operational improvements but has also incurred significant, unbudgeted costs that threaten long-term fiscal sustainability. To improve efficiency and reduce the financial burden, federal and local oversight must prioritize regulatory relief, labor rule reforms, and transparent performance reporting.
Recommendations related to Efficiency Savings
HUD should grant regulatory waivers that free up funding for NYCHA, such as permission to reinvest savings from reducing energy consumption, and that improve operations, such as waivers from onerous and outdated rules that prohibit the use of design-build, construction manager-build, or best value capital procurement for federally funded capital projects.
The monitor should appeal to HUD for federal regulatory relief that improves operations or frees up funding for implementation.
The monitor should increase focus on identifying and advocating for long-overdue work rule reforms, broader job descriptions, fringe benefit savings, operational changes, and other actions that would boost productivity and bring NYCHA’s operations in line with other property managers.
The monitor should publish data on NYCHA’s progress towards meeting specific benchmarks laid out in the agreement.
The monitor should publicly report its approved budget.
Key Data
$1.2 billion
— NYCHA's spending through calendar year 2021 on agreement implementation.
$933 million
— City operating support provided from City fiscal years 2018 through 2021.
$32 million
— Fees paid to the monitor and its sub-contractors to date.
610,000
— Outstanding work orders at NYCHA as of April 2022.
310 days
— Average response time to complete repairs as of April 2022.
$359 million
— Costs related to developing and implementing 'pillar area' action plans last year.
The New York City Police Department's fiscal year 2023 budget includes significant spending increases, with overtime costs projected to reach $743 million by year-end, exceeding the current budget by $136 million. Achieving meaningful, recurring savings in these overtime expenditures requires implementing effective managerial controls and revising departmental policies and procedures.
Recommendations related to Efficiency Savings
Meaningful recurring reductions in NYPD overtime depend on effective managerial controls and changes to NYPD policies and procedures.
Key Data
$743 million
— Estimated total NYPD overtime spending for fiscal year 2022.
$136 million
— Amount by which estimated fiscal year 2022 overtime spending exceeds the modified Executive Budget.
$617 million
— NYPD overtime expenditures through April of fiscal year 2022.
$140 million
— Annual increase to the NYPD City-Funded Budget compared to the Preliminary Fiscal Year 2023 Budget.
$10.9 billion
— Total spending on the New York City Police Department in fiscal year 2023.
The Adams Administration added $2.3 billion in spending for fiscal year 2023 while identifying only $270 million and $141 million in savings for fiscal years 2022 and 2023, respectively. To avoid future service cuts or tax increases, the City must prioritize identifying 3 percent efficiency savings in the Adopted Budget.
Recommendations related to Efficiency Savings
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 must increase productivity or shrink lower priority programs to avoid massive service cuts or harmful tax increases when the next downturn arrives.
Key Data
$270 million
— Savings identified by the Adams Administration in fiscal year 2022.
$141 million
— Savings identified by the Adams Administration in fiscal year 2023.
3 percent
— Efficiency savings target the City should include in the Adopted Budget.
$2.3 billion
— Amount of additional spending added by the Adams Administration in fiscal year 2023.
New York City faces a potential $9 billion fiscal disaster by 2026 due to budget gaps, employee raises, and fiscal cliffs, necessitating a focus on fiscal discipline and service efficiency. To avoid future service cuts or tax increases, the city must prioritize programs, increase productivity, and deposit additional tax revenue into the Rainy Day Fund.
Recommendations related to Efficiency Savings
The city should reduce costs without reducing services by streamlining processes, leveraging technology and fostering cross-agency collaboration that eliminates redundancy.
The city should use this next round of collective bargaining contracts to further increase productivity, which would generate savings to fund raises and stabilize the budget.
The city must lower costs, ideally by improving efficiency or by reducing lower impact programs.
The mayor and council must resist the temptation to use additional tax revenue to expand services.
The executive budget should address the budget’s fiscal cliffs where ongoing programs are funded with nonrecurring city and federal COVID-19 funds.
Key Data
$1.5 billion
— Annual savings from a 3% Program to Eliminate the Gap for Productivity.
$1.5 billion
— Cost of 3% annual raises in the first year.
$4.3 billion
— Cost of 3% annual raises in the third year.
$900 million
— Fiscal cliffs next year where ongoing programs are funded with nonrecurring city and federal COVID-19 funds.
$500 million
— Annual deposits to the Rainy Day Fund.
Lorraine Grillo is the First Deputy Mayor of the City of New York, appointed by Mayor Eric Adams. Grillo's direct reports include Deputy Mayors for Economic and Workforce Development, Operations, Strategic Initiatives, and Human Services, as well as the Office of Management and Budget, Department of Finance, Chief Housing Officer,…
New York City's Program to Eliminate the Gap has relied heavily on re-estimates and vacancy reductions rather than true operational efficiencies, which comprised only 6.2 percent of cumulative savings. To improve fiscal stability, the City should implement a productivity program targeting 3 percent of agency spending through management reforms that streamline operations and leverage technology.
Recommendations related to Efficiency Savings
The Mayor’s Office of Management and Budget should initiate a productivity PEG to generate options to save 3 percent of City-funded agency spending, growing from $1.5 billion in fiscal year 2023 to $1.6 billion by fiscal year 2026.
City agencies should identify management reforms that reduce unit costs, streamline operations, and leverage technology.
The City should identify and implement efficiencies in centrally managed services like space leasing and fleet to provide additional savings.
To increase the City’s long-run fiscal stability, PEGs should generate recurring savings that reduce baseline spending, rather than just reductions in one or two years.
The analytic work for productivity improvements should start immediately, and the total or selected productivity improvements should be part of the Executive Budget due in late April.
Key Data
6.2 percent
— Cumulative five-year savings from the Program to Eliminate the Gap that came from increased efficiency.
61.6 percent
— Portion of total savings that came from re-estimates of planned spending and shifting support for services from City funds to other sources.
24.1 percent
— Portion of total savings that came from the elimination of vacant positions.
7,026
— Full-time positions eliminated across 42 agencies through the Program to Eliminate the Gap, resulting in approximately $290 million in annual savings.
8 of 60
— Number of participating agencies whose Program to Eliminate the Gap initiatives included any efficiency savings.
$22 million
— Savings achieved by the Campaign Finance Board in fiscal year 2022 from a $73 million budget due to overestimated costs for public matching funds.
The City's Fiscal Year 2023 budget program eliminated over 7,000 vacant positions to achieve $290 million in annual savings, yet the City retains the capacity to hire at record levels with over 18,000 remaining vacancies. Rather than creating new positions, the City should improve management systems and increase flexibility in allocating headcount to address staffing challenges and improve operational efficiency.
Recommendations related to Efficiency Savings
The City should increase the flexibility of its systems that control, allocate, and reallocate headcount to ensure agencies can staff programs sufficiently to deliver results.
The City should improve the systems it uses to control and manage hiring and to administer the civil service system.
DCAS should seek to leverage technology and other process reforms to speed up the process of administering tests and certifying civil service lists.
The City should move headcount across agencies, within agencies across units or to allocate vacancies agency-wide to improve the ability to hire priority staff.
The City should ensure adequate, timely civil service tests and lists to speed hiring and encourage more to seek City employment.
Key Data
$290 million
— Annual savings achieved by eliminating 7,026 vacant full-time positions across 42 agencies.
7,026
— Number of vacant full-time positions eliminated across 42 agencies in the Fiscal Year 2023 Preliminary Budget Program to Eliminate the Gap.
18,000
— Number of vacant full-time positions remaining after the Program to Eliminate the Gap.
7.3 percent
— Vacancy rate resulting from the reduction to 22,376 positions that could be filled in the current fiscal year.
246 days
— Median time between exam administration and results in the first four months of fiscal year 2022.
306,291
— Authorized full-time headcount for fiscal year 2022.
The New York City Housing Authority faces significant financial instability due to operating costs that are rising much faster than revenues, exacerbated by a declining rent collection rate and reliance on city subsidies. To achieve fiscal sustainability, the authority must implement structural reforms, including the Preservation Trust and labor productivity improvements, to align its operating costs with industry standards.
Recommendations related to Efficiency Savings
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.
The City and State should enact procurement reforms proposed as part of the Preservation Trust legislation to ensure that NYCHA can get more and better value for its capital dollar.
Key Data
$2.7 billion
— Public housing operating expenses in NYCHA's calendar year 2022 adopted budget.
50 percent
— Increase in operating costs per unit since 2013.
70 percent
— NYCHA's rent collection rate as of January 2022.
$132 million
— The amount the budget gap would increase if the rent collection rate continues at 70 percent in 2022.
$1.2 billion
— Operating funds spent since 2018 on various action plans mandated under the HUD settlement agreement.
38 percent
— The amount by which 2022 monthly operating costs per unit exceed the $943 per unit in rent and operating subsidy.
New York City's preliminary budget relies heavily on eliminating vacant positions and re-estimating spending rather than implementing substantive operational efficiencies, with efficiency initiatives accounting for only 9% of the Program to Eliminate the Gap savings. To achieve true fiscal stability, the administration should target 3% annual efficiency savings and pursue structural reforms in centrally managed services like space and fleet.
Recommendations related to Efficiency Savings
The Executive Budget should include another Program to Eliminate the Gap (PEG) focused on increasing agency and central service efficiency.
The Executive Budget should build on this start and include a PEG targeting 3 percent in fiscal year 2023 and each year thereafter, focused on strategies that increase efficiency and reduce unit costs.
In addition, the Executive Budget should include efficiency savings from centrally managed services like space and fleet.
The City should implement actions such as modernizing contractual differentials, work rule changes, and consolidation of welfare benefits to achieve efficiency savings.
Key Data
9%
— Efficiency initiatives as a portion of PEG savings.
$500 million
— Efficiency savings over five years.
0.25 percent
— Efficiency initiatives as a portion of City-funded spending at participating agencies.
2.3%
— Savings of City-funded spending in fiscal year 2022.
$820 million
— Dollar amount of savings in fiscal year 2022.
2.8 percent
— Savings of City-funded spending in fiscal year 2023.
The Metropolitan Transportation Authority faces an annual structural deficit of at least $2.0 billion, which is currently being covered by federal aid and borrowing. To stabilize finances and avoid future service cuts or tax increases, the agency must implement operational changes and continue planned fare increases.
Recommendations related to Efficiency Savings
The MTA should implement changes that increase the efficiency of its operations to utilize the runway provided by federal aid.
The MTA should restructure operations to help stabilize finances and stave off possible future service cuts or dramatic tax or fare increases.
The MTA should include initiatives to increase the efficiency of operations, such as facility maintenance improvements or one-person train operation.
The MTA should continue planned fare increases, which would be coupled with the City’s increased funding for Fair Fares.
Key Data
$2.0 billion
— Annual structural deficit faced by the MTA.
$11.9 billion
— Federal aid and borrowing covering the MTA's structural deficit from 2021 to 2025.
$1.5 billion
— Planned savings actions that were cancelled in the November 2021 Plan.
$321 million
— Amount by which MTA operating expenses ended 2021 below plan.
The New York City Preliminary Budget for fiscal year 2023 includes a Program to Eliminate the Gap that successfully reduced headcount by eliminating thousands of vacant positions, yet it misses opportunities to achieve further savings through centrally managed services. To improve long-term fiscal health, the city must identify additional agency efficiencies, negotiate benefit rationalization with municipal unions, and commit to annual deposits of at least $500 million into the Rainy Day Fund.
Recommendations related to Efficiency Savings
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.
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.
The financial plan should include annual deposits of at least $500 million to the Rainy Day Fund.
Key Data
$866 million
— Savings delivered in fiscal year 2022 by the Program to Eliminate the Gap.
$1.1 billion
— Annually recurring savings delivered in fiscal year 2023 and beyond by the Program to Eliminate the Gap.
3,200
— Number of vacant positions removed from the fiscal year 2022 authorized headcount.
7,000
— Number of vacant positions eliminated in fiscal year 2023 and beyond.
$653 million
— The fiscal year 2023 fiscal cliff caused by recurring programs that were only funded for fiscal year 2022.
$1.3 billion
— Amount of programs funded with federal monies that will dry up in fiscal year 2026.
New York City agencies should implement recurring efficiency savings through the Program to Eliminate the Gap to streamline operations without cutting direct services. By leveraging technology, reducing low-impact programs, and reforming work rules, the city can achieve necessary fiscal improvements and address budget gaps.
Recommendations related to Efficiency Savings
Agencies should leverage technology to improve service delivery.
Agencies should reduce spending on low impact programs.
Agencies should work with labor to change work rules to increase efficiency.
Agencies should streamline work processes.
Agencies should consolidate like functions across agencies.
The City should either remove these labor savings or identify specific actions to achieve them.
NYCHA and H+H should implement reforms to achieve fiscal stability.
Key Data
$1.7 billion
— Total annual savings of City-funded agency spending, excluding debt service and exempted agencies.
$1.0 billion
— Portion of annual savings derived from agency operating budgets.
20,000
— Number of vacant positions as of November 2021 that agencies were asked to eliminate.
$500 million
— Unspecified labor savings included in the November 2021 Financial Plan annually beginning in fiscal year 2023.
$200 million
— Attrition savings included in the November 2021 Financial Plan annually beginning in fiscal year 2023.
New York City can achieve significant efficiency savings by modernizing labor contracts, streamlining procurement processes, and better managing city-owned space and fleet operations. Implementing these management reforms and benefit adjustments would allow the city to reduce costs and improve service quality without resorting to service cuts or layoffs.
Recommendations related to Efficiency Savings
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 money through administrative efficiencies and greater purchasing power.
The city should lengthen sanitation routes so that trucks are full when they tip to save more than $120 million annually.
The city should make the Absent Teacher Reserve time-limited to provide employees an appropriate opportunity and incentive to find new positions within the department.
The city should streamline the city’s lengthy and cumbersome procurement process to reduce the cost of large contracts.
The city should increase job assignment flexibility, extend the workweek to 40 hours for all employees, and alter vacation and sick leave accrual policies.
Key Data
$1.3 billion
— The amount the city spent to lease space in fiscal 2021, which was 72% more than in fiscal 2014.
$160 million
— Potential annual savings from streamlining the city’s lengthy and cumbersome procurement process to reduce the cost of large contracts by just 1%.
$80 million
— Potential savings from greater centralization of procurement.
$675 million
— Potential annual savings if city employees shared premium costs slightly below the level of state employees.
$160 million
— Potential annual savings from consolidating the roughly 75 separate union welfare funds.
$120 million
— Potential annual savings from lengthening sanitation routes so that trucks are full when they tip.
The November 2021 Financial Plan for New York City relies on non-recurring funds and illusionary savings, creating significant fiscal cliffs starting in 2023 and 2025. To address these gaps, the incoming administration should implement a 3 percent to 5 percent Program to Eliminate the Gap and negotiate productivity-enhancing collective bargaining agreements.
Recommendations related to Efficiency Savings
Mayor-elect Adams should support a 3 percent to 5 percent Program to Eliminate the Gap or PEG to restructure the City’s budget and workforce.
The current and incoming Administrations should work together to have options for a Program to Eliminate the Gap ready by January 1st to be considered for the Preliminary Budget.
Mayor-elect Adams should work with municipal unions to leverage the next round of collective bargaining agreements to make changes allowing the City to be more productive, using those savings to fund raises and close budget gaps.
Key Data
$750 million
— Annual amount by which budget gaps are higher than stated due to the inclusion of illusionary labor and attrition savings.
$2.9 billion
— Budget gap for next year.
$2.7 billion
— Budget gap in fiscal year 2024.
$2.1 billion
— Budget gap in fiscal year 2025.
$1.3 billion to $4 billion
— Annual federal fiscal cliff starting in fiscal year 2025 with the depletion of federal COVID-aid.
$500 million
— Deposit to the Rainy Day Fund in fiscal year 2022.
The Metropolitan Transportation Authority faces a structural annual deficit of at least $2.0 billion, necessitating the implementation of operational efficiency improvements and the continuation of planned fare increases to ensure future stability. These measures are critical as the agency relies on federal aid and borrowing to cover shortfalls while navigating uncertain funding for its capital plan.
Recommendations related to Efficiency Savings
The MTA should use this runway to implement changes that increase the efficiency of its operations.
The MTA should continue planned fare increases, coupled with the City aggressively rolling out Fair Fares.
Key Data
$2.0 billion
— structural annual deficit faced by the MTA.
$618 million
— total Transformation Plan savings not yet identified for 2021-2025.
$819 million
— total revenue from the November 2021 fare increase for 2021-2025.
$632 million
— total fiscal impact of service reductions for 2021-2025.
$735 million
— total fiscal impact of the two-year wage freeze for 2021-2025.
$2.9 billion
— amount of MLF debt that will support operations through 2025.
The current agreement to shift retiree health benefits to a Medicare Advantage plan fails to generate actual savings for the city's operating budget because the $600 million in reduced costs is diverted to a stabilization fund rather than reducing expenditures. To achieve meaningful fiscal relief, the city should implement structural changes like premium sharing for retirees and the elimination or reduction of Part B premium reimbursements.
Recommendations related to Efficiency Savings
The City should reduce the cost of retiree health benefits by 50 percent.
The City should implement premium sharing for Medicare and pre-Medicare eligible retirees.
The City should pursue the elimination or reduction of Part B premium reimbursement.
The City should pave the way for employee premium contributions for health insurance coverage.
Key Data
$3.1 billion
— Cost of retiree health and welfare benefits for the year.
$122 billion
— City's current liability for retiree health benefits, also known as other postemployment benefits (OPEB).
$600 million
— Annual reduction in the City's cost of retiree health insurance under the new approach.
5.5 percent
— Average growth of retiree health insurance costs from fiscal year 2014 to fiscal year 2022.
45 percent
— Medicare beneficiaries in New York State enrolled in Medicare Advantage Plans.
The Authorities Budget Office requires an annual budget of $5 million to effectively oversee nearly 600 state and local authorities that hold $243 billion in public debt. Increasing this funding would allow the agency to fulfill its statutory duties, including preventing wasteful spending and corruption, which are currently hindered by a skeleton staff and limited resources.
Recommendations related to Efficiency Savings
The state should increase the annual funding provided to the Authorities Budget Office to at least $5 million to ensure it has the minimum resources required to fulfill its statutory duties.
The state should provide an additional $2.95 million to the Authorities Budget Office to reach the recommended funding level, as the current budget of $2.05 million is insufficient.
Key Data
$243 billion
— Public debt held by nearly 600 state and local authorities and their subsidiaries.
$40 billion
— Annual spending by state authorities.
$20 billion
— Annual spending by local authorities.
$5 million
— Recommended annual funding for the Authorities Budget Office.
$2.05 million
— Current annual budget of the Authorities Budget Office.
40 percent
— Current staffing level of the Authorities Budget Office compared to the level envisioned in 2010.
The Metropolitan Transportation Authority faces a $2.7 billion annual structural deficit that requires immediate action to improve operating efficiency and reduce recurring costs. By implementing reforms such as productivity improvements, conductor deployment changes, and health care cost adjustments, the agency could save up to $2.9 billion annually by 2024.
Recommendations related to Efficiency Savings
The MTA should increase its subway and bus operations and maintenance productivity to achieve significant cost savings.
The MTA should reform how it deploys conductors, including implementing one-person train operation on subways and fare payment modernization on commuter rail.
The MTA should reduce employee and retiree health care spending by aligning premium sharing with other New York State employees.
The MTA should increase bus speeds to improve efficiency and reduce operational costs.
The MTA should continue the smart practice of increasing fares and tolls biennially to keep up with inflation.
Key Data
$2.9 billion
— Potential annual savings the MTA could realize by 2024 through efficiency reforms.
$1.6 billion
— Potential savings from increasing subway and bus operations and maintenance productivity.
$663 million
— Potential savings from reducing employee and retiree health care spending.
$512 million
— Potential savings from reforming conductor deployment and modernizing fare payment.
$268 million
— Potential savings from increasing bus speeds.
$2.7 billion
— The MTA's annual structural deficit, representing the gap between recurring income and expenditures.
The Metropolitan Transportation Authority faces a long-term structural deficit that may approach $2.5 billion annually once federal aid is exhausted. To address this, the agency must prioritize operational efficiency and back-office streamlining, as $150 million of its $475 million annual Transformation Plan savings target remains unidentified.
Recommendations related to Efficiency Savings
The MTA should improve the efficiency of its operations to address its structural budget shortfall.
The MTA should phase in operating savings over the next few years rather than relying on fare increases or service cuts.
The MTA must sustain and advance the progress in administrative and back-office streamlining to achieve its Transformation Plan goals.
The MTA should implement service “right-sizing” tailored to the new patterns of peak and off-peak commuting.
The MTA should focus its investment on the highest priority state of good repair and normal replacement work and make project schedules and costs publicly available.
Key Data
$150 million
— annual Transformation Plan savings target that has yet to be identified and achieved.
$475 million
— annual savings target of the ongoing Transformation Plan.
2 percent
— amount by which operating expenses in 2020 and through May 2021 were below the February plan.
$2.5 billion
— annual long-term structural deficit the MTA may face once federal funds run out.
The New York City Fiscal Year 2022 Adopted Budget fails to implement necessary structural reforms, such as scrubbing agency budgets to improve operational efficiency and prioritizing programs based on effectiveness. Instead, the budget relies on federal aid to fund recurring expenses, creating a fiscal cliff and leaving the next administration with significant annual budget gaps.
Recommendations related to Efficiency Savings
It is imperative that the City track federal spending in detail, including metrics for program goals and results.
The City should scrub agency operating budgets, evaluate the effectiveness in order to prioritize programs, and increase the efficiency of operations.
The next Administration must improve the efficiency of City agencies so that they deliver what New Yorkers need in a fiscally sustainable manner.
Key Data
$3.9 billion
— Cumulative fiscal year 2021 and 2022 savings as of the Executive Budget.
$4.0 billion
— Cumulative fiscal year 2021 and 2022 savings reported in the Adopted Budget.
$5 billion
— Annual budget gaps left for the next Administration from fiscal year 2023 to fiscal year 2025.
$1 billion
— Annual unspecified labor savings included in the projected budget gaps.
The Metropolitan Transportation Authority faces a significant long-term fiscal imbalance and should implement operational reforms to achieve annual savings of up to $2.9 billion by 2024. These reforms include improving maintenance productivity, modernizing conductor operations, and adjusting health care benefits to align with other public employees.
Recommendations related to Efficiency Savings
The MTA should improve subway facility maintenance productivity to the national median to save $981 million annually.
The agency should improve bus vehicle operations, facility, and vehicle maintenance productivity to national peer benchmarks to save $367 million annually.
The LIRR should align its vehicle operations and maintenance productivity with Metro-North Railroad to save $242 million annually.
The city and MTA should increase local bus speeds by 15 percent to reduce costs by $268 million annually.
The MTA should expand One-Person Train Operation (OPTO) on subways to save $221 million annually.
The commuter railroads should implement proof-of-payment to reduce the conductor workforce and save $292 million annually.
The MTA should apply the State’s cost-sharing agreement for retired employees to its own retired workforce to save $263 million annually.
The agency should increase active employee premium cost-sharing to the 18 percent level paid by non-represented employees to save $130 million annually.
The MTA should implement a value-based health plan redesign to save approximately $270 million annually.
Key Data
$2.9 billion
— Total annual savings from proposed operational reforms by 2024.
13,000
— Total workforce reduction by 2024 resulting from proposed reforms.
$981 million
— Annual savings from improving subway facility maintenance productivity.
$367 million
— Annual savings from improving bus vehicle operations, facility, and vehicle maintenance productivity.
$242 million
— Annual savings from aligning LIRR vehicle operations and maintenance productivity with Metro-North Railroad.
$268 million
— Annual savings from a 15 percent increase in local bus speeds.
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…
The Fiscal Year 2022 Executive Budget fails to utilize available federal aid and tax revenue to restructure spending for long-term efficiency, instead relying on non-recurring savings and increasing the workforce. Without implementing a regular Program to Eliminate the Gap or identifying recurring spending reductions, the budget leaves significant fiscal challenges for the future.
Recommendations related to Efficiency Savings
The City should be implementing a regular, reasonably sized Program to Eliminate the Gap (PEG) to help prioritize programs, improve quality, and identify savings.
The City should restructure spending to increase efficiency and preserve services.
The City needs to identify recurring spending reductions rather than relying on unspecified labor savings.
Key Data
$15 billion
— Additional federal aid provided to the City.
$5 billion
— Annual future budget gaps in fiscal years 2023 to 2025 when unspecified labor savings are removed.
5,000
— Number of additional staff the City plans to add, reversing recent progress in shrinking the workforce.
$1 billion
— Annual labor savings carried in fiscal years 2023 through 2025 that lack identified recurring spending reductions.
$1.6 billion
— Amount the City reversed its plan to use from the Retiree Health Benefits Trust to balance the budget.
$200 million
— Amount the City is increasing its general reserve in fiscal year 2022.
New York City's sanitation services suffer from declining productivity, with refuse collection hitting an all-time low of 9.3 tons per truck shift in fiscal year 2020, well below the bargained target of 10.7 tons. Implementing operational efficiencies like route optimization and volume-based fees could generate over $250 million in annual savings while helping the city reach its zero waste goals.
Recommendations related to Efficiency Savings
The City should pursue actions that increase the efficiency of sanitation services, which could generate savings that in part could be used to support zero waste efforts.
The City should regularly revise collection routes with the help of GPS technology and routing software to optimize route capacities.
The City should greatly expand containerization, including centralized drop-off sites for waste on the street in districts as appropriate.
The City should change the number of collection days in districts where appropriate.
The City should alter the number hours of a shift or move some collection into late night or overnight hours.
The City should allow routes to cross district boundaries when beneficial.
Key Data
$250 million
— Annual savings achievable by coupling a volume-based fee with effective operational management and productivity savings.
9.3 tons per truck shift
— Refuse productivity level hit in fiscal year 2020, which is an all-time low.
10.7 tons per truck shift
— Collectively bargained refuse productivity target that the Department of Sanitation has not achieved since fiscal year 2005.
5.8 tons per truck shift
— Recycling collection productivity in fiscal year 2020.
6.2 tons
— Contractual target for recycling collection productivity.
$140 million
— Estimated annual bag fee revenues that could be rebated to help address financial inequities or cover program costs.
New York City should leverage federal aid to stabilize its long-term fiscal health by implementing a mandatory, recurring program to eliminate budget gaps and by right-sizing the workforce. These strategies, including increasing reserves and requiring employee contributions to health insurance premiums, would significantly reduce projected budget deficits through fiscal year 2025.
Recommendations related to Efficiency Savings
The City should implement a recurring, mandatory Program to Eliminate the Gap (PEG) to identify and implement actions to increase efficiency.
The PEG program should generate recurring savings equal to 2 percent of City-funded agency budgets in fiscal year 2022 that grow to 3 percent in fiscal year 2023 to 2025.
No agencies should be exempt from the PEG process, as all agencies—even those providing critical health, education, and public safety services—can benefit from examining their operations to identify opportunities to reduce costs.
The City should remove half of the current vacancies in each year of the financial plan and allocate those remaining as required to efficiently staff priorities.
The City should phase in employee and retiree health insurance premium contributions over three years to reduce recurring labor costs.
Key Data
$15 billion
— New federal resources available to the City.
$6 billion
— Unrestricted American Rescue Plan (ARP) aid.
$560 million
— Recurring health insurance premium savings for the City.
$2.6 billion
— Amount of the Retiree Health Benefits Trust (RHBT) used in fiscal years 2020 and 2021 that should be replenished.
$500 million
— Annual deposits to the Rainy Day Fund (RDF) or 75 percent of the annual tax revenue growth above 3 percent, whichever is greater.
$7 billion
— Annual cost for health insurance for employees and retirees.
New York City should reject costly early retirement incentives for municipal employees, as natural attrition and hiring freezes are already effectively reducing the workforce size. Instead, the city should focus on strategic hiring and organizational improvements to maintain fiscal stability and service quality without unnecessary spending.
Recommendations related to Efficiency Savings
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 that improve quality and productivity.
The city should avoid a rehiring spree despite the fiscal relief provided by federal funds to prevent long-term fiscal destabilization.
The city should manage services, finances, federal money, and the government workforce well to ensure it is in a better position to serve New Yorkers and weather future shocks.
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 early retirement incentive, spread over 4 years.
20,000
— Number of people who leave city government employment each year, providing a free alternative to workforce reduction.
14,860
— Number of positions the city workforce shrunk by between September 2019 and February 2021 due to a partial hiring freeze.
$250 million
— Estimated cost the city would incur to achieve a 2,250 position reduction through early retirement incentives.
$5 billion
— Amount of additional federal aid the city will receive, which guarantees no layoffs through June 2022.
New York City faces significant long-term fiscal challenges, with budget gaps exceeding $5 billion annually, necessitating a shift from short-term fixes to sustainable, long-term solutions. The city should leverage federal aid to support essential services while implementing structural reforms, such as negotiating work rule changes and rationalizing employee benefits, to achieve recurring efficiency savings.
Recommendations related to Efficiency Savings
The City should commit to innovative improvements across government to increase efficiency and cost-effectiveness while improving services critical to the City’s competitiveness and fairness.
Successfully negotiating work rule changes with municipal unions and rationalizing employee benefits could yield substantial recurring savings exceeding $1 billion per year.
The City should pursue labor savings ideas such as eliminating the Absent Teacher Reserve to help achieve long-term fiscal stability.
The City should consider consolidating union welfare funds as part of a broader strategy to implement recurring budget savings.
The City should focus on modernizing Department of Sanitation productivity differentials to contribute to necessary recurring budget savings.
The City should move toward implementing employee contributions to health insurance premiums to help achieve long-term fiscal sustainability.
Key Data
$2.2 billion
— Total savings provided by the Citywide Savings Program across fiscal years 2021 and 2022.
$174 million
— Efficiency savings expected next year, primarily from reduced overtime at the Police Department and Department of Correction.
$150 million
— Recurring efficiency savings expected annually in fiscal years 2023 to 2025.
$57 million
— Savings expected this year from hiring and attrition management at City agencies.
$350 million
— Annual savings expected from hiring and attrition management in the outyears.
$1 billion
— Potential recurring annual savings from negotiating work rule changes and rationalizing employee benefits.
Federal aid provides a temporary opportunity to stabilize finances and restructure government operations to achieve long-term sustainability without raising taxes. By implementing targeted efficiency initiatives, such as consolidating benefit funds and optimizing labor deployment, the city can reduce costs and address future budget gaps.
Recommendations related to Efficiency Savings
The city should over two years phase in efficiency initiatives, totaling 3 to 5% of city-funded agency spending.
Sanitation routes could be lengthened so that trucks are filled before they are tipped to improve operational efficiency.
Fire engine companies could be staffed with four firefighters, instead of some having five to reduce labor costs.
The 108 union-administered benefit funds could be consolidated to reduce administrative costs.
Employees could contribute to their health insurance like state employees and those in the private sector.
The state should eliminate unproductive economic development programs to narrow future budget gaps.
Key Data
$1 billion
— Annual labor cost reduction achievable through productivity enhancements and benefit changes.
3 to 5%
— Target for efficiency initiatives of city-funded agency spending to be phased in over two years.
108
— Number of union-administered benefit funds that could be consolidated to reduce costs.
$5 billion
— Projected annual budget gaps the city faces in the future.
The American Rescue Plan offers a critical opportunity to stabilize New York's short- and long-term finances by using federal aid to address pandemic-related needs while simultaneously implementing structural improvements to government efficiency. Without these long-term enhancements to government effectiveness and quality, the state and city risk merely delaying a necessary fiscal reckoning.
Recommendations related to Efficiency Savings
The State and City must use federal money wisely to support COVID-related needs and spread aid over time while taking clear action to increase government efficiency.
The State and City must pursue long-term improvements in government efficiency, effectiveness and quality to avoid kicking their fiscal reckoning down the road.
The State and City should ensure that recurring revenues are sufficient to support critical services while remaining low enough to avoid driving away residents and business.
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,…
Early retirement incentives are often less cost-effective than attrition or layoffs for reducing government workforce expenses, as they frequently result in paying employees who would have retired regardless. Instead of pursuing these incentives, municipalities should prioritize workforce reduction through attrition to achieve more reliable fiscal savings.
Recommendations related to Efficiency Savings
The City should reduce its workforce through attrition and not pursue the ERI.
If localities are considering an ERI, it is important to do a thorough analysis of the costs and benefits and commit to a strict hiring freeze.
Key Data
$110,000
— Average additional pension contribution per retiree estimated by the Actuary for the City of New York.
$90,200
— Average salary of a municipal retiree.
$1.1 billion
— Total incentive cost of the proposed ERI.
$5.9 billion
— Potential five-year salary savings if positions are kept vacant.
32%
— Portion of the ERI incentive cost likely to be an unneeded expense flowing to employees who would have retired anyway.
$4.3 billion
— Savings achievable over five years under voluntary separations.
Early retirement incentives are a less efficient method for workforce reduction than attrition, as they incur significant pension costs and often pay for retirements that would have occurred anyway. Relying on attrition rather than early retirement incentives could yield $4.3 billion in net savings over five years, compared to $3.3 billion with an incentive program.
Recommendations related to Efficiency Savings
In light of the City’s fiscal stress and the availability of other options to balance the budget, the City should reduce its workforce through attrition and not pursue the ERI.
Key Data
$110,000
— Estimated cost per participant over five years for the proposed early retirement incentive.
$4.3 billion
— Potential net savings over five years if the City reduces its workforce through attrition.
$3.3 billion
— Potential net savings over five years if the City utilizes an early retirement incentive and fills one-third of vacancies.
32 percent
— Amount by which net savings over five years would be higher using attrition compared to an early retirement incentive.
$350 million
— Estimated portion of early retirement incentive costs that would likely be an unneeded expense.
The November 2020 Financial Plan relies heavily on non-recurring debt service savings and unachieved labor savings, failing to address the need for long-term fiscal stability. To close the projected $3.8 billion budget gap for fiscal year 2022, the city must prioritize identifying recurring savings, reducing headcount, and aligning employee benefit contributions with other public agencies.
Recommendations related to Efficiency Savings
The Mayor should immediately ask each agency to identify significant recurring savings, with a focus on improving long run efficiency, for potential inclusion in the Preliminary Budget.
Attrition and the hiring freeze should be used to reduce the City’s headcount over the full term of the four-year financial plan.
The City should continue to work with labor to identify efficiencies and align employee benefit contributions to those of other public agencies.
Key Data
60%
— Roughly 60% of the annual savings in the November 2020 Financial Plan do not recur.
0.35%
— The fiscal year 2023 savings amount to just 0.35% of City-funded spending.
$1 billion
— The Financial Plan includes $1 billion in annual labor savings in fiscal years 2022 to 2024 that have not been achieved.
$3.8 billion
— The City needs to close the $3.8 billion fiscal year 2022 budget gap in the upcoming Preliminary Budget.
The Metropolitan Transportation Authority faces a $15.9 billion budget gap between 2020 and 2024, necessitating a focus on operational efficiency to mitigate drastic service cuts and layoffs. Potential savings include $1 billion from improved bus and subway maintenance efficiency and $200 million from equalizing employee and retiree health benefit contributions.
Recommendations related to Efficiency Savings
The MTA should focus on improving the system’s operating efficiency to mitigate drastic service cuts and layoffs.
The MTA should bring lagging bus operations and subway maintenance efficiency in line with other large systems to achieve $1 billion in savings.
The MTA should match the efficiency of Long Island Rail Road to that of MetroNorth to contribute to potential savings.
The MTA should equalize employee and retiree health benefit contributions to those of State employees to save $200 million annually.
The MTA should collaborate with labor to ensure they are active partners in generating savings.
Key Data
$1 Billion
— Potential savings from bringing lagging bus operations and subway maintenance efficiency in line with other large systems.
$200 Million
— Annual savings from equalizing employee and retiree health benefit contributions to those of State employees.
9,000
— Number of layoffs that would accompany drastic service cuts.
New York City must move beyond technical budget adjustments in its November modification to implement aggressive management strategies that control spending and address long-term fiscal risks. Officials should prioritize identifying recurring savings, removing unfeasible future savings from the financial plan, and eliminating unfilled positions to improve government efficiency.
Recommendations related to Efficiency Savings
Agencies should be tasked with identifying savings, especially recurring savings that improve the efficiency of government and provide multi-year budget relief.
Savings in future years that are not based on a feasible plan should be removed from the financial plan.
Unfilled positions should be removed from the financial plan to reflect the partial hiring freeze.
The City should provide a detailed accounting of both response costs and core services to ensure transparency and fiscal responsibility.
Key Data
$600 million
— Savings announced in fiscal years 2021 and 2022 through refunding debt.
$1 billion
— Annual, recurring labor savings pledged in the Adopted Budget starting in fiscal year 2021.
$633 million
— Expenses shifted from fiscal year 2021 to fiscal year 2022 by the City and some municipal unions.
$927 million
— Projected overtime spending in the Adopted Budget.
$410 million
— Overtime spent through October, representing 44 percent of the Adopted Budget amount.
324,036
— Full-time and full-time equivalent employees at the end of fiscal year 2020.
New York City faces a fiscal crisis that can be managed through rigorous agency efficiency, attrition, and labor-management cooperation rather than layoffs or borrowing. Implementing these management strategies and establishing strict oversight for any necessary borrowing would ensure long-term fiscal stability without relying on unsustainable debt.
Recommendations related to Efficiency Savings
Commissioners should comb their agencies to increase efficiency of city services, or reduce spending on lower priorities.
The city should use attrition, as a stricter hiring freeze could 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 starts with implementing the savings included in this year’s budget.
The Financial Control Board should certify and oversee the plan and borrowing, reestablishing a control period.
Key Data
$1 billion
— Amount of labor savings committed to in the budget that had no identified savings to fulfill.
7,000
— Number of employees per year that could be reduced through a stricter hiring freeze.
$2 billion
— Amount by which the current city budget, adjusted for inflation, is higher than what the city spent in 2018.
14,000
— Number of additional workers the city has compared to the highest point before the last recession.
22,000
— Number of workers the city would have to lay off if the Legislature does not authorize borrowing.
$5 billion
— Amount of money the city might borrow, which would require paying back $7 billion.
New York City should prioritize implementing all planned budget savings and exploring alternative balancing options before considering borrowing to cover operating expenses. Any authorization for borrowing must be contingent upon a comprehensive fiscal stability plan and strict oversight by the Financial Control Board.
Recommendations related to Efficiency Savings
The City should implement all the savings included in this year’s adopted budget and more in the future before resorting to borrowing.
Borrowing should only be authorized for the amount needed to address additional revenue shortfalls.
No borrowing should occur without a comprehensive and feasible plan that leads to fiscal stability.
Borrowing must be accompanied by certification, monitoring, and approval of major actions by the Financial Control Board.
City leaders should pursue better options to balance this year’s budget before resorting to borrowing.
New York City faces a significant fiscal crisis requiring $1 billion in recurring labor savings to avoid widespread layoffs. Achieving these savings involves structural reforms to employee benefits, such as health insurance premium sharing and welfare fund consolidation, alongside productivity improvements like modernized work rules and overtime caps.
Recommendations related to Efficiency Savings
The City should implement premium-sharing for employee and retiree health insurance to bring benefits in line with other public employers.
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.
City contributions to union annuity funds should be reduced or eliminated.
The City should seek State legislation to eliminate the Variable Supplement Funds and have the assets transferred to the main pension funds.
The guaranteed return on the Tax-Deferred Annuity fixed return fund should be sharply reduced through State legislation.
The City could achieve savings by reducing the annual leave accrual for civilian employees.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
The City should standardize work hours to a forty-hour work week for all employees.
The City should standardize four firefighters per engine company as the standard staffing level.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
Key Data
$1 billion
— The recurring savings target from negotiations with labor unions in the Adopted Budget for Fiscal Year 2021.
$50.2 billion
— The projected personnel costs for fiscal year 2021 out of a $93.5 billion total budget.
7.0 percent
— The annual average growth rate of health insurance premium costs from fiscal year 2009 to fiscal year 2019.
$1.2 billion
— The estimated annual value of the taxpayer-provided guarantee for the Tax-Deferred Annuity fixed return investment option.
$1.1 billion
— The amount spent on uniformed overtime in fiscal year 2019.
$43 million
— The estimated cost of the sanitation worker differential in fiscal year 2018.
The Metropolitan Transportation Authority faces a severe fiscal crisis with a cumulative $16.2 billion budget gap through 2024, necessitating difficult operational adjustments to maintain service. To address these financial challenges, the agency must prioritize efficiency savings, including labor cost reductions, service optimization, and capital program rescoping, rather than relying solely on debt or federal aid.
Recommendations related to Efficiency Savings
The MTA should work with the labor force to implement additional savings by increasing the efficiency of operations, and reducing overtime and employee benefits costs.
The agency should forego new headcount, specifically the 776 positions planned for fiscal year 2021 that would increase personnel costs by $250 million.
The MTA should rescope the capital program to focus on projects that will preserve the system’s state of good repair and reduce future maintenance expenses.
The agency should optimize service to match ridership patterns by changing the frequency of service and adjusting service on overlapping routes for buses, subways, and the commuter rail network.
The MTA should increase tolls by a greater percentage than the currently planned 4 percent increase in 2021 to account for the faster return of toll traffic compared to ridership.
Key Data
$16.2 billion
— Cumulative budget gap for the MTA from 2020 through 2024.
$5.1 billion
— Anticipated shortfall in fare and toll revenue in 2020.
$1.6 billion
— Anticipated shortfall in MTA tax revenues in 2020.
$250 million
— Increased personnel cost associated with adding 776 new positions in fiscal year 2021.
$567 million
— Estimated cost of new COVID-related cleaning in 2020.
The NYPD's fiscal year 2021 budget reduction of $474 million is largely driven by unrealistic, one-time overtime cuts rather than structural changes. Achieving sustainable savings requires a concrete operational strategy and potentially negotiated labor reforms, as current projections rely on temporary measures that do not address long-term spending.
Recommendations related to Efficiency Savings
Overtime reforms need to be far-reaching and potentially negotiated with labor unions to achieve the steep reduction currently budgeted.
The City must develop a plan or operational strategy to accompany overtime reductions, as prior efforts have only slowed growth rather than decreasing expenses.
Key Data
$474 million
— Reduction in the NYPD City-funded budget when measured against the Executive Budget for Fiscal Year 2021.
$354 million
— Amount of the reduction in the Adopted Budget that comes from overtime expenses.
$82 million
— Recurring annual reduction to the operating budget, mainly from reductions in hiring.
1,404 positions
— Total reduction in the NYPD workforce in fiscal year 2021.
The City's fiscal year 2021 budget relies heavily on one-time measures like reserves and federal aid rather than sustainable, recurring efficiency savings. Only a small fraction of the proposed savings comes from actual operating efficiency improvements, leaving the city vulnerable to future budget gaps.
Recommendations related to Efficiency Savings
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.
A package that consolidates union welfare funds, phases in employee health insurance premium contributions, changes work rules to improve productivity, and shrinks the workforce through attrition could generate savings of these magnitude.
If the City filled only a portion of those positions, broadening the existing partial hiring freeze, savings would be substantial.
The City should not turn to long-term borrowing to address an imbalance in revenues and expenditures; borrowing should be a last resort.
The City and labor could identify savings by agreeing to change other collectively bargained benefits, including vacation days, sick leave, work hours, and even contractually agreed upon raises and steps.
Key Data
$270 million
— Efficiency initiatives provided this amount of savings in fiscal year 2021.
$310 million
— Efficiency initiatives are projected to provide this amount of savings per year in fiscal years 2022 to 2024.
0.39 percent
— Efficiency initiatives accounted for this portion of the fiscal year 2021 adjusted City-funded budget.
0.42 percent
— Efficiency initiatives accounted for this portion of City-funded spending in fiscal year 2022.
0.44 percent
— Efficiency initiatives accounted for this portion of City-funded spending in fiscal year 2024.
$1.7 billion
— Total Citywide Savings Programs, net of restored cuts and COVID-19 related federal aid, totaled this amount in fiscal year 2020.
The Metropolitan Transportation Authority faces a severe fiscal crisis, with operating shortfalls estimated between $8.4 billion and $12.6 billion for 2020 and 2021. To address this, the authority must prioritize operational efficiencies, including renegotiating union work rules and restarting the Transformation Plan to achieve over $500 million in annual savings.
Recommendations related to Efficiency Savings
The MTA should restart the Transformation Plan and include additional efficiencies from operational changes, such as changes in union agreements regarding work rules and compensation.
Workers and their union representatives should collaborate in revising work practices to ensure the MTA’s financial survival and protect future job security.
The new financial plan should set a substantial target for savings from negotiations with the major unions.
MTA leaders should constantly monitor and assess ridership on each rail, subway, and bus route to optimize service levels and identify where service adjustments are needed.
Key Data
$500 million
— Annual savings sought by the Transformation Plan through reorganization and administrative efficiencies.
$700 to $800 million
— Estimated annual cost for COVID-19 related cleaning, testing, and personal protective equipment in 2020 and 2021.
$8.4 billion to $12.6 billion
— Estimated operating shortfall for the MTA over the 2020 and 2021 period.
The fiscal year 2021 budget relies on questionable savings and lacks specific plans to achieve $1 billion in labor-related cost reductions, leaving the city vulnerable to future service cuts. To avoid drastic layoffs and service reductions, the city must implement a concrete program of recurring efficiency savings and aggressive attrition.
Recommendations related to Efficiency Savings
The City must implement a program of recurring efficiency savings and aggressive attrition to avoid drastic service reductions and layoffs.
City leaders should focus their management on actions that reduce the yawning multiyear budget gaps presented by the fiscal crisis.
The City must provide specificity on the actions needed to produce $1 billion in savings from collaboration with labor unions.
Key Data
$300 million
— The amount by which the budget attempts to reduce police overtime, which is considered highly unlikely given the weak history of overtime management.
$1 billion
— The amount of savings the City aims to achieve through collaboration with municipal labor unions, for which the budget lacks specific action plans.
New York State lacks a comprehensive, transparent performance management system to track agency metrics and ensure accountability, despite past recommendations to implement one. Establishing such a system would allow officials to better allocate resources, improve service delivery, and achieve greater efficiency across state government.
Recommendations related to Efficiency Savings
The State should implement a system that identifies key agency and authority programs and establishes output and outcome goals for each program.
The State should implement a system that identifies metrics for each program, including input, process, output, outcome, quality, and efficiency measures.
The State should implement a system that establishes performance targets for each program’s outputs, outcomes, quality, and efficiency.
The State should implement a system that establishes implementation benchmarks for new initiatives.
The State should implement a system that identifies risks and pressures to State programs from adverse shocks such as natural disasters or economic downturns.
The State should implement a system that institutes a management and accountability process to review metrics and incorporate findings into ongoing management.
The State should implement a system that allows for oversight and auditing of data.
The State should implement a system that links to the budget cycle to inform budget and policy decisions for elected officials, agency administrators, and staff.
The State should implement a system that provides public information about agency, authority and program performance that is accessible, readily understood, and provides quantitative measurements of service delivery efficiency, cost, and quality.
The State should implement a system that is established through statutory provisions that promote consistency in reporting across agencies, authorities, and administrations.
Key Data
$34 million
— Estimated savings in workforce costs at State agencies achieved by the Business Services Center in its first four years of operation.
34 percent
— Reduction in infant mortality rates in New York State over the past decade, attributed to maternal care strategies.
1,683
— Number of data files available in the Open Data NY catalog as of April 2020.
244
— Number of data files available when the Open Data NY portal launched in March 2013.
13 minutes 14 seconds
— Average wait time for DMV Direct services reported in the Virginia Department of Motor Vehicles strategic plan.
47 percent
— Rate of kindergarten readiness in Maryland during the 2014-15 school year.
New York City faces significant budget gaps due to the pandemic, requiring a combination of expenditure reductions, workforce attrition, and efficiency improvements to maintain fiscal stability. By implementing strategies like consolidating welfare funds, centralizing procurement, and reforming health insurance contributions, the city can balance its budget without resorting to long-term borrowing or damaging service cuts.
Recommendations related to Efficiency Savings
Welfare fund consolidation could generate efficiency savings on both administrative and benefit costs.
The City should resume study of and implement a volume-based fee for refuse to reduce waste generation by households.
Centralizing procurement at the Department of Citywide Administrative Services could save about $80 million.
The City should implement time limits on or elimination of the Absent Teacher Reserve to generate savings.
Implementing a health insurance premium-sharing arrangement would provide significant recurring savings while ensuring the City continues to provide attractive benefits.
The five-year capital plan could be reduced by $2.4 billion through operational strategies to reduce planned new school construction.
Key Data
$164 million
— Estimated efficiency savings from welfare fund consolidation.
$100 million
— Potential annual savings from productivity improvements at the Department of Sanitation.
$80 million
— Potential savings from centralizing procurement at the Department of Citywide Administrative Services.
$60 million
— Potential annual savings from implementing time limits on or eliminating the Absent Teacher Reserve.
$350 million
— Annual cost reduction from implementing retiree health benefit premium sharing.
$700 million
— Annual savings from implementing active employee health benefit premium sharing.
CBC hosted a special panel discussion of prominent fiscal experts who helped New York overcome some of the most dire crises of the past. They provided insights and lessons from past experiences to help us understand and navigate the looming crisis. Stephen Berger Chairman, Odyssey Investment Partners; Former Executive Director,…
The Economic Development Corporation faces significant fiscal strain due to the rising costs of operating the NYC Ferry system, which resulted in an operating loss in 2019. To restore financial stability, the agency must pursue efficiency savings by redesigning programs, adjusting ferry fare policies, and delaying costly expansions.
Recommendations related to Efficiency Savings
All agencies should scrutinize their operations to find efficiencies and redesign or eliminate programs that are not cost-effective.
In the coming months, 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
$53 million
— Amount spent by the Economic Development Corporation to subsidize NYC Ferry in 2019.
$10 million
— Estimated reduction in operating costs for fiscal year 2021 resulting from ferry service changes.
$9.34
— Subsidy cost per individual ferry ride.
$1.8 million
— Operating loss recorded by the Economic Development Corporation in 2019.
$382.7 million
— Total operating revenue for the Economic Development Corporation in 2019.
$384.2 million
— Total operating expenses for the Economic Development Corporation in 2019.
To address fiscal stress caused by the pandemic, governments should prioritize efficiency improvements, such as leveraging technology and reforming outdated work practices, to reduce expenditures without compromising service quality. When further cuts are necessary, officials should carefully weigh the long-term impacts of service reductions, staff furloughs, and compensation adjustments against the need to maintain a competitive jurisdiction.
Recommendations related to Efficiency Savings
Government leaders should improve the efficiency of public service delivery, thereby reducing expenditures or getting more value from resources, even in the best of times.
Reducing expenditures by delivering services more efficiently is the most beneficial approach because consumers can receive the same or better level and quality of service at a lower cost.
Service reductions should be focused on programs with limited benefits or that are lower priority to minimize negative consequences.
To the extent state or local government employees’ compensation is brought into line with that of the private sector, these adjustments enhance the jurisdictions’ attractiveness by helping to keep taxes at competitive levels.
The risk of neglecting infrastructure can be minimized by making cuts to capital projects that are not for essential infrastructure, such as projects characterized as “political pork.”
Key Data
$100 million
— Amount of capital spending avoided that saves about $6.5 million annually in debt service.
$6.5 million
— Annual savings in debt service for every $100 million of capital spending avoided.
two-thirds
— Maximum portion of any rainy day fund recommended for use in the first year of a fiscal crisis.
The Fiscal Year 2021 Executive Budget relies on a $2.7 billion savings program that lacks recurring value and focuses on underspending rather than structural efficiencies. To better manage the fiscal crisis, the city should prioritize identifying non-core services and implementing operational efficiencies in areas like contracts, fleet operations, and employee benefits.
Recommendations related to Efficiency Savings
The City should work with labor partners to identify non-core services and subsidies to reduce or suspend, while seeking additional efficiencies in agency operations, employee benefits, contracts, leased space, and fleet operations.
Spending reductions should be focused on paring down to efficiently provide core needed services, so that substantial savings can strengthen the City’s ability to weather the full length of the economic downturn.
The City should implement a larger savings plan with more recurring value to address the fiscal crisis across multiple years.
Key Data
$2.7 billion
— The total value of the two-year savings program.
2 percent
— The portion of the budget covered by the savings program.
$2.6 billion
— The amount diverted from the Retiree Health Benefits Trust (RHBT).
$1.4 billion
— The amount diverted from other reserves.
$5.0 billion
— The looming gap projected for fiscal year 2022.
7.4 percent
— The projected tax revenue growth for fiscal year 2022.
New York City faces a potential $6 billion revenue shortfall in fiscal years 2020 and 2021, necessitating an immediate and ambitious approach to budget savings beyond the currently proposed $1.3 billion target. To ensure fiscal stability, the city must prioritize recurring efficiency savings, control non-critical spending, and prepare for potential workforce adjustments or service cuts.
Recommendations related to Efficiency Savings
The City should control all non-critical spending in the current year.
The City should increase the target size of next year’s savings program to $3 billion.
Agencies should be charged with generating a menu of options for spending reductions that are rooted in improving efficiency, streamlining operations, and supporting more cost-effective operations.
The City will have to work with municipal unions on workforce savings.
The City will have to potentially enact more far-reaching measures, such as hiring freezes, layoffs, or service cuts.
Key Data
$1.3 billion
— The savings target announced for the Executive Budget for Fiscal Year 2021.
$20 billion
— Potential revenue shortfalls over three fiscal years resulting from a recession.
$6 billion
— Estimated revenue shortfall in fiscal years 2020 and 2021.
0.66 percent
— The amount of city-funded spending represented by the two-year savings presented in the Executive Budget for Fiscal Year 2020.
0.91 percent
— The amount of city-funded spending represented by the $1.3 billion target announced for the Executive Budget for Fiscal Year 2021.
0.23 percent
— The average amount of city-funded spending previously represented by efficiency savings.
New York City's current savings program relies heavily on routine budget adjustments like re-estimates and debt service savings, with true efficiency savings accounting for only 33 percent of the total. Achieving a consistent 1 percent annual efficiency savings target would have reduced the fiscal year 2021 budget by $2 billion and slowed the growth of city-funded expenditures.
Recommendations related to Efficiency Savings
The Citywide Savings Program should prioritize greater efficiency savings to reduce spending without reducing services.
The administration should shift its focus away from routine budget adjustments like re-estimates and funding shifts toward structural changes in agency practices.
The city should aim for 1 percent annual efficiency savings to better control the growth of city-funded expenditures.
Key Data
$2,360 million
— The total five-year savings identified by the FY2021 Citywide Savings Program.
0.6%
— The portion of city-funded spending that the FY2021 Citywide Savings Program identifies as savings over five years.
33%
— The share of the FY2021 Citywide Savings Program comprised of efficiency savings.
0.23%
— The average efficiency savings as a percent of city-funded spending between FY2016 and FY2021.
$2 Billion
— The amount the FY2021 budget would have been reduced by if 1 percent annual efficiency savings had been achieved since FY2016.
4.7%
— The average annual growth rate of the city-funded budget if 1 percent efficiency savings had been identified in each budget cycle since FY2016.
The fiscal year 2021 preliminary budget limits new spending programs, but the citywide savings plan only accounts for 0.4 percent of city-funded expenditures, indicating a need for greater agency efficiency. To improve fiscal stability, the City Council should avoid new spending initiatives and prioritize depositing new revenues into the city's reserves.
Recommendations related to Efficiency Savings
Greater agency efforts are needed to increase efficiency.
The City Council should follow the Mayor’s lead in holding the line on new spending initiatives.
New revenues should be deposited in the City’s reserves.
Key Data
6 percent
— City-funded spending growth annually in fiscal years 2018 and 2019.
4.0 percent
— Projected city-funded spending growth in fiscal year 2020.
1.7 percent
— Projected city-funded spending growth in fiscal year 2021.
0.4 percent
— Fiscal year 2021 savings amount as a percentage of city-funded expenditures.
$1.5 billion
— Lower bound of the amount added to the budget between the Preliminary Budget and the Adopted Budget in the last two years.
$2.0 billion
— Upper bound of the amount added to the budget between the Preliminary Budget and the Adopted Budget in the last two years.
New York State faces a significant fiscal imbalance with a projected four-year budget gap of $28.8 billion, driven by accelerating spending in Medicaid and education aid. To address this, the state should prioritize recurring spending reductions, such as reforming Medicaid and retiree health benefits, rather than increasing taxes.
Recommendations related to Efficiency Savings
Reconstitute the Medicaid Redesign Team to identify savings.
Focus education aid on needy districts to fund fully SBE.
Reduce unproductive economic development program spending.
Consider reforms to retiree health benefits that were proposed repeatedly in recent Executive Budgets.
Exercise powers granted under the Medicaid global cap to prevent Medicaid spending from exceeding budgeted amounts in future periods.
Key Data
$28.8 billion
— The total four-year budget gap facing the State.
$6.1 billion
— The budget gap projected for the next fiscal year.
$3.6 billion
— The amount in Medicaid supplemental payments that should be reformed.
$800 million
— The amount by which education spending increased last year over the amount needed to fund a sound basic education.
$4.4 billion
— The amount New York spends annually on economic development programs.
$12.5 billion
— The amount previously unbudgeted Medicaid spending contributes to the total four-year State budget gap.
Authorizing design-build and other innovative procurement methods for New York City would allow capital projects to be completed faster and at a lower cost by providing agencies with greater flexibility. While there are concerns regarding project-labor agreements and staffing protections, the overall benefits of these procurement reforms represent a significant improvement for city capital project delivery.
Recommendations related to Efficiency Savings
The Governor should sign A7636B/S6293A to authorize New York City to use design-build and other innovative capital procurement methods.
Future amendments should address concerns regarding the ties between alternative procurement methods and project-labor agreements.
Future amendments should address protections for public sector capital project managers and prohibitions on using outside contractors to maintain assets built through design-build.
New York City's pupil transportation system costs $1.4 billion annually, and proposed legislation would mandate costly employee retention and pay provisions that prevent the city from negotiating more efficient contracts. Rejecting this bill is necessary to maintain procurement flexibility and secure long-term savings for taxpayers.
Recommendations related to Efficiency Savings
The Governor should veto A7749/S6208, which would impose costly restrictions on school bus contracts in New York City.
The City must maintain flexibility to procure and negotiate pupil transportation contracts to secure savings for future taxpayers.
Key Data
$1.4 billion
— Annual cost of New York City pupil transportation.
The Metropolitan Transportation Authority faces a cumulative cash shortfall of $637 million by 2023, a situation that requires aggressive implementation of budget reduction plans and productivity-focused labor negotiations to ensure fiscal stability. Achieving these financial targets is essential to avoid service cuts or fare increases, as the current plan relies on optimistic assumptions regarding economic growth and cost-saving measures.
Recommendations related to Efficiency Savings
It is important that the MTA move forward aggressively with the Transformation and Budget Reduction Plans to improve the efficiency and effectiveness of operations.
It is critical that the MTA negotiate a labor settlement focused on increased productivity with the TWU, since labor costs represent three-fifths of operating costs.
Any raises negotiated in the settlement should be offset by savings from productivity gains and in health and welfare benefit costs so that there is a “net zero” impact on the MTA’s bottom line.
Key Data
$637 million
— Cumulative cash shortfall projected for the MTA by 2023.
$740 million
— Shortfall projected in the July forecast for the MTA.
$361 million
— Expected savings from renegotiating paratransit agreements with New York City.
$451 million
— Reduction in projected savings for the Budget Reduction and Transformation Plans.
$200 million
— Expected revenue generation from reducing fare evasion.
$144 million
— Decrease in Payroll Mobility Tax collections.
New York City's budget has grown at an unsustainable pace, necessitating a shift toward prudent fiscal management that prioritizes operational efficiency and recurring savings. To prepare for potential economic downturns, the city must curb spending growth, stabilize the municipal workforce, and implement more rigorous savings targets for all agencies.
Recommendations related to Efficiency Savings
The City should restrain spending by offsetting new expenses with recurring commensurate savings.
The City should keep municipal headcount flat to avoid further increases in the workforce.
The City should substantially increase annual agency savings targets and ensure those savings recur.
All agencies should be required to identify and implement budget savings from improved operational efficiency equal to at least 1 percent of an agency’s city-funded budget.
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.
Key Data
$714 million
— The amount of annual recurring savings that would be produced by requiring agencies to identify and implement budget savings from improved operational efficiency equal to at least 1 percent of their city-funded budget.
326,739
— The number of full-time and full-time equivalent employees in the municipal workforce at the end of fiscal year 2019.
29,000
— The increase in the number of municipal employees since fiscal year 2014.
$20 billion
— The potential amount tax revenues could fall below financial plan projections over three years in the event of a recession.
15.5 percent
— The estimated share of all announced savings that came from efficiency initiatives between the Executive Fiscal Year 2016 Budget and the Executive Fiscal Year 2020 Budget.
The New York State Legislature passed 18 bills that would increase pension and disability benefits for various public employees, resulting in a projected first-year cost of at least $71 million. These 'benefit sweeteners' undermine previous fiscal reforms and should be vetoed to prevent unnecessary increases in public personnel costs.
Recommendations related to Efficiency Savings
The Governor should veto all 18 bills passed by the Legislature to enhance pension or disability benefits, as they provide additional benefits without offsetting savings.
The Governor should continue the tradition of rejecting benefit sweeteners to effectively contain personnel costs.
The Governor should veto A7620-A/S5903-A, which would cost $5.6 million annually to allow New York City police officers to receive retirement credit for time spent as cadets.
Key Data
$71 Million
— Projected first-year cost of the 18 benefit sweetener bills.
$41 Million
— First-year cost of A4431/S5207, the most expensive bill passed.
$15.7 Million
— First-year cost of A7874-A/S5905-A, which would require New York City paraprofessionals to join the Teachers Retirement System.
$5.6 Million
— Annual cost of A7620-A/S5903-A, which would allow New York City police officers to receive retirement credit for time spent as cadets.
$2.1 Million
— First-year cost of A5324/S5133, which would grant enhanced disability benefits to ambulance medical technicians in Nassau County.
$1.5 Million
— First-year cost of A5021/S3946, which would expand disability benefits for Nassau County sheriffs and correction officers.
New York State's budget understates Medicaid costs by billions of dollars due to payment deferrals, necessitating a realignment of the budget with actual expenses. To achieve this, the state should reduce Medicaid spending, cut wasteful economic development programs, and better target education aid to needy districts.
Recommendations related to Efficiency Savings
The State should align the budget with actual costs.
The State should reinvigorate the previously successful Medicaid Redesign Team to achieve significant reductions in per-enrollee costs.
The State should cut wasteful economic development spending.
The State should slow the rapid growth in school aid by better targeting aid to needy districts.
The State should reduce Medicaid spending to be in line with budgeted amounts.
Key Data
$1.7 billion
— The amount of State funds deferred from March 2019 to fiscal year 2020 to adhere to the Medicaid Global Cap.
$9 billion
— The cumulative total by which the State's financial plan understates Medicaid costs.
$3.5 billion
— The projected budget gap in fiscal year 2020 after accounting for deferred costs.
$6.6 billion
— The projected budget gap in fiscal year 2023 after accounting for deferred costs.
$800 million
— The amount the State increased education aid in fiscal year 2020 more than was necessary to fund a sound basic education.
New York City's commercial waste collection system requires reform to reduce vehicle miles traveled and improve efficiency, but a non-exclusive zone model is preferable to an exclusive one to maintain competition and service quality. Implementing non-exclusive zones with three to five carters can achieve most of the environmental and efficiency benefits while avoiding the risks of service failure and higher costs associated with exclusive contracts.
Recommendations related to Efficiency Savings
The City Council should enact non-exclusive waste zones to achieve the benefits of a zone system while maintaining competition and minimizing fiscal risk.
The City Council should amend Intro 1574 to permit the Department of Sanitation to award contracts to three to five carters per zone.
Key Data
50%
— The projected reduction in vehicle miles traveled (VMT) under a non-exclusive zone model.
58%
— The projected reduction in vehicle miles traveled (VMT) under an exclusive zone model.
3 to 5
— The number of carters per zone that the City Council should be permitted to award contracts to.
New York City's spending on leased real estate exceeded $1.1 billion in fiscal year 2018, a 40 percent increase since 2014 that has outpaced growth in the city budget and headcount. Despite this rising cost, the city lacks the systematic data and rigorous management metrics necessary to ensure efficient space utilization and control future lease obligations, which currently total $9.7 billion.
Recommendations related to Efficiency Savings
DCAS should accelerate efforts to improve its management, monitoring and analysis of leased space to ensure its use is efficient and cost-effective.
The City must uphold the Charter-mandated obligation to collect, monitor, and publish data on the City’s real estate holdings.
DCAS should use data to evaluate whether agencies efficiently use their facilities, whether owning or leasing space is more cost effective, and whether expiring leases should be extended or vacated.
The City should establish clear reduction targets and metrics to track progress on space management initiatives.
Key Data
$1.1 billion
— City spending on leased space in fiscal year 2018.
40 percent
— Growth in lease costs from fiscal years 2014 to 2018.
$9.7 billion
— Total future rent obligations on the City’s existing leases.
$829 million
— Amount of City spending on leased space overseen by DCAS in fiscal year 2018.
$1 million
— Budget savings realized by DCAS in fiscal year 2019.
$2.5 million
— Avoided costs realized by DCAS in fiscal year 2019.
CBC Vice President Maria Doulis says MTA managers, riders, and drivers will all be making sacrifices through job cuts, fare hikes, and congestion pricing, so it’s only fair labor contributes as well: “The MTA’s demands reflect the fact that more needs to be done with the workforce in order to…
The Metropolitan Transportation Authority faces a bleak fiscal outlook with projected cumulative cash deficits reaching $740 million by 2023, driven by reliance on optimistic savings estimates from its Transformation Plan and Budget Reduction Program. To stabilize finances, the Authority must detail these efficiency plans, ensure they do not degrade service quality, and pursue zero-cost wage settlements while preparing for potential economic downturns.
Recommendations related to Efficiency Savings
The MTA should focus on developing and detailing the Transformation Plan, realistically assessing its savings potential and pursuing the changes on which it depends.
The MTA should focus on specifying the elements of the Budget Reduction Program and integrating them with the Transformation Plan without causing a negative impact on service.
The MTA should seek zero-cost wage settlements in current collective bargaining to help stabilize finances.
The MTA should carefully consider its implementation of budget reduction measures that will have a negative impact on service.
The MTA should monitor economic developments to adjust as needed to potential downturns.
Key Data
$740 million
— The cumulative cash deficit projected for the MTA in 2023.
$538 million
— The annual savings the MTA financial plan counts on from the Transformation Plan in 2023.
$376 million
— The savings from the Budget Reduction Program projected for 2023.
$1.7 billion
— The estimated loss of total revenue across a four-year financial plan if a recession similar to the average of three previous recessions occurs.
$251 million
— The portion of 2023 Budget Reduction Program savings planned in mass transit operations.
$82 million
— The portion of 2023 Budget Reduction Program savings planned in commuter railroads.
New York City's reliance on expensive new school construction to address crowding is inefficient, as alternative strategies like rezoning, repurposing existing space, and enforcing enrollment caps could achieve similar results at a lower cost. Implementing these strategies could reduce the need for new capital investment by approximately $2.4 billion, allowing funds to be redirected toward improving existing facilities or instructional quality.
Recommendations related to Efficiency Savings
New school construction should be used only when alternative strategies are inadequate.
A more flexible system of overlapping or grouped zones could more effectively balance enrollment between nearby crowded and non-crowded elementary school buildings.
Capping enrollment at levels consistent with the DOE capacity standards could fully eliminate crowding at high schools.
Administrative space potentially could be consolidated in buildings with multiple schools to create more classroom capacity.
Office activities could be moved to other office space rather than school buildings to free up space for classrooms.
Key Data
$2.4 billion
— Potential reduction in capital spending by substituting alternative strategies for planned new construction.
$150 million
— Annual debt service savings for New York City and State from reduced capital spending.
95,984
— Number of seats fewer than required in the city's 618 crowded school buildings.
$121,270
— Average cost per new seat in the proposed 2020-2024 capital plan.
16,000
— Estimated additional capacity from more flexible elementary school zoning.
2,217
— Seats that could be used to reduce middle school crowding by utilizing non-crowded buildings.
New York City's spending obligations in fiscal year 2019 exceeded revenues by $255 million due to the practice of prepaying future expenses, a trend that is unsustainable given accelerating expenditure growth. City leadership must identify further opportunities to restrain spending and improve productivity to ensure essential services remain protected.
Recommendations related to Efficiency Savings
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 net difference between spending obligations and revenues collected in fiscal year 2019.
5.7 percent
— The rate at which City-funded expenditures grew in fiscal year 2019.
333,433
— The number of authorized positions projected for the city workforce in 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 by 50 percent while maintaining competitive market incentives to keep costs down. This approach avoids the risks associated with exclusive zones, such as potential service failures and higher costs, by ensuring multiple carters compete for business.
Recommendations related to Efficiency Savings
The City should implement a non-exclusive commercial waste zone model to maintain competitive incentives for cost reduction and service quality.
The City's request for proposals should include detailed performance metrics to be tracked for the commercial waste zone program.
The City should ensure that performance metrics are made publicly available to allow for a robust evaluation of the program.
Key Data
50%
— Reduction in vehicle miles traveled (VMT) when moving from the current system to a zone model.
58%
— Overall VMT reduction provided by exclusive zones.
86%
— Percentage of potential VMT reduction achievable through non-exclusive zones.
3 to 5
— Number of carters proposed to serve each of the 20 zones in a non-exclusive model.
20
— Number of zones proposed to be established.
8
— Percentage points difference in VMT reduction between exclusive and non-exclusive models.
The Fiscal Year 2020 Adopted Budget agreement increases city spending and reserves, but prioritizes service expansion over placing the majority of new resources into reserve. While the budget includes $329 million in new savings and $45 million in creditworthy reductions, the city should have further bolstered its fiscal standing to prepare for future economic downturns.
Recommendations related to Efficiency Savings
The City should place the vast majority of new resources in reserve rather than dedicating them to service expansion and new spending initiatives.
The Mayor and City Council Speaker should bolster the City’s fiscal standing while the economy continues to thrive in order to protect New Yorkers when the rainy day arrives.
Key Data
$329 million
— New savings included in the Fiscal Year 2020 Adopted Budget agreement.
$45 million
— Creditworthy savings achieved through headcount and Thrive NYC reductions.
$150 million
— Increase to the City's general reserve in the budget agreement.
$100 million
— Increase to the Retiree Health Benefits Trust (RHBT) in the budget agreement.
New York City should prioritize bolstering its financial reserves and offsetting any new spending with equivalent savings to prepare for potential economic downturns. By eliminating remaining full-time vacancies, reducing the city's vehicle fleet, centralizing procurement, and consolidating union welfare funds, the city can achieve necessary efficiencies without cutting public services.
Recommendations related to Efficiency Savings
The city should add all newly identified money to the city’s reserves and offset any added spending with dollar-for-dollar reductions.
The administration should wipe out more of the 4,700 full-time vacancies still remaining in the budget.
The city should pursue a more extensive fleet reduction to save more than the $20 million identified in fiscal year 2020.
The city should centralize procurement to identify $80 million in savings.
The city should consolidate and centralize union welfare funds to identify $160 million in savings.
Key Data
$500 million
— Projected yield from the administration's first mandatory savings program in fiscal year 2020.
$474 million
— Amount by which personal income tax revenues exceeded expectations through the end of April.
$317 million
— Average amount freed up between the executive budget and the adopted spending plan due to spending underestimates over the last three years.
$80 million
— Potential savings identified by centralizing procurement.
$160 million
— Potential savings identified by consolidating and centralizing union welfare funds.
$20 million
— Savings identified in fiscal year 2020 from a more extensive fleet reduction.
The Metropolitan Transportation Authority faces a dire fiscal outlook with projected annual cash deficits reaching $976 million by 2022, necessitating labor contract reforms to control operating costs. By conditioning wage increases on offsetting savings from productivity improvements and increased employee contributions to health insurance, the authority could achieve significant fiscal stability.
Recommendations related to Efficiency Savings
The MTA should revise the assumption that all represented workers will receive 2 percent wage increases annually and instead condition any pay increases on generating offsetting savings.
The MTA should increase employee health care contributions of represented workers to levels similar to the nonrepresented workforce to defray a significant share of the authority’s $1.4 billion health and welfare expense.
MTA management and labor should set productivity goals and collaboratively develop an agenda of collective bargaining changes that would allow both sides to achieve these goals.
New collective bargaining agreements could reduce 'penalty payments' made to bus operators scheduled to work across both morning and evening peak periods.
Allowing management to schedule split runs for subway train operators and conductors would allow for more efficient scheduling of those workers.
Key Data
$976 million
— Projected annual cash deficit for the Metropolitan Transportation Authority in 2022.
$72 million
— Estimated savings in 2019 from agreements conditioning wage increases on offsetting savings.
$496 million
— Potential annual savings from increasing subway maintenance productivity to the median for selected U.S. systems.
$444 million
— Estimated annual savings if the MTA's total bus productivity matched the median of selected U.S. systems.
$86 million
— Potential savings if the Long Island Rail Road could match the total productivity of Metro-North.
The implementation of a Program to Eliminate the Gap (PEG) aims to generate $750 million in annual savings, a necessary step to prepare for potential economic downturns that could significantly widen budget gaps. To maximize effectiveness, the city should prioritize recurring efficiency improvements over one-time re-estimates and empower agencies to identify operational optimizations.
Recommendations related to Efficiency Savings
The Office of Management and Budget should set agency targets that generate savings in excess of the $750 million annual goal to facilitate mayoral priority setting and better position the City to identify additional savings.
Savings from the Program to Eliminate the Gap should be derived exclusively from agencies and focus on increasing efficiency in operations and service delivery to minimize negative impacts on the public.
The City should continue to seek savings from re-estimates and debt service in tandem with efficiency initiatives, provided these are above and beyond the $750 million recurring target.
Agency executives, managers, and front line staff should take the lead on identifying savings to optimize programs, services, and operations.
The City should reevaluate existing fees to ensure they are keeping pace with rising costs for relevant services without reaching economically counterproductive levels.
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
— Efficiency initiatives as a share of the City funds budget during the fiscal years 2016 through 2019.
$750 million
— The Mayor’s stated annual target for the Program to Eliminate the Gap.
1 percent
— The Mayor’s stated annual PEG target as a share of the City funds budget.
$10 to $12 billion
— Potential annual out-year budget gaps if a recession occurs.
The MTA's 10-Point Plan addresses critical financial needs through congestion pricing and fare increases while emphasizing the necessity of cost containment and management improvements. To ensure fiscal responsibility, new revenue sources should be integrated into the standard budget process rather than statutorily earmarked, and the Regional Transportation Committee must facilitate, rather than obstruct, capital program and fare approvals.
Recommendations related to Efficiency Savings
Critical to those efforts will be the participation of labor and increased productivity by all segments of the workforce.
The Regional Transportation Committee should not become an obstacle to timely approval of the capital program or fare increases.
Clarification is needed on the Regional Transportation Committee’s role in reviewing the capital program and toll and fare increases required to fund it.
New internet sales taxes and excise taxes on marijuana should be allocated in the budget process and not 'earmarked' in statute.
New York City's complex and outdated procurement process, which involved $20 billion in spending in fiscal year 2018, suffers from inefficiencies that limit competition and increase costs. Implementing reforms such as centralizing purchasing, modernizing e-procurement systems, and streamlining capital project approvals could improve service delivery and generate significant taxpayer savings.
Recommendations related to Efficiency Savings
The City should continue to improve e-procurement systems, including e-invoicing and payment, to facilitate more efficient processes.
The City should centralize more procurement under the Department of Citywide Administrative Services, which could 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 to permit best value awards, design-build authority, and the elimination of the Wicks Law.
Key Data
$20 Billion
— Total amount NYC spent on goods and services in fiscal year 2018.
179 days
— Median cycle time for the City's procurement process in fiscal year 2018.
$80 million
— Potential annual savings from centralizing more procurement under the Department of Citywide Administrative Services.
42 percent
— Portion of City contracts that were initial competitive bids.
32 percent
— Portion of City contracts that were partially or entirely non-competitive.
86 percent
— Portion of City contracts that were $100,000 or less.
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 preliminary budget for fiscal year 2020 projects a 3.4 percent increase in city-funded spending, despite a lack of significant new revenue growth. To prepare for potential economic downturns, the city must prioritize recurring savings through operational efficiencies and limit spending growth to inflation.
Recommendations related to Efficiency Savings
Greater recurring savings from making government more efficient are needed to bolster reserves and make certain that the City can provide critical services to New Yorkers in both good times and bad.
Spending growth should be limited to inflation and reserves should be increased.
The Program to Eliminate the Gap (PEG) announced today should be developed with an eye to making operations more efficient and generating recurring savings.
Key Data
3.4 percent
— City-funded spending growth is projected to increase in fiscal year 2020.
$104.1 billion
— The Preliminary Ten-Year Capital Strategy for Fiscal Years 2020 to 2029 totals this amount.
8.7 percent
— The increase in the Preliminary Ten-Year Capital Strategy for Fiscal Years 2020 to 2029 over the prior ten-year strategy.
New York City's budget growth has outpaced inflation, necessitating a more rigorous approach to efficiency savings to fund new initiatives and prepare for potential economic downturns. The city should implement a savings program that generates recurring operational efficiencies equal to at least 1 percent of city-funded spending, rather than relying on routine financial management actions.
Recommendations related to Efficiency Savings
The Citywide Savings Program should generate recurring operational savings to fund fully any new or expanded programs and should be equal to at least 1 percent of City-funded spending.
The City should support NYC Health + Hospitals' aggressive turnaround plan while ensuring it is implemented in a fiscally sustainable and responsible manner, with spending increases offset by efficiency savings and new revenues.
No additional headcount should be authorized; improved productivity of existing personnel should accommodate new needs and initiatives.
Key Data
14 percent
— Efficiency measures comprise 14 percent of the cumulative savings since May 2015.
83 percent
— Savings totaling 83 percent result from routine and important actions that the City takes as part of managing its finances.
1 percent
— The Citywide Savings Program should be equal to at least 1 percent of City-funded spending.
$700 million
— Generating savings equal to 1 percent of City-funded spending would produce about $700 million per year.
0.2 percent
— Previous efficiency savings efforts have not exceeded 0.2 percent of City-funded spending.
The 2019 Charter Revision Commission should prioritize structural reforms that simplify the city's governing document by removing obsolete provisions and overly detailed operational requirements. Focusing on these updates rather than policy-specific additions will improve government efficiency, transparency, and accountability while reducing the need for constant legislative revision.
Recommendations related to Efficiency Savings
The Commission should broaden its mandate to consider not just additions or amendments to the current Charter, but also simplifications and updates that eliminate obsolete provisions and the need for constant legislative revision.
The Commission should have as a goal to clear out the clutter within the 300-plus page Charter, which contains overly detailed provisions about operations and the duties and responsibilities of City agencies and elected officials.
The Commission should pursue Charter revisions that simplify and update the document, as striking unnecessary and out-of-date provisions would result in a Charter with greater integrity and clarity.
Key Data
300-plus
— The number of pages in the Charter, which contains overly detailed provisions about operations and the duties and responsibilities of City agencies and elected officials.
$100
— The specific dollar cap on fines that can be levied for refusal to allow a building inspector entry to a building.
$10,000
— The specific dollar cap on fines that can be levied for violations of private sewage disposal systems.
New York City's emergency medical services system suffers from significant inefficiencies, including excessive reliance on fire engines for medical calls and a high volume of non-emergency requests that strain resources. Implementing reforms such as reducing unnecessary 911 calls, optimizing ambulance staffing models, and scaling back fire engine responses to medical incidents could improve service quality while generating substantial taxpayer savings.
Recommendations related to Efficiency Savings
Build on the experience of other cities to develop programs to reduce residents’ unnecessary or inappropriate requests for an ambulance.
Increase the number of and more efficiently staff the ambulances which are best able to respond to the life threatening incidents (known as Advanced Life Support or ALS ambulances) so they can arrive at relevant incidents more promptly.
Dramatically reduce the role of fire engines in responding to medical incidents; they should be dispatched to these incidents only when it is likely the engine will arrive before an ambulance and the fire engine’s staff’s presence will result in quicker, appropriate medical treatment.
Reversing REMSCO’s policy that New York City ALS ambulances must have two paramedics would allow the City to assign one paramedic and one EMT, as is the practice in the rest of the state.
The City should conduct a thorough assessment of the location, coverage, and workload of fire companies to identify where companies could safely close without jeopardizing response times to any type of emergency.
Key Data
$58.5 million
— Estimated annual savings from a 10 percent reduction in unnecessary or inappropriate ambulance requests.
$1.1 billion
— Total annual spending by the City of New York on emergency medical services.
$7.2 million
— Annual cost to operate one fire engine company, which could be reallocated to higher priority services.
$1,970
— Estimated average cost of a fire engine response to a medical incident in 2017.
$486
— Average cost of an ambulance run in 2017.
$335
— Unit cost of an ambulance run after factoring in reimbursements.
The New York City Housing Authority's plan to expand its Permanent Affordability Commitment Together initiative by 62,000 units is a positive step toward addressing a $32 billion capital shortfall. To further stabilize the system, the authority must leverage private funding through programs like the Rental Assistance Demonstration while pursuing operational improvements and revenue generation.
Recommendations related to Efficiency Savings
NYCHA should take full advantage of public-private partnerships through PACT, including the Rental Assistance Demonstration (RAD) program, as part of a comprehensive strategy for addressing its $32 billion capital need.
Elected officials and labor leaders should take additional action to give NYCHA the resources and flexibility it needs to stabilize the system.
NYCHA's management must continue to pursue every opportunity to raise revenue and improve operations.
Key Data
62,000
— Number of units NYCHA proposes to add to its Permanent Affordability Commitment Together (PACT) initiative.
$32 billion
— Total capital need of the New York City Housing Authority.
Implementing commercial waste zones in New York City will rationalize collection routes, leading to an estimated reduction of 18 million miles of truck traffic annually. This transition aims to improve operational efficiency and environmental outcomes while maintaining market competition for the 3.5 million tons of waste generated by businesses each year.
Recommendations related to Efficiency Savings
The City should implement the Commercial Waste Zone program to increase collection efficiency by rationalizing routes and reducing the number of carters per zone.
The City should utilize competitive procurement to mandate and enforce safety measures, environmental standards, and collection services through contracts rather than relying solely on licensure.
The City should proceed with the proposed zone system to reduce the externalities of commercial waste collection, such as road wear and tear, emissions, and noise pollution.
The City should maintain competition by capping the number of zones in which any one carter can operate to prevent a monopoly.
Key Data
18 million
— Reduction of 18 million miles of truck traffic resulting from the new commercial waste zone routes.
3.5 million
— Total tons of waste generated per year by the 108,000 customers served by licensed commercial carters.
38 percent
— The amount more that the average small business pays for waste collection compared to the average large business.
90
— Number of licensed commercial carters currently operating in New York City.
$20.76
— Current ceiling price per cubic yard set by the Business Integrity Commission for commercial waste collection.
108,000
— Number of customers currently served by licensed commercial carters in New York City.
New York City's organic waste collection program currently suffers from low participation rates, resulting in collection costs exceeding $1,700 per ton compared to significantly lower costs for refuse and recycling. To improve program efficiency and reduce landfill waste, the city must increase resident participation and explore alternative collection methods while addressing the lack of local processing capacity.
Recommendations related to Efficiency Savings
The Department of Sanitation should boost resident participation with curbside collection to increase tonnage and reduce the collection cost per ton.
The city should adopt alternative methods of collection to lower the high per-ton collection cost.
The Department of Sanitation should experiment with alternative collection schedules or modes to fine-tune the program.
The Department of Sanitation should provide more detailed data on tonnage, participation, collection modes, costs, and collection efficiency to allow for better program assessment.
Key Data
$1,700 per ton
— The cost of Organics collection.
$291 per ton
— The cost of refuse collection.
$686 per ton
— The cost of recycling collection.
123 tons per day
— Current curbside collection of organics.
19 tons per day
— Curbside collection of organics in 2014.
3.4 percent
— Percentage of total citywide organic tonnage represented by curbside collection.
The Metropolitan Transportation Authority faces growing financial pressure as expense growth of 10.4 percent outpaces revenue growth of 9.9 percent, leading to projected cash deficits reaching $634 million by 2022. These fiscal challenges are compounded by declining ridership, which has reduced fare revenue estimates by $550 million, and the need to fund agency action plans costing hundreds of millions of dollars.
Key Data
$634 million
— Projected cash deficit for the Metropolitan Transportation Authority in 2022.
$836 million
— Cost of the Subway Action Plan to be implemented by the Metropolitan Transportation Authority.
$550 million
— Reduction in fare revenue estimates over the 2018 to 2021 period due to declining ridership.
10.4 percent
— Overall expense growth rate for the Metropolitan Transportation Authority in the first half of the plan period.
9.9 percent
— Overall revenue growth rate for the Metropolitan Transportation Authority in the first half of the plan period.
4 percent
— Planned fare and toll increases for 2019 and 2021 assumed in the financial plan.
Uniformed overtime costs at the Fire Department and Department of Correction continue to exceed budget caps despite increased staffing levels, necessitating structural reforms to labor contracts. Addressing high absenteeism rates and renegotiating work rules are essential steps to curbing these significant expenditures and achieving long-term fiscal efficiency.
Recommendations related to Efficiency Savings
Labor and management must come to the table to develop better strategies to control these costs.
The high rate of absenteeism is a contributing factor that 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 amount earned by uniformed employees in overtime in fiscal year 2016.
$59 million
— The amount by which the City increased the FDNY and DOC uniformed overtime budgets for fiscal year 2018.
$272 million
— Uniformed overtime spending at the FDNY in fiscal year 2017.
$240 million
— Uniformed overtime spending at the DOC in fiscal year 2017.
7 percent
— The absence rate for the FDNY in the first four months of 2018.
The FY2019 budget features significant spending growth and a ballooning capital plan that outpaces reserves and long-term liability funding. To manage fiscal risks, the city should implement workforce growth caps, require agencies to identify recurring efficiency savings, and prioritize pay-as-you-go capital investments.
Recommendations related to Efficiency Savings
Agencies should be required to find recurring efficiency savings equal to 1 percent of their City-funded spending.
The City should fund new initiatives with commensurate savings in other program areas.
Raises in excess of the 1 percent per year the City has set aside must be funded through concessions or productivity increases.
The City must halt the growth of the workforce, which has already grown by more than 33,000 positions.
The Capital Plan should be reduced and refocused on strategic priorities that emphasize state of good repair and maximize the return on investment for new projects.
Using current resources as “pay-go capital,” instead of borrowing, would allow the City to invest in its infrastructure without increasing long-term liabilities.
Key Data
1 percent
— The target for recurring efficiency savings that agencies should be required to find relative to their City-funded spending.
33,000 positions
— The amount the City workforce has already grown, necessitating a halt to further expansion.
7,000 employees
— The number of additional positions the City workforce is projected to expand by.
1 percent
— The annual raise cap set aside by the City for labor negotiations, which must be funded through concessions or productivity increases if exceeded.
$65 billion
— The projected cost of the four-year capital plan for fiscal years 2019 to 2022.
Efficiency savings account for only 0.2% of total proposed spending over the five-year period, with Mayor de Blasio's plans relying heavily on re-estimates and funding shifts rather than operational improvements. To achieve lasting fiscal benefits, the city must set more ambitious goals for the effective use of resources.
Recommendations related to Efficiency Savings
The city must set more ambitious goals for efficiency savings.
Mayor de Blasio must set higher goals for more effective use of city resources to achieve lasting savings in city operations.
The city should prioritize getting more efficient to generate lasting budget savings that increase in size over time.
Key Data
$4,670 million
— Total savings in the Fiscal Year 2019 Citywide Savings Program.
$771 million
— Efficiency savings in the Fiscal Year 2019 Citywide Savings Program.
0.2%
— Efficiency savings as a percentage of total spending proposed during the five-year period.
16%
— Efficiency savings share of total savings under Mayor de Blasio.
20%
— Efficiency savings share of total savings under Mayor Bloomberg.
New York City's executive budget for fiscal year 2019 proposes $90.8 billion in spending, with city-funded expenditures growing 5.8%—more than twice the rate of inflation—while agency efficiency savings remain negligible at less than 0.1% of spending. To improve long-term fiscal health, the City Council should scrutinize new spending proposals, limit its own agenda to high-return investments, and prioritize using surplus revenues to reduce long-term liabilities like retiree health benefits and debt.
Recommendations related to Efficiency Savings
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 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.
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
0.1%
— The total amount of agency efficiencies found, which is less than 0.1% of city-funded spending.
$90.8 billion
— The total spending proposed in the fiscal year 2019 executive budget.
5.8%
— The growth rate of city-funded expenditures between fiscal years 2018 and 2019.
$90 billion
— The city's obligation for the health benefits of public retirees.
$76 billion
— The amount of debt repaid by city tax dollars expected next year.
$1.25 billion
— The annual total of city budget reserves.
New York's Health Home initiative, designed to coordinate care for Medicaid enrollees with complex needs, has struggled to meet enrollment targets and demonstrate consistent cost-effectiveness. To improve the program's efficiency, the state should better target priority subpopulations, refine payment structures to incentivize self-management, and enhance data interoperability between health systems.
Recommendations related to Efficiency Savings
The state should implement better targeting of priority subpopulations to ensure resources are directed toward those who will receive the greatest benefits and cost savings.
New York should foster greater reliance on specialized HH entities by leveraging existing relationships with specialized providers like community health centers.
The state should pursue stronger ties between MCOs and HHs to facilitate better information sharing and mutual accountability.
Policymakers should consider alternative payment rates that include reduced payments for adults who have reached a duration of enrollment where greater self-management is practical.
The state should support the centralized development of marketing and training materials to improve consistency and economies of scale across the decentralized HH network.
New York should launch new initiatives to encourage and speed interoperability of electronic health records between HHs, MCOs, and providers to improve care coordination.
Key Data
$558 million
— Annual spending on Health Homes in 2017.
$157 million
— Amount spent on outreach in 2017, representing 28% of total spending.
$543 million
— Cumulative spending on outreach from 2012 to 2017.
$2.181 billion
— Cumulative spending on Health Homes from 2012 to 2017.
$944
— Average monthly savings per beneficiary at the Maimonides Medical Center Health Home demonstration project.
$72 billion
— Annual cost of New York State's Medicaid program.
New York City's Fiscal Year 2019 Executive Budget increases operating spending at more than twice the rate of inflation while failing to prioritize meaningful agency savings in its Citywide Savings Program. Additionally, the city's five-year capital commitment plan has grown to approximately $82 billion, necessitating greater scrutiny and reform of capital planning and budgeting processes.
Recommendations related to Efficiency Savings
Additions to the capital plan should be treated with the same caution and scrutiny as those to the operating budget.
Reforms to the city’s capital planning and budgeting processes should be part of the approval process for the capital commitment plan.
Key Data
5.8 percent
— Projected growth of City-funded spending in the Fiscal Year 2019 Executive Budget.
$82 billion
— Total size 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 labor productivity targets remaining unmet. Implementing operational efficiencies, such as optimizing labor contracts, expanding automated collection, and utilizing in-sink disposers, could generate substantial annual savings and improve the fiscal sustainability of the city's zero-waste goals.
Recommendations related to Efficiency Savings
The City should seek productivity gains in waste collection by 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.
The City should implement recommendations from the 2014 report 'Getting the Fiscal Waste Out of Solid Waste Collection in New York City' to meet productivity targets.
The City should pursue collective bargaining changes to increase flexibility and productivity and end certain differentials and bonuses.
The City should expand the use of large containers and automated trucks to improve collection efficiency.
The City should end bonuses for meeting productivity targets and dumping on shift, as they are more a function of the neighborhood and housing density than employee productivity.
The City should prioritize fiscal considerations for organics expansion and halt expansion until participation can be increased in existing districts.
The City should advocate for the use of in-sink disposers to 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, compared to $291 to collect a ton of refuse.
$20 million
— Estimated additional cost for collection and disposal if households sorted 55 percent of recyclables.
$120 million
— Potential annual savings from meeting productivity targets in waste collection.
$105 million
— Net reduction in costs achievable by increasing recycling capture rates to 55 percent and meeting productivity targets.
$40 million
— Estimated cost of collecting 13,000 tons of organics.
$4 million
— Estimated savings from a pilot program using in-sink disposers in four districts.
The School Bus Grant Program, which provides salary and benefit support to firms without employee protections, should be rejected because it circumvents competitive bidding and increases taxpayer costs. Instead, the city should rebid pupil transportation contracts to foster competition, install GPS, and eliminate unnecessary subsidies to achieve greater efficiency.
Recommendations related to Efficiency Savings
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 be called upon to find savings in pupil transportation, which will cost $1.1 billion in fiscal year 2018.
All new school bus contracts should be awarded with an eye toward realizing savings in the costs of pupil transportation, which have now grown to more than $1.2 billion annually.
Pupil transportation contracts should be rebid with the goal of generating savings to offset the increased costs incurred from the restoration of employee protections for seniority and pay.
The City should foster competition, increase use of technology, and improve efficiency by eliminating certain subsidies, installing GPS, and extending daily service periods.
Key Data
$42 million
— Proposed spending in fiscal year 2018 to extend the School Bus Grant Program for a fourth year.
$1.1 billion
— Cost of pupil transportation in fiscal year 2018.
$1.2 billion
— Annual cost of pupil transportation.
$400 million
— Savings achieved by rebidding contracts without employee protections for seniority and pay.
$28 million
— Cost of the School Bus Grant Program in fiscal year 2015, its first year.
$136 million
— Total four-year cost of the School Bus Grant Program through fiscal year 2018.
New York City agencies have participated in preliminary budget savings programs, known as PEGs, across fiscal years 2012 through 2019. This participation tracks the implementation of efficiency measures across various municipal departments under both the Bloomberg and de Blasio administrations.
New York City utilizes Programs to Eliminate the Gap and Citywide Savings Programs as mechanisms to manage budget gaps and identify fiscal efficiencies. Historical data regarding the size of these proposed savings programs in preliminary budgets dates back to 1982.
Increasing the Authorities Budget Office's annual funding to $3.105 million would allow the agency to properly oversee 578 state and local authorities that collectively spend $51 billion annually. This investment would enable the office to fulfill its statutory duties, preventing wasteful spending and corruption within these public entities.
Recommendations related to Efficiency Savings
The state should increase funding for the Authorities Budget Office to $3.105 million to ensure it can adequately fulfill its statutory duties.
The state should provide additional resources to the Authorities Budget Office to allow it to conduct more investigations and reviews of public authorities.
The state should increase the budget to allow the Authorities Budget Office to modernize the Public Authorities Reporting and Information System (PARIS) database to ensure accurate reporting.
The state should provide funding to enable the Authorities Budget Office to fully monitor authorities’ compliance with ethics, procurement, and transparency laws.
The state should increase the budget to allow the Authorities Budget Office to make recommendations to the Governor and Legislature regarding debt limits and board member compensation.
Key Data
$3.105 million
— The recommended annual funding allocation for the Authorities Budget Office.
$51 billion
— The amount collectively spent annually by the 578 state and local authorities overseen by the Authorities Budget Office.
$270 billion
— The total amount of public debt held by the authorities overseen by the Authorities Budget Office.
11
— The number of full-time employees currently staffing the Authorities Budget Office.
40 percent
— The current staffing level of the Authorities Budget Office compared to the level envisioned when it was reestablished in 2010.
$4 billion
— The current state deficit that the state is facing.
New York City's Fiscal Year 2019 preliminary budget relies heavily on debt service savings and reimbursements rather than structural government efficiencies to balance the books. To achieve long-term fiscal stability, the city must prioritize limiting spending growth, bolstering the savings plan, and reforming the capital plan through right-sizing and right-timing.
Recommendations related to Efficiency Savings
The Mayor should bolster the savings plan by focusing on making government more efficient rather than relying on dwindling debt service savings and State and federal reimbursement.
The City should reform the capital plan through 'right-sizing' and 'right-timing' to adapt to a resource-constrained environment.
The City should contain spending growth to attain fiscal stability.
The City should build reserves to ensure fiscal stability.
The City should strengthen finances at the New York City Housing Authority (NYCHA) and NYC Health+Hospitals (H+H).
New York City's waste management system remains inefficient and expensive, with current organics collection programs suffering from low participation and high costs per ton. To improve fiscal responsibility and operational efficiency, the city should implement cost-saving measures like route redesigns, automated trucks, and the elimination of unproductive labor bonuses.
Recommendations related to Efficiency Savings
The city should implement a slower rollout of the organics program, limiting it to districts expected to generate sufficient tonnage to avoid requiring additional collection days.
The city should utilize in-sink disposers in select districts to divert organic waste from landfills without requiring curbside collection.
The city should allow greater flexibility in the frequency of collection, scheduling, and recycling practices, including the implementation of redesigned routes.
The city should expand the use of large containers and automated trucks to improve collection efficiency.
The city should eliminate “unproductive” productivity bonuses for tons collected per truck shift and for dumping on shift, which are based on assigned routes rather than actual worker productivity.
Key Data
$640 per ton
— The cost to collect recyclable material per truck shift.
$282 per ton
— The cost to collect refuse per truck shift.
$3,000
— The estimated cost of a single truck run for refuse and recycling.
0.8 percent
— The amount of all refuse collected at the curb that consisted of organics in fiscal year 2017.
17 percent
— The current recycling diversion rate, representing the share of curbside waste that is recycled.
The Metropolitan Transportation Authority should prioritize internal efficiencies, such as altering night shift differentials and implementing split shifts, to ensure the financial sustainability of its stabilization plan. Rather than relying on increased taxpayer subsidies, the agency should reallocate existing uncommitted capital funds and pursue productivity savings through cooperative agreements with its workforce.
Recommendations related to Efficiency Savings
The MTA and its workforce should more aggressively pursue efficiencies at the agency to make the stabilization plan self-sustaining.
A cooperative arrangement between MTA management and the Transport Workers Union could provide significant productivity savings to help cover the cost of the added workers.
The MTA should implement potential savings such as altering night shift differentials, which would reduce the cost of maintenance in the expanded Fasttrack program.
The MTA should utilize "split shifts" for operators and conductors to reduce subway operating costs.
Uncommitted funds and funds in the current 2015-2019 capital program should be re-tasked to work that can accelerate the process of bringing the subway to a state of good repair.
Key Data
$18 billion
— Amount of authorized capital funds from the 2000 to 2014 period that remains unspent.
$9.2 billion
— Amount of authorized capital funds from the 2000 to 2014 period that remains uncommitted to construction projects.
$456 million
— Amount of recurring operating costs in the MTA Chairman's stabilization plan.
2,700
— Number of permanent new workers the MTA plans to hire.
The MTA's plan to address subway performance issues requires new funding sources beyond just state and city contributions, including contributions from labor unions and motorists. Productivity savings from labor agreements, such as adjusting shift differentials and implementing split shifts, alongside increased revenue from tolls and congestion pricing, are essential to finance these necessary system improvements.
Recommendations related to Efficiency Savings
A cooperative arrangement between MTA management and the TWU could provide significant productivity savings to help cover the cost of the added workers.
MTA management and unions should alter night shift differentials to reduce the cost of maintenance in the expanded Fasttrack program.
The MTA should utilize split shifts for operators and conductors to reduce subway operating costs.
Key Data
$456 million
— Recurring annual operating costs for the MTA's plan to reverse subway performance deterioration.
$380 million
— New capital investments required for the MTA's plan to reverse subway performance deterioration.
74,000
— Total number of people employed by the MTA.
55,000
— Number of MTA employees who operate the subways and buses.
12%
— Portion of the MTA's mass transit system currently funded by tolls.
2,700
— Number of additional workers required to implement the subway performance enhancements.
New York City's fiscal year 2018 budget includes $103 million in savings from a hiring freeze, yet overall spending continues to grow alongside rising headcount and compensation costs. To address these fiscal pressures, the city should prioritize productivity gains to fund raises, increase employee health insurance contributions, and implement broader operational efficiencies to enable tax reductions or transit fare relief.
Recommendations related to Efficiency Savings
Agencies need to step up efforts to make their operations more cost-effective by implementing efficiencies.
Any additional raises should be paid for with productivity gains, which also necessitate settling the contracts promptly.
Health insurance contributions from employees and retirees should be on the table during negotiations.
The next round of labor negotiations should build on the savings generated from the City’s partnership with the Municipal Labor Committee.
The City should limit new spending and achieve more savings, tax reductions, and reserves.
Key Data
$103 million
— Citywide Savings in fiscal year 2018 generated from a one-year hiring freeze.
329,055
— Expected headcount in fiscal year 2018.
$160,000
— Projected average compensation per employee by fiscal year 2021.
$140,000
— Current average compensation per employee.
3.4 percent
— Spending growth over the fiscal year 2017 projected budget.
$87.3 billion
— Adopted Budget for Fiscal Year 2018, adjusted for prepayments and reserves.
New York City's fiscal year 2018 budget includes a $1.5 billion savings program, yet many agencies contribute little to no efficiency savings, highlighting a need for broader participation. If all city agencies achieved efficiencies equal to just 1 percent of their city-funded expenditures, they could generate $378 million in savings, tripling the current program's impact.
Recommendations related to Efficiency Savings
City agencies should review their operations to enhance productivity and reduce expenses.
The city should continue to put substantial effort into reducing expenses to mitigate budget risks from the federal government and a slowing economy.
The city should reinstate mandatory savings requirements for agencies due to limited participation in voluntary programs.
Key Data
$1.5 billion
— Total savings included in the New York City Fiscal Year 2018 Executive Budget's Citywide Savings Program for fiscal year 2017.
$378 million
— Potential savings that could be generated in fiscal year 2018 if all agencies achieved efficiencies worth 1 percent of their city-funded expenditures.
$331 million
— The four-year total savings projected from the 11 initiatives identified by the Office of Management and Budget's Savings Unit.
0.1 percent
— The average efficiency savings of city-funded expenditures across the 10 largest participating agencies.
29,000
— The number of vehicles currently in the city's fleet, which is targeted for optimization.
The Citywide Savings Program aims to generate recurring savings, yet efficiency savings remain meager at less than 0.5 percent of city-funded expenditures. To improve fiscal health, the city should mandate agency participation in savings programs and pursue strategies to reduce labor costs, such as health insurance and overtime expenses.
Recommendations related to Efficiency Savings
The City should find additional efficiency savings and make agency participation in the Citywide Savings Program mandatory.
Each agency Commissioner should be expected to improve efficiency, and the Mayor and City Council should monitor progress.
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 must weigh competing initiatives and fund only those which are essential and/or can be funded by offsetting savings.
Key Data
$1.5 billion
— CSP projected annual savings in fiscal year 2017.
$1.1 billion
— Total savings projected in fiscal year 2021.
$239 million
— Efficiency savings projected in fiscal year 2021.
0.5%
— Efficiency savings as a percentage of city-funded expenditures each year.
$400 million
— Potential annual efficiency savings if 1 percent of city-funded agency budgets were saved.
$1.3 billion
— Expected recurring annual savings from the health care savings initiative.
The School Bus Grant Program undermines competitive bidding by providing unnecessary grants to bus companies, effectively increasing costs for taxpayers without providing additional benefits. The City Council should terminate this program and adhere to the terms of fairly awarded contracts to ensure fiscal responsibility.
Recommendations related to Efficiency Savings
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 should not award grants to increase payments to for-profit companies that have already sought to provide a service for the previously specified amount.
The City Council should bring the School Bus Grant Program to a stop.
Key Data
$1 billion
— Annual cost of school-bus transportation contracts prior to the 2012 re-bidding process.
$400 million
— Savings generated for the city by re-bidding school-bus transportation contracts without previous employee protection provisions.
$30 million
— Projected cost of extending the School Bus Grant Program for a third year.
New York State's $78 billion liability for other post-employment benefits (OPEB) can be reduced by approximately 36 percent through proposals to increase retiree premium-sharing and implement tiered cost-sharing. Adopting these measures alongside a structured plan for regular deposits into a dedicated OPEB trust fund would improve the state's long-term fiscal stability and align retiree health insurance with pension funding practices.
Recommendations related to Efficiency Savings
The Legislature should adopt the Executive Budget's proposals to increase employee and retiree premium-sharing to generate savings and reduce OPEB liability.
The Legislature should develop a plan to require regular deposits to the OPEB Trust fund to ensure it is not an empty account.
The State should eliminate additional Medicare Part B premium reimbursements for high earners to reduce OPEB liability.
The State should cap the State’s share of Part B premium costs at 2015 levels for those enrolled in Medicare prior to January 1, 2016.
The State should create tiered cost-sharing for future retirees based on salary grade, years of service, and type of coverage.
Key Data
$78 billion
— Total OPEB liability for New York State.
$28.2 billion
— Total reduction in OPEB liability from the three proposed actions.
$1.3 billion
— Annual cost of retiree health insurance.
$18.8 million
— Savings in fiscal year 2018 from the three proposals.
$8 million
— Annual savings from eliminating Medicare Part B premium reimbursements for high earners.
$450 million
— Reduction in OPEB liability from eliminating Medicare Part B premium reimbursements.
The Metropolitan Transportation Authority's February 2017 financial plan update reveals a worsening fiscal outlook driven by increased labor costs and reduced state subsidies, which are only partially offset by one-time insurance recoveries and ongoing efficiency targets. To avoid significant future deficits, the agency should consider establishing a 1 percent annual general reserve, which could generate $650 million over the plan period.
Recommendations related to Efficiency Savings
The MTA should establish a 1 percent annual general reserve, which could provide $650 million over the plan period if not utilized.
The agency must implement new policy actions to avoid serious financial deficits, as current reliance on unspecified efficiencies and one-time revenue sources is insufficient.
Key Data
$25 million
— The amount the MTA expects to reduce operating expenses by in 2017 through unspecified efficiencies.
$50 million
— The amount the MTA expects to reduce operating expenses by in each year from 2018 to 2020 through unspecified efficiencies.
$175 million
— The total favorable impact of the MTA's planned efficiency savings over the financial plan period.
$2 billion
— The total annual savings generated by the MTA's efficiency targets since the process began in 2010.
$650 million
— The potential funds available over the plan period if the MTA implemented a 1 percent annual general reserve.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
The Citywide Savings Program relies heavily on debt service savings and re-estimates rather than actual operational improvements, with efficiency savings accounting for less than 10 percent of the total $3.8 billion identified. To better manage budget risks, the administration should require city agencies to identify specific efficiency improvements to generate the promised $500 million in additional savings.
Recommendations related to Efficiency Savings
To serve as a meaningful hedge against budget risks, all of the $500 million in additional savings should come from improving government productivity in ways that generate recurring savings.
City agencies should be required to identify efficiency improvements to generate the next $500 million in savings promised by the Administration.
The creation of a Savings Unit should not absolve city agencies of responsibility for initiating their own efforts to operate more efficiently.
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 percent
— Portion of the total identified savings that comes from improving the efficiency of government operations.
$500 million
— Additional savings the Office of Management and Budget has committed to finding for the Executive Budget.
$366 million
— Total efficiency savings identified in the Citywide Savings Program.
10 percent
— Share of the total Citywide Savings Program comprised of efficiency savings.
$47 million
— Recurring savings identified by the new Savings Unit to be achieved by fiscal year 2020.
The New York City Department of Small Business Services' program providing supplemental grants to school bus transportation companies undermines the integrity of the competitive bidding process by paying for no additional services. Discontinuing this program is necessary to prevent the establishment of these payments as a permanent entitlement rather than a temporary bridge to cost-effective contracts.
Recommendations related to Efficiency Savings
The administration should discontinue the program providing supplemental grants to school bus contractors.
New York City's fiscal year 2018 budget reaches a record $87.1 billion, reflecting a 17% increase from the previous administration's final budget. While the city pursues various policy initiatives, only 18% of the Citywide Savings Plan consists of efficiency measures, necessitating a greater focus on managing agency expenditure growth.
Recommendations related to Efficiency Savings
The upcoming deliberations with the City Council should focus on how to better manage agencies with significant expenditure growth.
More should be done to better manage a range of municipal services.
Key Data
$87.1 billion
— Total spending in the fiscal year 2018 budget.
17%
— Increase in the fiscal year 2018 budget from Mayor Michael Bloomberg’s last budget.
327,000
— Total municipal employment in fiscal year 2018.
9%
— Increase in municipal employment from January 2014.
18%
— Portion of the Citywide Savings Plan comprised of efficiency measures.
The NYC Preliminary Budget for FY2018 raises questions about whether the city will prioritize recurring savings from increased efficiency over one-time budget maneuvers like debt service savings and funding swaps. It also questions the fiscal sustainability of programs facing significant pressures, such as the homeless shelter system with a census surpassing 60,000 and the New York City Housing Authority with $17 billion in unmet capital needs.
The proposed legislation regarding school bus contracts in New York City would impose costly procurement restrictions and unnecessary tax breaks, undermining the competitive bidding process that previously saved $400 million over five years. To maintain fiscal responsibility and protect taxpayer funds, the state should reject this bill and preserve the flexibility to negotiate contracts efficiently.
Recommendations related to Efficiency Savings
Governor Cuomo should veto A8019C/S5984-C to prevent the imposition of costly restrictions on the procurement of school bus contracts in New York City.
The state should preserve the flexibility to negotiate contracts to ensure savings for future taxpayers.
The state should reject the bill that imposes unnecessary and costly requirements on the City’s procurement process for pupil transportation.
Key Data
$1.4 billion
— Annual expense for pupil transportation in New York City.
$400 million
— Savings achieved over five years by opening school bus contracts to competition.
8.1 percent
— Growth in the Employment Cost Index (ECI) between the end of 2011 and 2015.
4.7 percent
— Growth in the Consumer Price Index (CPI) between the end of 2011 and 2015.
NY1 About 150,000 disabled New Yorkers use the MTA's pricey Access-A-Ride service to get around the city each day. Two new studies are proposing ways to dramatically improve service and save taxpayers more than $100 million a year.
New York City's Access-A-Ride program, while vital for mobility-impaired residents, faces significant fiscal challenges due to high utilization and unit costs that exceed those of other major paratransit systems. To improve efficiency and reduce the reliance on internal cross-subsidies from regular transit riders, the MTA should implement strategies such as shifting ambulatory trips to lower-cost broker car services, increasing the use of feeder service, and adjusting fare structures.
Recommendations related to Efficiency Savings
The MTA could shift ambulatory trips to its broker car service (BCS) program, which uses a for-hire vehicle broker to complete trips using black cars and liveries.
The MTA could provide service more efficiently by offering a subsidy program that allows paratransit users the opportunity to use the City’s taxicab fleet and Transportation Network Companies (TNC) like Uber and Lyft.
By altering its service design and contracting a single, full-service broker, the MTA could consolidate the multiple management layers.
The MTA could discourage excessive use of paratransit by charging a higher fare.
The MTA could offer feeder service, trips that connect users with accessible fixed-route stops rather than door-to-door service, in a greater number of appropriate situations.
Key Data
$461 million
— The total cost of the Access-A-Ride program in 2015.
$71
— The cost per trip for Access-A-Ride in 2014, the highest among 29 cities with large paratransit programs.
$126 million
— The potential annual savings from moving all ambulatory customers to the broker car service program.
$184 million
— The potential annual savings from doubling paratransit fares.
$28 million
— The potential annual savings from replacing all current trips originating within the Manhattan taxicab "hail zone."
$30 million
— The potential annual savings from adopting a full-service brokerage system design.
The Bond Buyer Maria Doulis of the watchdog Citizens Budget Commission and Howard Cure of Evercore Wealth Management dissect New York City’s $82 billion budget with Bond Buyer Northeast regional editor Paul Burton. They explore efficiencies, debt management, reserves, the economy, the capital budget and Mayor Bill de Blasio’s plan…
Expanding New York City's residential food waste collection program citywide could cost between $177 million and $250 million annually, significantly outpacing current landfill savings. To improve efficiency, the city should consider utilizing in-sink disposers in suitable neighborhoods and optimizing collection routes to avoid additional trips.
Recommendations related to Efficiency Savings
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.
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.
Achieving such efficiencies would require City Council approval and a significant boost to participation rates.
Key Data
$19 million
— Cost of the residential organic waste pilot program over two years.
$177 million and $250 million
— Estimated annual cost if the curbside organics program were expanded citywide.
88,000
— New truck shifts projected to be needed each year under current collection practices if expanded citywide.
10 percent
— Total NYC residential and commercial organic waste that composting facilities within 150 miles of Manhattan can accommodate.
4.6 percent
— Capacity of facilities outside city limits to process NYC's total food waste.
55 percent
— NYC households currently served by treatment plants with sufficient capacity to deal with food sludge.
Tony Guida sits down with the CBC's Vice President, Maria Doulis, to discuss why New York City's mega-projects run over budget and how the public sector can build better.
The Citywide Savings Program proposes $5.4 billion in multiyear savings, yet only 16 percent of this total stems from actual agency efficiency measures, with the remainder relying on uncertain Medicaid claims, debt service reductions, and spending re-estimates. To improve municipal government, the administration must shift its focus toward strategic initiatives that generate lasting value rather than relying on accounting adjustments.
Recommendations related to Efficiency Savings
The administration should continue to build on the progress in the Citywide Savings Program by focusing more on efficiency initiatives.
The Citywide Savings Program should move beyond baby steps and become bolder strides to make municipal government more efficient.
Agencies should think strategically and creatively about how to provide value to taxpayers and do more with less.
Key Data
$5.4 billion
— Multiyear savings proposed in the latest Citywide Savings Program.
$2.9 billion
— Multiyear savings proposed in the previous year’s Executive Budget.
1.7 percent
— The portion of city-funded spending over the financial plan period represented by the $5.4 billion in savings.
$1.5 billion
— The largest single source of savings, representing 28 percent of the plan, derived from a claim for a reduced payment to the State for the City’s share of the Medicaid program.
$1.0 billion
— Savings derived from reductions in required debt service payments.
$220 million
— Savings attributed to unspecified and uncertain procurement reforms.
The FDNY currently allocates the majority of its resources to firefighting despite medical emergencies accounting for the vast majority of its service calls, creating a costly and redundant operational structure. To improve efficiency, the department should rebalance its staffing and training to better align resources with the actual demand for medical services.
Recommendations related to Efficiency Savings
The FDNY should apply again to NYC-REMSCO to change ALS ambulance staffing to one paramedic and one EMT, as this change would not diminish the quality of care and 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 fundamentally reorganize the department to redefine the relationships between the two services and rebalance the financial and human resources provided for each type of service.
The FDNY should subsidize the training for all current firefighters (about $1,200 per person) to ensure they are trained as EMTs.
Key Data
$3.8 billion
— Total FDNY budget in fiscal year 2015.
$5 million
— Estimated annual savings from changing ALS ambulance staffing to one paramedic and one EMT.
$1,200
— Estimated cost per person to subsidize EMT training for all current firefighters.
$6.8 million
— Estimated average annual cost of operating an engine company in fiscal year 2015.
$8.6 million
— Estimated average annual cost of operating a ladder company in fiscal year 2015.
$519
— Estimated average cost per ALS ambulance response.
New York City's fiscal plan relies heavily on an expanded Citywide Savings Program to address future budget gaps, yet many of these anticipated savings remain speculative and uncertain. The city faces significant financial risks, including the need to secure state cooperation for Medicaid savings and the requirement to stabilize the Health + Hospitals system, which faces deficits growing to $1.8 billion by 2020.
Recommendations related to Efficiency Savings
The city must move quickly to stop the bleeding of cash at Health + Hospitals to keep the budget balanced.
The city needs to secure an agreement with the state regarding Medicaid savings to ensure the Citywide Savings Program is not based on speculative revenue.
The city must identify specific savings initiatives for Health + Hospitals rather than relying on general strategies.
Key Data
$3.4 billion
— Surplus roll from good times available to be used.
$1 billion
— Reserve included in each year of the financial plan.
$1 billion
— Expected spending reduction in fiscal year 2020 from the Citywide Savings Program.
$300 million
— Annual savings dependent on the city convincing the state to share Medicaid savings.
$497 million
— Emergency support provided to the hospital system this fiscal year.
$1.8 billion
— Projected deficits for Health + Hospitals in 2020.
The fiscal year 2017 executive budget includes $1.25 billion in additional savings, though these are largely dependent on re-estimates and Medicaid revenues rather than concrete agency initiatives. While the plan adds $1.2 billion in new agency spending, the reliance on uncertain savings measures puts future budget gaps at risk of increasing.
Key Data
$1.25 billion
— Additional savings included in the fiscal years 2016 and 2017 financial plan.
$1.2 billion
— New agency spending added in fiscal year 2017.
$2.5 billion
— Increase in city-funded spending in fiscal year 2017 compared to fiscal year 2016.
New York State’s Lean Initiative has successfully streamlined government operations by empowering employees to identify waste and improve customer service across nearly 400 projects in 38 agencies. These process improvements have significantly reduced wait times and processing delays for services ranging from vehicle registration to unemployment insurance claims.
Key Data
50 percent
— Average reduction in office wait times at the Department of Motor Vehicles.
400
— Number of Lean projects implemented across 38 State agencies and public authorities.
8,500
— Number of State workers who have participated in Lean workshops.
77 percent
— Reduction in the Department of Labor's backlog of unemployment insurance break in claims requests.
20 days to 4 days
— Reduction in processing times to license real estate brokers and agents by the Department of State.
157 days to 100 days
— Reduction in the median time to process a certificate of need for a new health care facility.
New York City's collective bargaining agreements aimed to achieve $3.4 billion in health care savings between 2015 and 2018, though a significant portion of these savings resulted from lower-than-anticipated premium increases rather than structural reforms. While some initiatives like plan transitions and care management programs successfully reduced recurring costs, further efficiency could be gained by ending city deposits into the Health Insurance Stabilization Fund and establishing regular audit authority.
Recommendations related to Efficiency Savings
The City and the Municipal Labor Committee should gain authority to conduct audits regularly as a matter of managerial discretion to identify savings.
The City and the Municipal Labor Committee should work together to end further deposits by the City into the Health Insurance Stabilization Fund.
The City and the Municipal Labor Committee should continue to pursue reforms that reduce overutilization of health services to achieve recurring savings.
Key Data
$3.4 billion
— Total health care savings target for fiscal years 2015 to 2018.
$477 million
— Anticipated savings from initiatives that reduce healthcare costs on a recurring basis.
$1.1 billion
— Savings claimed from lower-than-projected premium rate increases, representing 52 percent of the total.
$85 million
— Estimated savings in fiscal year 2017 from the transition to the HIP HMO Preferred plan.
$147 million
— Expected savings in fiscal year 2017 from converting the GHI plan to a minimum premium plan.
$1 billion
— Balance retained in the Health Insurance Stabilization Fund despite large withdrawals.
The FDNY faces a shift in demand where medical incidents now comprise 75 percent of its workload, yet funding remains heavily skewed toward fire operations at 56 percent compared to 28 percent for medical services. To improve efficiency and capacity, the department should reallocate resources by modifying ambulance staffing models and requiring EMT certification for firefighters to reduce reliance on ambulance backup.
Recommendations related to Efficiency Savings
Modify Advanced Life Support (ALS) ambulance staffing to one paramedic and one emergency medical technician (EMT) for more efficient response.
The agency should petition the New York City Regional Emergency Medical Service Council to modify ALS ambulance staffing, and the Council should approve the petition.
Increase medical training for firefighters, allowing them to handle more emergencies without reliance on a subsequent ambulance and its staff.
Key Data
75 percent
— Portion of FDNY’s workload comprised of medical incidents.
5 percent
— Portion of FDNY’s workload comprised of fire incidents.
56 percent
— Portion of FDNY funding spent on fire operations.
28 percent
— Portion of FDNY funding spent on medical service.
$5 million
— Estimated annual savings from modifying ALS ambulance staffing to one paramedic and one EMT.
81
— Number of daily ambulance tours the city must cover following the bankruptcy of TransCare Ambulance.
The fiscal year 2017 Citywide Savings Program is insufficient to offset new spending or prepare for economic uncertainty, as it relies heavily on one-time re-estimates rather than long-term operational efficiencies. A more robust savings plan is necessary to build budget reserves and avoid drastic measures like tax hikes or service cuts when the inevitable economic downturn occurs.
Recommendations related to Efficiency Savings
In advance of the Executive Budget proposal, the Mayor should ask agencies to identify operational efficiencies that provide recurring savings to increase the budget cushion and guard against economic uncertainty.
The expanded Citywide Savings Program in the Executive Budget should include much more in the way of agency savings from initiatives that improve operations and provide recurring savings.
To prepare for a potential downturn, the City should exercise spending restraint and build reserves regularly and well in advance of a recession.
Key Data
$1.9 billion
— Total value of new savings initiatives proposed over fiscal years 2016 to 2020.
0.6 percent
— Savings as a share of city-funded spending during the fiscal year 2016 to 2020 period.
$7.9 million
— Total value of initiatives to make agencies more efficient in fiscal year 2016.
$2.7 billion
— Increase in city-funded spending included in the fiscal year 2017 budget proposal.
Mayor de Blasio's Citywide Savings Program is criticized for being unambitious, with planned savings of $1.9 billion from 2016 to 2019 representing only 0.6 percent of total city-funded spending. Less than one-quarter of these initiatives involve actual efficiency improvements, while the remainder relies on debt service savings, procurement reforms, and funding shifts.
Recommendations related to Efficiency Savings
The Mayor should set a higher goal for the Citywide Savings Program in his Executive Budget due in April.
The Mayor should expand the Citywide Savings Program in his Executive Budget in April.
Agencies should be required to participate in the Citywide Savings Program, as several have not, including the Fire Department and the Department of Environmental Protection.
There should be more of the really good stuff that saves taxpayers money and makes agency operations more productive.
Key Data
$804 million
— Initiatives yielding savings in fiscal year 2016.
$1.9 billion
— Planned savings over fiscal years 2016 to 2019, equaling 0.6 percent 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.
$55 million
— Annual value of procurement reforms previously planned but still unspecified.
$1.2 billion
— Spending re-estimates and funding shifts that substitute federal or state grants for local resources.
Expanding citywide curbside organic waste collection would cost between $177 million and $251 million annually, primarily due to the need for new collection truck routes. Instead, the city could achieve environmental goals more cost-effectively by limiting curbside collection to districts where it can be integrated into existing routes or by encouraging the use of in-sink food waste disposers in neighborhoods with sufficient wastewater infrastructure.
Recommendations related to Efficiency Savings
The City should expand curbside collections only where and when additional collection routes are not required to avoid significant new costs.
The City should consider encouraging the use of in-sink food waste disposers in select neighborhoods with adequate wastewater treatment plant infrastructure and capacity to reduce garbage collection.
Key Data
$177 million to $251 million
— The estimated annual cost of expanding citywide curbside organic waste collection.
88,000
— The minimum number of new annual truck-shifts required for citywide curbside organic waste collection.
$4 million
— The annual savings from implementing in-sink food waste disposers in four specific sanitation districts.
17,000 tons
— The amount of food waste that could be diverted annually by using in-sink disposers in four specific sanitation districts.
$1.7 billion
— The annual cost to taxpayers for managing residential trash in New York City.
1.8 million tons
— The annual amount of organic waste generated by New York City residents and businesses.
Expanding organic waste collection citywide would be prohibitively expensive under current models, requiring an estimated $177 million to $250 million in additional annual costs. To achieve environmental goals sustainably, the city should focus on targeted collection strategies, utilize in-sink disposers, and reduce long-term collection costs through contract negotiations or private competition.
Recommendations related to Efficiency Savings
The Department of Sanitation 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, which eliminates the need for truck-based collection.
Municipal leaders must bring down the cost of all collections in the long-term by negotiating changes to sanitation worker contracts or opening residential waste collection to competition among private carters.
Key Data
$177 million to $250 million
— Estimated annual citywide costs if the curbside organic waste program were expanded.
88,000
— Number of new truck-shifts needed each year for expanded collections.
10 to 15 percent
— The increase on the $1.7 billion cost of residential waste collection and disposal if the program is expanded.
$19 million
— The cost over two years for the current organic waste program serving 186,600 households.
12 to 26 percent
— The share of organic waste currently diverted by the pilot program.
New York City's preliminary budget increases spending by 4.5 percent without a corresponding serious savings plan, leaving reserves stagnant at $1.5 billion. To ensure long-term financial stability, the city must aggressively pursue agency efficiencies and set a higher savings target to offset the costs of new programs.
Recommendations related to Efficiency Savings
The mayor should set a 5 percent target for agency savings that goes much further than current proposals.
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.
Key Data
4.5 percent
— Increase in city-funded spending in the preliminary budget.
$400 million
— Agency savings included in the fiscal year 2016 budget.
$269 million
— Agency savings included in the fiscal year 2017 budget.
5 percent
— Target for agency savings called for by City Council members.
$1.5 billion
— Current level of city budget reserves.
$3.4 billion
— Current value of the retiree health benefits trust fund.
New York City's decision to increase wages for public and nonprofit employees to $15 an hour will cost taxpayers $238 million through fiscal year 2020 without securing any corresponding service improvements or productivity gains. These contract amendments undermine the integrity of the city's competitive bidding process and set a concerning precedent by providing benefits without offsetting costs through increased efficiency.
Recommendations related to Efficiency Savings
At best, the costs will be offset with increased productivity or efficiencies to improve service delivery.
Negotiations should not be a one-way street in which taxpayers give but receive nothing in return.
At a minimum, these changes should wait until contracts expire and are up for renewal or renegotiation.
Key Data
$15
— Hourly wage increase for public employees and employees of nonprofits contracted by the City of New York.
$238 million
— Total costs of the wage increases through fiscal year 2020.
$36 million
— Portion of the total costs allocated for public employees.
$202 million
— Portion of the total costs allocated for nonprofit employees.
10.4 percent
— Compounded wage increase pattern over seven years for DC37.
30,000
— Number of nonprofit employees providing city-contracted services receiving wage increases.
The New York City Fire Department faces a significant mismatch between its resource allocation, which heavily favors firefighting, and its actual workload, which is dominated by medical emergencies. Reorganizing the department to integrate fire and medical services, including training firefighters as EMTs and adjusting ambulance staffing, could improve efficiency and reduce redundant costs.
Recommendations related to Efficiency Savings
The FDNY should apply again for permission to change ALS ambulance staffing to one paramedic and one EMT, a change that would yield about $5 million in savings which could be reinvested to expand the number of ambulance tours.
The department should increase the medical training of firefighters so they can handle more situations without reliance on a separate ambulance and its staff.
Over the long term, 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 to rebalance the financial and human resources provided for each type of service to better align with service demands.
Key Data
$5 million
— Potential annual savings from changing ALS ambulance staffing to one paramedic and one EMT.
$1,200
— Estimated cost to subsidize EMT training per firefighter.
$6.8 million
— Average annual cost of operating an engine company in fiscal year 2015.
$8.6 million
— Average annual cost of operating a ladder company in fiscal year 2015.
New York City's 2015 budget strategy emphasizes the necessity of preparing for recession risks through the implementation of a citywide savings plan. This fiscal approach focuses on maintaining economic stability by proactively addressing potential financial challenges.
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 New York City Housing Authority faces significant financial challenges, with projected operating deficits reaching $194 million by 2019 due to high operating costs and insufficient revenue. To address these gaps, the authority's "NextGeneration NYCHA" roadmap proposes efficiency measures such as streamlining management, increasing rent collection rates, and transferring community and senior centers to other city agencies to generate millions in annual savings.
Recommendations related to Efficiency Savings
NYCHA should increase rent collection rates to HUD's 95 percent target to generate an estimated $39 million in 2015.
The authority 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.
The authority should negotiate work rule changes in collective bargaining to limit overtime compensation for work performed in the evenings and on weekends.
NYCHA should pursue long-term cost savings through private property management companies.
Key Data
$194 million
— Projected operating deficit for NYCHA in 2019.
$33 million
— Annual savings by 2019 from streamlining management to curtail the scope of responsibility for borough offices.
$19 million
— Annual savings from eliminating responsibility for community and senior centers.
$68 million
— Annual savings from reducing the operating cost gap between NYCHA and rent-stabilized units by 10 percent.
$90 million
— Annual savings by 2019 from reducing NYCHA's office headcount.
$39 million
— Estimated revenue generated in 2015 by increasing rent collection rates to HUD's 95 percent target.
The FY 2016 Executive Budget introduces a new savings program aimed at improving municipal service delivery, though it is criticized for being relatively small, with a third of the savings derived from lower interest rates. While the budget increases reserves by $1,030 million and adds $700 million in new spending commitments, the initial savings efforts should be expanded into more significant initiatives as the budget process continues.
Recommendations related to Efficiency Savings
The baby steps in this new savings program to improve the efficiency of municipal service delivery should become bolder strides as the budget process moves forward.
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 long-standing practice of setting efficiency targets. Establishing these targets is essential for maintaining balanced budgets and ensuring that government service delivery remains efficient even during periods of economic growth.
Recommendations related to Efficiency Savings
Mayor de Blasio should begin planning now for how to close the projected gaps and cope with any unexpected adverse conditions.
The city should implement a Program to Eliminate the Gap (PEG) in anticipation of projected and possibly growing deficits to ensure balanced budgets.
The administration should include efficiency targets in the budget to create pressure on officials to achieve savings, as these are often resisted by agencies and advocates.
Good 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.
1975
— The year New York City lost access to credit markets due to large deficits and unlimited borrowing.
2008
— The year the Great Recession began, creating extraordinary pressure on city finances.
New York City faces projected budget gaps of $1.0 billion in fiscal year 2017 and $2.1 billion in fiscal year 2019, necessitating a strategic approach to fiscal planning. Implementing a structured program to identify efficiencies in service delivery and maintain a balanced budget is essential, regardless of the specific terminology used to describe these cost-saving measures.
Recommendations related to Efficiency Savings
Mayor de Blasio should begin planning for how to close budget gaps and cope with any unexpected adverse conditions as well as new needs that may emerge.
Even in the absence of budget gaps, the City should include a continuous search for ways to achieve savings by making service delivery more efficient.
Mayor de Blasio's next financial plan should be creative in naming his strategy to reflect a progressive spirit.
Mayor de Blasio's next financial plan should identify ways to keep the budget balanced and make service delivery more efficient in the future.
Key Data
$6.5 billion
— Savings in fiscal year 2014 resulting from PEGs implemented from fiscal years 2008 to 2013.
$4.8 billion
— The unprecedented PEG in Year 1 of Mayor Bloomberg’s first financial plan following the recession and September 11, 2001 terrorist attacks.
$2.1 billion
— The projected budget gap in fiscal year 2019.
$1.0 billion
— The projected budget gap in fiscal year 2017.
$1.0 billion
— The PEG amount in Year 1 of Mayor Bloomberg’s last preliminary financial plan.
$1.4 billion
— The PEG amount required during the 2001 recession.
New York City's health insurance costs have doubled since 2005, prompting an agreement to achieve $3.4 billion in savings through 2018 by implementing structural changes rather than relying on temporary market fluctuations. To ensure these savings are genuine and sustainable, the city must prioritize initiatives that fundamentally reduce costs, such as better chronic disease management and reduced emergency room utilization, rather than crediting savings to lower-than-expected premium increases.
Recommendations related to Efficiency Savings
Initiatives should "bend the cost curve" and achieve recurring savings for City taxpayers by establishing premium-sharing, reducing per enrollee utilization, or better managing chronic conditions.
Savings should be counted clearly and honestly, excluding factors like lower national health care inflation or temporary premium rate freezes.
The City should pursue initiatives such as reducing emergency room utilization and improving chronic disease management to improve health outcomes and save money.
Key Data
$3.4 billion
— The total savings target agreed upon by the City and the Municipal Labor Committee between fiscal year 2015 and 2018.
9 percent
— The annual rate at which the financial plan projected health insurance spending to increase.
2.89 percent
— The City's actual health insurance rate increase for fiscal year 2016.
$5.3 billion
— The cost of the City's health insurance plan in fiscal year 2015.
$2.6 billion
— The cost of the City's health insurance plan in fiscal year 2005.
$1.2 billion
— The cumulative impact of claiming savings for low rate increases against a 9 percent projected growth rate.
The Preliminary Budget for Fiscal Year 2016 utilizes a thriving economy to address service needs and priorities while maintaining reserves. To ensure long-term fiscal health, the administration should review past spending commitments to identify inefficiencies and generate recurring savings for future economic downturns.
Recommendations related to Efficiency Savings
Additional expenditures should be accompanied by a review of past spending commitments to assess performance and reduce inefficiencies.
The City should conduct reviews to make city operations more effective and produce recurring savings that will help the City prepare for the next economic downturn.
The Port Authority of New York and New Jersey loses significant money on two Brooklyn port facilities that are not vital to operations. Repurposing these 105 acres for housing and commercial use could eliminate these financial losses while generating thousands of jobs and housing units for the community.
Recommendations related to Efficiency Savings
The Port Authority should close the two underperforming Brooklyn port facilities to reduce losses and spending.
The 105 acres of port land should be repurposed to increase vacant land in Community Board 6 by more than 175 percent, creating space for housing, schools, and parks.
The city should engage the community in a process to envision how the property could best be used to generate benefits greater than the current use.
Key Data
$82 million
— Total money lost by the Port Authority of New York and New Jersey in 2013.
$205,718
— Loss per acre produced by the Brooklyn port facility in 2013.
$184,788
— Loss per acre produced by the Red Hook port facility in 2013.
$29 million
— Annual savings the Port Authority would realize by 2029 if the facilities were repurposed.
5 percent
— Portion of total port acreage comprised by the two underperforming facilities.
175 percent
— Increase in vacant land in Community Board 6 if the 105 acres were made available for development.
The FY2016 New York State budget faces critical decisions regarding the allocation of a $4.5 billion windfall settlement and the management of spending growth to meet a 2% target. Key policy areas include the potential extension of cost-saving design-build authority, the implementation of agency efficiencies, and the management of Medicaid spending within a 3.6% cap.
Recommendations related to Efficiency Savings
The state should identify specific spending reductions to meet the 2% growth assumption and ensure a surplus.
The Governor should champion the extension of design-build, a proven tool for reducing construction costs.
The state should develop specific plans to realize greater efficiencies in agency spending rather than simply attempting to 'do more with less'.
Key Data
$4.5B
— Windfall settlement proposed for one-time spending.
3.6%
— Medicaid spending cap.
2%
— Budget growth assumption.
2017
— Year when lower tax rates for middle brackets expire.
To achieve genuine health insurance savings, the City must implement an objective measurement system that focuses on structural changes rather than temporary rate freezes or fund transfers. Savings calculations should be based on fixed enrollment baselines and exclude external factors like regional health inflation to ensure that only efficient, recurring cost reductions are credited.
Recommendations related to Efficiency Savings
An objective system for measuring savings should be established to ensure that savings lead directly to reductions in per person or per family premium costs.
Savings should be based on an agreed upon baseline number of people covered, meaning increases or decreases in covered lives should not affect the calculation of savings.
The City should credit savings related to eligibility audits toward the targets in exchange for union cooperation in eliminating the ineligible enrollees.
A significant source of potential savings should be studied by moving some or all from City plans to those available on the New York State Health Exchange with federal subsidies.
Temporary 'freezes' or low premium rate increases not supported by specific benefit structure changes should not be credited as savings.
Key Data
$1 billion
— The amount of additional funding taken from the Health Insurance Stabilization Fund that should not count as savings.
$100
— The fiscal year 2014 average payment per service used in the hypothetical radiation services centralization model.
20
— The average utilization of service per 1,000 enrollees used in the hypothetical radiation services centralization model.
3.0%
— The historical annual increase in payment per service used for baseline projections.
5.0%
— The historical annual increase in utilization per 1,000 enrollees used for baseline projections.
$527,748
— The projected savings in fiscal year 2018 from the hypothetical centralized radiation services program.
New York City's Health and Hospitals Corporation faces a worsening fiscal deficit projected to reach $1.7 billion by 2018, necessitating aggressive expenditure controls and modernized operations. To achieve financial sustainability, the organization must intensify efforts to reduce unneeded hospital capacity, improve the cost-coverage ratio of its MetroPlus plan, and establish a more stable funding relationship with the city.
Recommendations related to Efficiency Savings
HHC will need to intensify its efforts to make service delivery more efficient and reduce unneeded hospital capacity.
MetroPlus should seek to retain more of its members' utilization at HHC facilities by attracting patients to in-house providers.
HHC and municipal leaders should develop more rational and stable guidelines for funding HHC to improve its incentives for cost-effective service delivery.
HHC should advocate for available state tax exemptions and funding sources conditioned on greater participation by voluntary hospitals in caring for the uninsured.
HHC should implement 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
— Deficit run by the Health and Hospitals Corporation in fiscal year 2013
$645 million
— Estimated deficit for fiscal year 2014
$702 million
— Projected deficit for fiscal year 2015
$1.7 billion
— Projected deficit for fiscal year 2018
$300 million
— Total anticipated annual savings from the 2009 restructuring effort
$230 million
— Savings achieved from restructuring initiatives in fiscal year 2013
The New York City Health and Hospitals Corporation faces significant fiscal challenges, including projected budget gaps that require aggressive cost containment and restructuring to achieve long-term sustainability. To address these issues, the corporation must improve operational efficiencies, optimize its managed care plan, and establish a more rational financial relationship with the City to incentivize performance and cost-effective service delivery.
Recommendations related to Efficiency Savings
HHC must implement cost controls and the associated restructuring to ensure the organization's financial plan remains viable.
City leaders should develop a rational financial relationship with HHC to incentivize greater efficiencies and help fulfill the corporation's mission and mandates.
HHC leaders should advocate for conditioning available tax exemptions and funding sources on greater participation by all voluntary hospitals in sharing the burden of caring for the uninsured.
To realize necessary savings by fiscal year 2018, HHC will need to intensify its restructuring efforts to make service delivery more efficient and reduce unneeded hospital capacity.
City leaders should begin a dialogue with HHC and other national health care experts about the best way to rationalize the financial relationship between the City and the corporation.
Key Data
2,203
— Number of staff positions reduced by HHC between fiscal year 2010 and fiscal year 2014.
$230 million
— Baseline savings reported by HHC from restructuring initiatives in fiscal year 2013.
$141 million
— Administrative savings opportunities identified through greater efficiencies in materials management, plant maintenance, environmental services, and laundry and linen services.
$51 million
— Savings identified from affiliation contracts by better matching physician staffing with patient volume.
$40 million
— Estimated savings from ambulatory care realignment through consolidation of specialty outpatient services and closure of six satellite clinics.
New York City's garbage collection system is significantly more expensive than private-sector alternatives, with $2.3 billion spent annually on public and private trash handling. Implementing a series of short-term operational reforms and long-term structural changes, such as increasing collection efficiency and introducing competition, could save taxpayers hundreds of millions of dollars annually.
Recommendations related to Efficiency Savings
The City should redesign routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons to save $72 million a year.
The Department of Sanitation should expand the use of one-worker, automated trucks from 8 percent to 18 percent to save $20 million annually.
The City should eliminate "unproductive" productivity bonuses for workers, as meeting the criteria is a function of route assignments rather than actual productivity, saving $4 million a year.
The City should implement pay-as-you-throw financial incentives for garbage producers to discourage waste creation and encourage recycling, saving an estimated $57 million annually.
The City should introduce competition for public waste collection by soliciting bids for smaller waste streams and experimenting with private carters in specific districts, which could save $220 million over time.
The City should create franchises for commercial waste collection to limit the number of carters in a given area, reducing truck congestion and improving operational efficiency.
The City should diversify its snow removal workforce to include other public employees, private contractors, and retirees to avoid impacting year-round staffing decisions.
Key Data
$300 million
— Annual savings from implementing four long-term reforms to the garbage collection system.
$96 million
— Annual savings from implementing three short-term reforms to the Department of Sanitation.
$220 million
— Potential annual savings if all Department of Sanitation collections were subject to competition.
$72 million
— Annual savings from redesigning routes to increase refuse collected per truck-shift from 10 to 12 tons.
$2.3 billion
— Total amount spent annually on both the public and private systems of handling trash in New York City.
$57 million
— Estimated annual savings from implementing pay-as-you-throw fees to reduce refuse generation.
New York City could save over $300 million annually by modernizing its waste collection system through measures like route optimization, automated collection, and competitive bidding. These reforms would reduce the city's reliance on labor-intensive practices and incentivize waste reduction through volume-based fees.
Recommendations related to Efficiency Savings
The City should promote flexibility in service arrangements to meet neighborhood needs, such as redesigning routes to increase the average amount of refuse collected per truck-shift.
The City should expand the use of large containers and automated trucks to reduce injury rates and improve productivity.
The City should eliminate 'unproductive' productivity bonuses that are primarily dependent on route characteristics rather than worker behavior.
The City should implement financial incentives to reduce refuse generation, such as pay-as-you-throw fees, to encourage reuse and recycling.
The City should introduce competition to promote efficient public waste collection by soliciting public- and private-sector bids for smaller waste streams.
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 sanitation employees in the workforce.
Key Data
$275 million
— New York City would save about $275 million annually by redesigning municipal waste collection policies.
$72 million
— Redesigning routes to increase the average amount of refuse collected per truck-shift from 10 to 12 tons would save the City $72 million a year.
$20 million
— Expanding the use of one-worker, automated trucks from 8 percent to 18 percent would save the City $20 million annually.
$4 million
— Eliminating 'unproductive' productivity bonuses would save the City $4 million a year.
$57 million
— Implementing pay-as-you-throw fees would save the City an estimated $57 million annually.
$220 million
— If all DSNY collections were subject to competition, the City would save $220 million a year.
New York City can reduce the significant expense of settlements and judgments by holding agencies accountable for these costs within their own budgets, similar to the successful strategy implemented by the Health and Hospitals Corporation. By adopting data-driven tools like ClaimStat and shifting financial responsibility to individual agencies, the City can incentivize risk management and lower taxpayer-funded payouts.
Recommendations related to Efficiency Savings
The City should include the cost of settlements and judgments in agency budgets to ensure these expenses become an explicit part of each City Commissioner’s responsibility.
Agencies should increase accountability at the precinct or unit level to better manage and reduce legal liability.
Departments should examine claims filed to identify specific practices, shifts, units, or officers that contribute to legal liability.
Agencies should act quickly to address any issues identified through data analysis to prevent future claims.
Agencies should implement initiatives to improve safety and eliminate errors, such as infection prevention measures or automated systems, to reduce the frequency of claims.
Key Data
$674 million
— Settlements and claims expense in the fiscal year 2015 budget.
54 percent
— Share of total settlements and judgments in fiscal year 2013 attributed to the Health and Hospitals Corporation and the New York Police Department.
$137.2 million
— NYPD settlements and judgments in fiscal year 2013.
$130.6 million
— HHC settlements and judgments in fiscal year 2013.
$86 million
— NYPD settlements and judgments in 2003.
$28.6 million
— NYPD settlements and judgments in 1992.
New York City's fiscal year 2015 budget increases spending and lacks a Program to Eliminate the Gap (PEG), leaving the city vulnerable to future budget deficits. To ensure fiscal stability, the city should implement recurring health care savings, modernize agency operations through collective bargaining, and reinstate a PEG program to identify efficiencies.
Recommendations related to Efficiency Savings
The Administration and the MLC should agree to changes that provide recurring savings on rapidly-growing health care costs.
The unsettled contracts present an opportunity to make city operations more efficient by eliminating archaic work rules, adopting new technologies, and reinventing service delivery.
Implementing new priorities in the budget should be coupled with a renewed emphasis on finding efficiencies within agency operations through a PEG program.
There should be restraint in adding new spending.
The de Blasio Administration should develop guidelines for regular deposits to and potential withdrawals from the RHBT in order to prevent future raids on the fund.
Key Data
$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.
$1.3 billion
— Recurring health care savings targeted after the initial $3.4 billion in savings.
$2.6 billion
— Projected budget gap for fiscal year 2016.
$1.9 billion
— Projected budget gap for fiscal year 2017.
$3.1 billion
— Projected budget gap for fiscal year 2018.
The proposal to hire 1,000 new police officers at an annual cost of nearly $100 million is unnecessary given that the city already maintains a high ratio of 41.7 officers per 10,000 residents compared to the 23.8 average in other major cities. Instead of new hiring, the city could achieve greater efficiency by reassigning the 730 officers currently performing administrative tasks to patrol duty and hiring civilian administrative aids at a lower cost.
Recommendations related to Efficiency Savings
New hiring will not assure a reduction in overtime expenditures without an accompanying revision of overtime protocols.
Negotiations should instead be focused on ways to control overtime.
Negotiations should instead be focused on moving officers performing civilian roles to patrol.
Negotiations should instead be focused on administrative restructuring within the department.
Hiring police administrative aids to free up 500 officers for patrol duty would cost $26.3 million annually.
Key Data
$26.3 million
— Cost to hire police administrative aids to free up 500 officers for patrol duty.
730
— Number of police officers currently performing civilian functions.
17.8
— Number of civilian employees per 10,000 residents in the NYPD.
6.6
— Average number of civilian employees per 10,000 residents among the 50 most populous U.S. cities.
$580 million
— Projected overtime cost for fiscal year 2014.
41.7
— Number of police officers per 10,000 New Yorkers.
The agreement regarding municipal worker and retiree health insurance fails to prioritize structural reforms that would generate substantial, recurring savings, relying instead on temporary measures like artificial rate caps. Meaningful financial returns for taxpayers and union members require shifting away from calculating savings based on Financial Plan projections toward implementing initiatives that actually lower health care costs.
Recommendations related to Efficiency Savings
The agreement should focus on initiatives that lower health care costs by making the system more efficient to achieve substantial, recurring savings.
Savings should be calculated based on the actual results of specific initiatives rather than relative to City Financial Plan projections.
The agreement should avoid one-time or temporary savings such as artificial rate caps or adjustments to the City's contribution to the Health Insurance Stabilization Fund.
To achieve meaningful health insurance savings, the city should establish an objective measurement system that focuses on recurring efficiencies rather than temporary measures or accounting adjustments. Savings calculations must be based on specific changes in benefit structures that reduce provider payments or utilization, while excluding factors like national inflation or temporary premium freezes.
Recommendations related to Efficiency Savings
An objective system for measuring savings should be established, with the basic principle that qualifying savings must be recurring and of a nature that truly 'bends the curve' in health care costs.
Savings measures should be associated with specific changes in the plan benefit structure that either reduce provider payment levels for, or reduce utilization of, a particular service.
The City should have a reliable mechanism for recouping amounts of planned savings not actually achieved during a fiscal year.
Savings should be based on an agreed upon baseline number of people covered, meaning increases or decreases in covered lives should not affect the calculation of savings.
Temporary 'freezes' or low premium rate increases not supported by specific benefit structure changes should not be credited as savings.
Additional funding taken from the Health Insurance Stabilization Fund beyond the $1 billion already agreed upon should not count as savings.
Key Data
$1 billion
— Additional funding taken from the Health Insurance Stabilization Fund beyond this amount should not count as savings.
$2,736,126
— The baseline cost for the hypothetical radiation services program in FY2018.
$527,748
— The calculated savings for the hypothetical radiation services program in FY2018.
$100
— The fiscal year 2014 average payment per service for the hypothetical radiation services program.
1,000,000
— The baseline assumption of enrollees for the hypothetical radiation services program.
$2,208,378
— The actual cost for the hypothetical radiation services program in FY2018.
New York City's garbage collection system is significantly more expensive than private alternatives and other major cities due to inefficient labor contracts, rigid scheduling, and outdated recycling practices. Addressing these issues during contract negotiations and implementing policies like 'pay-to-throw' could generate substantial savings and improve operational productivity.
Recommendations related to Efficiency Savings
The City should address the inefficient labor contract provisions regarding compensation, productivity bonuses, route scheduling, and snow removal to reduce the exceptionally high costs of garbage collection.
New York City should implement 'pay-to-throw' arrangements to provide incentives for waste reduction, as most other large cities do.
The City should reform its mandated recycling practices by moving to 'single stream' recycling to reduce the number of trucks required for collection.
Key Data
$2.3 billion
— annual amount spent by the public and private systems combined to handle trash in New York City.
$730 million
— estimated annual amount private businesses pay to remove their trash.
$431
— DSNY's average combined collection and disposal cost per ton.
$185
— average combined collection and disposal cost per ton for private carters.
NY1 According to a survey by the Citizens Budget Commission, the city is at the top of the heap in collection costs—coming in at $251 a ton. When you factor in disposal, that number shoots up to $431. The watchdog group says that's more than double what it costs private…
New York City's sanitation department faces high costs due to inefficient collection practices, including rigid scheduling, reliance on manual labor, and a lack of financial incentives for waste reduction. Implementing modern collection technologies, adopting pay-as-you-throw pricing, and utilizing private sector franchise agreements could significantly improve operational efficiency and reduce taxpayer expenses.
Recommendations related to Efficiency Savings
The City should implement a pay-as-you-throw system for residential service, while devising a plan to avoid increasing the overall tax burden, such as household rebates or a property tax rate reduction.
DSNY should adopt automated trucks for collection, as they could be cost-effective despite the higher upfront and ongoing maintenance costs.
The City should utilize pre-authorized private contractors for snow removal to create a more efficient system, similar to other large cities.
The City should consider commingled recycling collection in areas with low diversion rates to improve economic efficiency.
The City should limit the number of private waste carters through either exclusive or non-exclusive franchise agreements to reduce truck traffic and emissions.
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 per ton.
$185 per ton
— Average combined collection and disposal cost per ton for private carters.
$100,000
— Estimated annual savings per fully-automated, one-worker truck.
$629 per ton
— DSNY cost to collect recyclable material in fiscal year 2012.
$150,000
— Average annual compensation for a sanitation worker.
New York State's reliance on unspecified future savings to balance its budget masks growing fiscal gaps that will require concrete, difficult spending reductions to maintain the self-imposed 2 percent spending cap. Achieving these targets necessitates either breaking prior commitments in areas like school aid and Medicaid or implementing significant cuts to other state operations and local aid categories.
Recommendations related to Efficiency Savings
The State must close projected budget gaps with concrete savings plans rather than relying on unspecified future savings.
New York should achieve baseline reductions in school aid by better targeting resources to the neediest districts and reforming overly rich reimbursement formulas.
State leaders should return to a straightforward and transparent financial plan that accurately reflects baseline budget gaps.
Key Data
$2.1 billion to $4.9 billion
— Range of unspecified 'future savings' used to plug budget gaps from fiscal year 2016 to fiscal year 2018.
$1.8 billion to $3.4 billion
— Projected budget gaps by fiscal year 2018 that require concrete savings plans to close.
42 percent
— Portion of the state operating fund budget comprised by school aid and Medicaid.
$730 million
— Amount the Department of Health absorbed through a stabilization fund for mental hygiene services in fiscal year 2014.
$7.6 billion
— Value of new bond authorizations included in the adopted budget that will increase debt service costs.
16 percent
— Projected growth of school aid, Medicaid, pension contributions, and debt service from fiscal years 2015 to 2018.
New York's preschool special education system suffers from fragmented delivery, lack of cost containment, and significant fraud, leading to a 73 percent increase in expenditures to $1.37 billion over a decade. Legislative action is required to mandate provider audits, improve oversight of service evaluations, and study alternative reimbursement methodologies to ensure cost-effective service delivery.
Recommendations related to Efficiency Savings
The state should approve A7302-A/S5568-A to improve the oversight of preschool special education program providers.
The state should require that every provider be audited at least once by the State Comptroller by March 31, 2018.
The state should require that Executive Directors of providers be fully engaged and qualified for their positions.
The state should require school district's Committee on Preschool Special Education (CPSE) consent in writing whenever the same provider conducts the evaluation and also provides services pursuant to that evaluation.
The State Education Department (SED) should be tasked to complete a study of alternative reimbursement methodologies and monitoring protocols to identify further reforms.
Key Data
27 percent
— Increase in public school enrollment from 63,509 to 83,038 between school year 2001-02 and 2011-12.
91 percent
— Increase in the number of preschoolers receiving more than one authorized service over the same decade.
73 percent
— Growth in expenditures for preschool special education services over the decade.
$1.37 billion
— Total expenditures for preschool special education services by the 2011-12 school year.
$12 to $38 per hour
— Rate for an hour of Special Education Itinerant Teacher (SEIT) services in the Western New York region in 2012.
$23 to $58 per hour
— Rate for an hour of SEIT services in the Long Island region in 2012.
This presentation was given during CBC's Conference on The Most Important Economic and Fiscal Decisions Facing the Next Mayor , which took place on December 6, 2013.. CBC provides a framework for curbing expenditures effectively and provides 8 options for savings: Implementing health insurance premium-sharing; Consolidating union welfare funds;…
New York's preschool special education system suffers from fragmented delivery and a lack of cost-containment incentives, leading to significant expenditure growth that outpaces inflation. Legislative action is required to mandate provider audits, enforce management qualifications, and address conflicts of interest to improve the cost effectiveness of these services.
Recommendations related to Efficiency Savings
Approve A7302-A/S5568-A to improve the oversight of preschool special education program providers.
Require that every provider be audited at least once by the State Comptroller by March 31, 2018.
Require that Executive Directors of providers be fully engaged and qualified for their positions.
Require a school district’s Committee on Preschool Special Education (CPSE) consent in writing whenever the same program provider conducts the evaluation and provides services.
Task the State Education Department (SED) to complete a study of alternative reimbursement methodologies and monitoring protocols to identify further reforms.
Key Data
nearly 700
— Number of agencies used by the State Education Department to provide services in 2012.
$12 to $38 per hour
— Range of rates for an hour of Special Education Itinerant Teacher (SEIT) services in the Western New York region in 2012.
$23 to $58 per hour
— Range of rates for an hour of SEIT services in Long Island in 2012.
73 percent
— Growth in expenditures for preschool special education services from school year 2001-02 to 2011-12.
$792 million to $1.37 billion
— Growth in expenditures for preschool special education services from 2001-02 to 2011-12.
2.8 percent
— Annual general inflation rate from 2001-02 to 2011-12.
The current binding arbitration process for public unions often results in generous wage awards that burden local governments, necessitating a reform of the law to prioritize fiscal sustainability. New regulations should enforce strict deadlines and require that arbitration awards be based on a locality's actual capacity to pay without resorting to tax hikes or service cuts.
Recommendations related to Efficiency Savings
Revise the binding arbitration law to strengthen localities' position to incentivize union leaders to negotiate.
The changes to the arbitration process should include time limits and deadlines that avoid the uncertainties and risks arising from delayed, retroactive wage awards.
New, more specific decision criteria should place greater emphasis on the fiscal condition of local governments.
The definition of 'ability to pay' should be the capacity of a locality to pay all costs of the imposed contract from recurring resources, including savings from productivity gains, without increasing taxes, making service cuts, or employing fiscal gimmicks.
Key Data
4.5%
— Wage increase awarded to New York City police officers in the 2004-2006 contract.
5%
— Wage increase awarded to New York City police officers in the 2004-2006 contract.
2%
— Annual raise limit proposed by Governor Cuomo for localities meeting a definition of 'fiscally distressed'.
The SAGE Commission report outlines strategies to modernize state government operations, including consolidating agencies, reforming civil service laws, and expanding design-build authority to reduce costs. By implementing performance management systems and right-sizing facilities like prisons, the state can achieve long-term fiscal sustainability and improve service delivery.
Recommendations related to Efficiency Savings
The state should "right size" the expensive and underutilized criminal and juvenile justice systems by closing facilities.
The state should restructure services for the mentally ill and developmentally disabled to eliminate antiquated and problematic systems of care.
The state should merge and consolidate agencies and public authorities that perform overlapping functions to achieve recurring savings.
The state should take full advantage of modern information technology to improve customer service and make cost reductions possible.
The state should reform the civil service law and the performance appraisal process to enhance managerial discretion in employment decisions.
The state should expand design-build authority for capital projects to all State agencies to reduce construction costs.
Key Data
18%
— Increase in State spending on operations in just three years from 2005 to 2008.
9%
— Total growth in State operations spending from 2008 to 2012.
$19 billion
— Annual agency spending held flat from fiscal year 2010 to fiscal year 2012.
135,723
— Executive headcount at the end of fiscal year 2005.
119,579
— Executive headcount at the end of fiscal year 2012.
17%
— Drop in Executive headcount from the peak hiring year of fiscal year 2008 to 2012.
The proposed state budget should prioritize fiscal restraint by limiting operating fund spending growth to under 2 percent and rejecting the pension 'stabilization' plan that would increase long-term costs. Furthermore, the state should improve efficiency by eliminating wasteful school aid formulas, restricting the use of insurance fund reserves to one-time expenses, and halting the expansion of economic development spending until subsidies are better justified.
Recommendations related to Efficiency Savings
The Legislature should follow the pattern set in the last two years and keep state operating funds spending growth under 2 percent.
The MRT proposal to close the Medicaid eligibility loophole of 'spousal refusal' should be adopted.
The budget includes two prison closures that should proceed, and additional facility closures and service reforms in juvenile justice should also be approved.
Provisions like 'hold harmless' that steer additional funding to wealthier districts where it is not needed to provide a quality education should be eliminated.
The Legislature should require that all of the State Insurance Fund reserves be used prudently for purposes such as capital investment and debt retirement.
Until the State more systematically scrutinizes and justifies its subsidies for business, New York should not increase economic development expenditures.
Instead of adopting the pension 'stabilization' plan, the Legislature should enact real mandate relief measures that aid local governments.
Key Data
$21.1 billion
— Proposed school aid in the Governor's budget for the next school year.
$50 million
— Total pool for competitive school grants for school year 2012-13.
$17 million
— Amount awarded to 36 of the State's 696 districts from the competitive grant pool.
$2 billion
— Excess reserves identified in the State Insurance Fund.
$800 million
— Increase in spending for economic development activities in the proposed budget.
$7 billion
— Amount spent annually in New York on economic development.
New York's pupil transportation aid formulas are poorly designed, leading to high costs and inequitable distribution that favors wealthy districts. Reforming these formulas to be simpler and reducing overall reimbursement rates would incentivize districts to improve efficiency and redirect funds to more targeted educational needs.
Recommendations related to Efficiency Savings
New York should simplify its current formulas to improve targeting.
One formula should be applied to all districts, based upon or equal to the foundation aid ratio.
The state should lower the overall reimbursement rate for pupil transportation aid.
The state should eliminate the minimum reimbursement for the wealthiest districts.
Districts should participate in regional transportation initiatives to achieve cost savings.
Key Data
$2.97 billion
— Annual cost of pupil transportation in New York State.
$1,100
— Average per pupil transportation spending in New York in 2010.
140%
— Amount New York's per pupil transportation spending is above the U.S. average of $459.
$270 million
— Estimated state funds available for redirection if the statewide average transportation aid reimbursement rate were reduced from 54% to 45%.
$187,000
— Potential annual savings from eliminating five bus routes in the Lewiston-Porter Central School District.
$1.1 million
— Potential savings from eliminating nine bus runs in the Goshen Central School District.
New York State's school aid distribution relies on outdated "hold harmless" provisions that fail to account for shifting enrollment and local wealth, leading to significant fiscal inefficiencies. Consolidating small school districts with low enrollment could generate 7% to 20% savings through economies of scale, yet current aid formulas often disincentivize necessary adjustments like school closures.
Recommendations related to Efficiency Savings
Consolidate school districts with enrollment below 300 or 900 to achieve 7% to 20% savings through economies of scale.
Eliminate "hold harmless" provisions to prevent aid from being set in statute at levels that do not reflect current student enrollment or local wealth.
Adjust state aid formulas to reflect actual enrollment counts and changing district circumstances to encourage districts to close schools and reduce expenses when enrollment falls.
Key Data
7% to 20%
— Potential savings through economies of scale from consolidating small school districts.
$20.4 billion
— Total aid expected to be received by New York school districts from the state in school year 2012-13.
40%
— Average portion of total school district budgets comprised of state aid.
554
— Number of pupils by which enrollment in Albion has dropped since 2006.
22%
— Percentage drop in Albion enrollment since 2006.
$5,589
— Per-student aid amount for the Marlboro school district.
New York City spends over $2 billion annually on waste management, with a significant portion of that cost driven by the inefficient practice of exporting garbage to distant landfills. Shifting to local waste-to-energy facilities and implementing financial incentives for waste reduction could save taxpayers nearly $120 million annually and significantly reduce greenhouse gas emissions.
Recommendations related to Efficiency Savings
The City should foster the construction of waste-to-energy plants sited and designed for city needs and should partner with owners of existing facilities within the region to expand their capacity and willingness to process New York City’s waste.
The City should implement a trial pay-as-you-throw system in the short-term, taking lessons learned to a citywide program in the long-term.
The City should stick to its plan and reinvigorate the recycling program by touting the expansion and the simplification of recycling rules.
Municipal leaders should give high priority to managing solid waste in a way that is fiscally and environmentally sound.
The City should pursue strategies to bring the number of tons of garbage sent to landfills down through policies aimed at less waste generation and more recycling.
Key Data
$119 million
— Annual savings for the City if new and expanded facilities accommodate two million tons of New York City waste.
$2 billion
— Present value savings over the next 30 years from expanding local waste-to-energy capacity by two million tons.
35 percent
— Reduction in annual greenhouse gas emissions from diverting two million tons of waste from distant landfills.
$95 per ton
— Cost to export and bury three million tons of New York City garbage in landfills.
133,000 cars
— Equivalent number of cars added to the road by the greenhouse gas emissions generated from New York City's landfilled waste.
16 percent
— Average garbage disposal reduction found in American communities that implemented pay-as-you-throw systems.
The Metropolitan Transportation Authority has implemented a wide-scale efficiency program projected to yield $720 million in savings in 2012, following a 2010 initiative that generated over $500 million in recurring savings. To further address financial deficits and avoid fare hikes or service cuts, the agency must pursue additional productivity concessions, such as merging conductor and train operator roles and implementing work rule changes.
Recommendations related to Efficiency Savings
The MTA should merge the position of "conductor" and "train operator" to shift toward more efficient operations.
The MTA should require up to one-fifth of train operators and conductors to work on a part-time basis to provide scheduling flexibility and reduce the need for overtime.
The MTA should eliminate paid wash-up time, end shape-up periods for bus and car maintainers, and end tool allowances to achieve operational efficiencies.
The MTA should require station cleaners to perform routine maintenance chores, such as changing light bulbs and removing graffiti, to expand the range of duties and improve efficiency.
The MTA should accelerate the installation of clear partitions for buses to improve safety and efficiency.
Key Data
$720 million
— Projected yield from the MTA's wide-scale efficiency program in 2012.
$500 million
— Recurring savings generated by the MTA's 2010 "top-to-bottom" efficiency program.
$42 million
— Cost increase for each one-point wage increase awarded to the TWU.
1,000 positions
— Number of positions eliminated by the MTA, including over 500 layoffs.
Public-private partnerships offer a mechanism to improve infrastructure management by leveraging private sector expertise to lower lifecycle costs and enhance maintenance standards. By shifting from traditional procurement to models that include long-term maintenance and private financing, governments can address the chronic underfunding and poor condition of public assets like bridges, schools, and parks.
Recommendations related to Efficiency Savings
PPPs should be focused on achieving efficiencies in the life cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public sector operation.
New York’s leaders should give high priority to assets that are currently in poor condition and have a history of poor maintenance when selecting opportunities for effective PPPs.
PPPs should be initiated as pilot programs and viewed as benchmarks for project delivery times and maintenance standards to allow for comparison with facilities under direct public management.
The public sector must develop an enhanced capacity for contract design, performance measurement and monitoring in order for PPPs to be successful.
Public officials should negotiate with the private partner to establish contractually compensation or work conditions similar to that provided to public employees to address labor concerns.
Key Data
$1.6 trillion
— Investment estimated by the American Society of Civil Engineers as necessary in the next five years to bring the nation’s infrastructure to a good condition.
$3.2 billion
— Critical maintenance backlog identified for the City University of New York system.
$1.7 billion
— Critical maintenance backlog identified for the State University of New York system.
$509 billion
— Total value of 1,109 PPP projects launched globally between 1985 and 2007.
$24.3 billion
— 22-year cumulative value of PPP projects in the United States.
$220 billion
— Estimated annual investment needed through 2035 to maintain and improve all modes of surface transportation.
The current system of multiple, independent union welfare funds for municipal employees is inefficient, lacking accountability and economies of scale. Consolidating these benefits under the City's health insurance program and implementing a centralized cafeteria plan for non-health benefits could yield significant taxpayer savings.
Recommendations related to Efficiency Savings
The varying and inefficient package of drug, dental and optical benefits provided by the multiple welfare funds should be replaced by a standard set of benefits included under the City’s health insurance program.
A new centralized plan should be developed to provide non-health related benefits through a centralized cafeteria plan.
New standards should be set to improve accountability for any remaining union welfare fund expenditures.
Key Data
$1 Billion
— Annual City payments to union welfare funds.
$146 Million
— Total annual savings from consolidating health benefits and administrative costs.
$12.7 Million
— Estimated annual administrative savings from consolidating welfare funds.
$90 Million
— Estimated savings from using formularies for pharmaceutical benefits.
$135 Million
— Estimated annual benefits savings from consolidating health benefits.
83%
— Percentage of total City payments accounted for by ten large unions.
New York City's waste management system is inefficient and costly, with taxpayers spending $4 billion annually on services that could be improved through better recycling, waste reduction, and the use of waste-to-energy facilities. Implementing these changes could save millions of dollars, allowing funds to be redirected toward other essential public services.
Recommendations related to Efficiency Savings
New York City should test the effectiveness of “pay to throw” fees for collection to incentivize waste reduction.
The City should implement a tax on plastic bags to signal the fiscal and environmental cost of waste disposal.
The Department of Sanitation should achieve greater economies of scale to make recycling collection more cost-effective.
The City should aim to reach the feasible target recycling rate of 35 percent to significantly reduce collection 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.
$205 million
— Potential annual savings from a 10 percent reduction in the amount of waste generated.
$50 million
— Potential annual savings from lowering the average disposal cost of 2 million tons of garbage from about $90 to $65 per ton.
56 percent
— Increase in collection cost per ton of refuse from $154 in 2005 to current levels.
$575 per ton
— Cost for handling recycled material in New York City.
$440 per ton
— Average cost of collecting and disposing of waste by the Department of Sanitation.
Municipal labor agreements have largely avoided layoffs by diverting city resources or creating new budget risks rather than securing significant structural concessions. Achieving recurring savings requires large-scale reforms, such as eliminating the Absent Teacher Reserve and implementing employee health insurance premium co-payments.
Recommendations related to Efficiency Savings
Eliminating the Absent Teacher Reserve (ATR) altogether could save $100 million, which is more than both agreements described here combined.
Revising employee health insurance arrangements by requiring all employees to make premium co-payments of 10 percent for individual and 25 percent for family health coverage could save $625 million in fiscal year 2012.
Key Data
$625 million
— Potential savings in fiscal year 2012 from requiring all employees to make premium co-payments of 10 percent for individual and 25 percent for family health coverage.
$100 million
— Estimated savings from eliminating the Absent Teacher Reserve (ATR) altogether.
$315 million
— Budgeted savings from 4,600 teacher layoffs that were avoided.
$16 million
— Savings from the agreement with District Council 37 (DC37) regarding Department of Parks and Recreation workers.
New York City's fiscal health is threatened by structural spending growth in health insurance, pensions, and debt service, which are projected to consume a larger share of the budget. Implementing reforms such as employee premium sharing, pension adjustments, and capital budget downsizing could generate billions in savings and mitigate the need for future service cuts and layoffs.
Recommendations related to Efficiency Savings
The City’s leaders must work with the Municipal Labor Committee to reform health insurance arrangements.
The City should adopt a premium-sharing arrangement similar to that of most New York State employees, which would produce $625 million in savings beginning in 2012.
Requiring retirees under age 65 to pay 50 percent of their premium would generate about $700 million.
Eliminating the Medicare Part B reimbursement for retirees over age 65 would save an additional $250 million.
The City Council should join the Mayor in backing the pension reform bill that has been introduced by the Governor.
The Mayor and City Council should make slowing the growth of debt service a higher priority by downsizing the capital budget.
Key Data
$30 billion
— Total savings over the next 30 years from proposed pension reforms.
$625 million
— Annual savings beginning in 2012 from adopting a premium-sharing arrangement for health insurance.
$4.8 billion
— Projected budget gap for fiscal year 2013.
$700 million
— Estimated savings from requiring retirees under age 65 to pay 50 percent of their health insurance premium.
$250 million
— Estimated savings from eliminating the Medicare Part B reimbursement for retirees over age 65.
$5.4 billion
— Projected spending reduction in fiscal year 2012 achieved through agency cuts.
Reforming health insurance arrangements for city employees and retirees could generate over $1.5 billion in savings for fiscal year 2012, helping to avoid proposed layoffs and service cuts. These savings would be achieved by implementing premium sharing for current employees, requiring retiree contributions, and ending the reimbursement of Medicare Part B premiums.
Recommendations related to Efficiency Savings
Institute health insurance premium sharing for current employees at 10 percent for individual coverage and 25 percent for family coverage.
Require retirees to pay 50 percent of their premium cost.
End reimbursement of Medicare Part B premiums.
Key Data
$1.5 billion
— Total potential savings for the City in fiscal year 2012 from three proposed health insurance reforms.
$600 million
— Savings in fiscal year 2012 from instituting health insurance premium sharing for current employees.
$700 million
— Savings in fiscal year 2012 from requiring retirees to pay 50 percent of their premium cost.
$250 million
— Savings in fiscal year 2012 from ending the reimbursement of Medicare Part B premiums for retirees.
New York's pension system requires structural reform to address rapidly escalating costs that have forced municipal budget cuts and threaten long-term fiscal stability. Implementing changes such as raising the retirement age, increasing employee contributions, and eliminating pension padding could save the state and city billions over the next three decades.
Recommendations related to Efficiency Savings
The state should increase the retirement age to 65 to align with Medicare eligibility and reduce the length and cost of benefit payouts.
New York should raise required employee contributions to 6 percent for their entire length of service to bring them closer to national norms.
Legislators should eliminate "pension padding" by calculating benefits based on the highest five years of earnings rather than the highest three.
The state should exclude overtime pay from earnings used to calculate pension benefits to prevent employees from inflating their final payouts.
The proposal should implement an "anti-spiking cap" to exclude extraordinary increases in income in any single year from pension calculations.
Key Data
$93 billion
— The projected 30-year savings for state and local governments resulting from the proposed pension reforms.
$30 billion
— The projected 30-year savings for New York City resulting from the proposed pension reforms.
$179,000
— The proposed maximum eligible wages cap for calculating pension benefits.
$1.5 billion to $7 billion
— The growth in New York City pension costs since 2002.
$8.7 billion
— The projected cost of New York City pension contributions in 2015.
9 to 1
— The current ratio of employer contributions to employee contributions in the pension funds.
New York City faces a budget crisis that could be mitigated by reforming unusually costly retiree health insurance benefits, which currently carry a $70 billion unfunded liability. Implementing changes such as ending Medicare Part B reimbursements and requiring premium-sharing could generate $950 million in savings, helping to avoid layoffs and service cuts.
Recommendations related to Efficiency Savings
The city should end reimbursement for Medicare Part B premiums to bring the city in line with the public-sector norm.
City leaders should increase vesting requirements for the rest of the city workforce, similar to the change made for teachers in 2009.
The city should require retirees to share in the cost of their premiums, as New York state has required since the 1980s.
Key Data
$1.5 billion
— Cost of retiree health insurance in the current year.
$2.2 billion
— Projected cost of retiree health insurance by 2015.
$70 billion
— Existing unfunded liability created by retiree health-insurance obligations.
$250 million
— Potential savings in fiscal year 2012 from ending Medicare Part B premium reimbursements.
$700 million
— Potential savings in 2012 if retirees paid half their premiums.
$5.4 billion
— Amount eliminated from planned spending through 10 rounds of cost-cutting.
The Metropolitan Transportation Authority's operating budget faces significant pressure, with total operating expenses for its five largest passenger transport divisions reaching $8.0 billion in 2009. To address these fiscal challenges, the agency has implemented various cost-cutting initiatives, including service reductions and efficiency measures, projected to yield $935 million in total annual savings by 2014.
Recommendations related to Efficiency Savings
The MTA should prioritize efficiency initiatives by benchmarking unit cost measures against other large urban transit agencies to identify areas where the MTA is out of line with national practices.
The MTA should pursue conforming its practices to those of direct state government employees regarding a new pension tier and cost sharing for health insurance premiums.
The MTA should focus on terminating redundant staff, such as former token booth clerks, to achieve efficiency improvements in non-vehicle operations.
The MTA should prioritize efficiency improvements in its bus systems, as they are inefficient compared to other large U.S. bus systems and represent a major portion of operating expenses.
The MTA should conduct an exploration of transit practices in Chicago to identify potential new efficiency initiatives for its subway and rail systems.
Key Data
$8.0 billion
— Total operating expenses for the five largest MTA passenger transport divisions in 2009.
$935 million
— Total projected recurring savings from all identified cost-cutting initiatives by 2014.
$525 million
— Recurring savings expected from efficiency measures and service cuts presented under the 'Over-hauling How the MTA Does Business' theme.
$100 million
— Annualized savings projected from service cuts that took effect in June 2010.
$220 million
— Projected savings from the 'net-zero' wage policy by 2014.
$75 million
— Efficiency savings identified for 2011 from re-bidding health benefits, consolidating IT functions, and strategic sourcing.
New York's Medicaid Redesign Team has introduced a package of reforms aimed at reducing program spending by $2.85 billion, utilizing strategies such as provider rate reductions, utilization controls, and a new program-wide spending cap. These measures, which include capping non-economic damages in malpractice suits and reforming long-term care payments, represent a significant shift toward controlling costs while maintaining care quality.
Recommendations related to Efficiency Savings
The state should implement the effective savings measures speedily and test the new spending cap carefully in the coming year.
Future savings will require broad changes in the way providers are paid and greater efforts to limit excessive utilization through managed care and other new controls.
Policymakers should overhaul the method by which nursing home payments are set to provide greater incentives for efficiency.
While short-term malpractice reforms are justifiable, the state should pursue a longer-term look at options for malpractice reform to achieve more beneficial results.
Because added revenues will increase the cost of care, future efforts should be pursued to reverse the new assessments.
Key Data
$440 million
— Combined savings in the next fiscal year from eliminating inflation-based increases and cutting base rates 2 percent for institutional providers.
$178 million
— Combined savings from two proposals that reduce premium rates for managed care organizations.
$64 million
— Combined annual savings from two proposals relating to nursing homes.
$100 million
— Savings in fiscal year 2011-12 by limiting payments to Certified Home Health Agencies.
$57 million
— Estimated annual savings from restricting personal care services in New York City.
$39 million
— Estimated savings in fiscal year 2011-12 from the Medicaid Inspector General assuming responsibility for all estate recovery actions.
New York State and City should eliminate the reimbursement of Medicare Part B premiums for retirees, a rare and costly fringe benefit that provides larger payments to those with higher incomes. Eliminating this benefit would generate significant budget savings without impacting essential services or hindering the ability to attract a qualified workforce.
Recommendations related to Efficiency Savings
New York State and City should eliminate the reimbursement of Medicare Part B premiums for retirees, as it is a costly fringe benefit rarely offered by other employers.
New York City should fully eliminate all Medicare Part B reimbursements to close more than 10 percent of the current budget gap without affecting essential services.
The State and the City should increase premiums for retiree health insurance to 50 percent of the cost to relieve the burdens of rampant cost escalations.
Key Data
$140 million
— Total costs of Medicare Part B reimbursements in New York State in fiscal year 2010.
$213 million
— Total Medicare Part B reimbursements in New York City in fiscal year 2010.
$312 million
— Projected cost of Medicare Part B reimbursements in New York City by 2014.
$20 million
— Minor relief provided by limiting reimbursements to 90 percent for individual coverage and 75 percent for family coverage in the State.
$96.40
— Base monthly premium for Medicare Part B.
$350
— Monthly premium for retirees with greater incomes.
New York State's Medicaid program is the most expensive in the nation, with spending per capita reaching $2,283 in 2007, driven largely by high costs in long-term care and community rehabilitation services. To address this, the state has implemented various cost-containment initiatives, such as hospital reimbursement reforms and drug review programs, though further analysis is required to manage ongoing expenditure growth.
Recommendations related to Efficiency Savings
The state should examine the causes of substantial spending increases in non-institutional long-term care services to determine whether cost containment and program management actions are warranted.
Policymakers should further analyze the growth in prescription drug spending, particularly given the implementation of the Medicare Part D program and the increased use of generic drugs.
The state should continue to monitor the impact of budget initiatives implemented since 2008 to reduce the cost base for inpatient hospital services.
Officials should investigate the reasons behind the dramatic increase in spending for OMR Waiver Services to determine if cost containment actions are warranted.
The state should further consider the programs analyzed in this report for additional cost containment initiatives to more effectively manage the overall growth in the Medicaid program.
Key Data
$50 billion
— Total Medicaid spending in New York State, projected to grow to $53 billion in State Fiscal Year 2010-11.
$2,283
— NYS Medicaid spending per capita in Federal Fiscal Year 2007, which was the nation's highest.
$8,450
— NYS spending per enrollee in Federal Fiscal Year 2007, the second highest nationally.
$225 million
— Expected annual spending reduction from inpatient hospital reimbursement modifications enacted in December 2009.
$289 million
— Gross savings attributable to the Preferred Drug Program in State Fiscal Year 2008-09.
$1.02 billion
— Annual reported cost savings (State share) achieved by the Office of the Medicaid Inspector General in State Fiscal Year 2009-10.
Implementing state spending caps requires careful design to avoid unintended consequences like shifting costs to local governments or creating rigid budgetary constraints that hinder economic response. Instead of formulaic caps, alternative fiscal strategies such as rigorous balanced budget requirements, accrual-based accounting, and enhanced rainy day funds offer more effective paths to controlling state spending.
Recommendations related to Efficiency Savings
Establish a more rigorous and comprehensive balanced budget requirement.
Move the executive and legislative budgets from a cash basis to an accrual system in accordance with generally accepted accounting principles.
Enhance the allowable size of the state’s rainy day fund and require that funds are dispersed only in an emergency.
Impose a new constitutional debt limit to rein in state borrowing.
Provide more timely and meaningful fiscal information to legislators and to the public.
Key Data
5.4 percent
— Average annual rate of increase for the state operating budget over the past 25 years.
2.9 percent
— Average national inflation rate over the past 25 years.
$17 billion
— Amount the Governor argues his spending cap would have curbed state spending by in State fiscal year 2007-08.
$3.2 billion
— Total amount of rebate checks Colorado sent to taxpayers between fiscal year 1996-97 and fiscal year 2000-01.
56 percent
— Increase in the number of local special districts in Colorado between 1996 and 2007.
$1.1 billion
— Amount Connecticut borrowed at the end of the year for an unexpected deficit.
New York City's municipal union welfare funds, which receive $1 billion in annual taxpayer contributions, suffer from poor management and inefficiency that could be addressed through consolidation and centralized administration. Implementing these reforms would improve accountability and generate significant annual savings by leveraging economies of scale for health and non-health benefits.
Recommendations related to Efficiency Savings
Consolidate Supplementary Health Care Benefits Under the City's Health Insurance Plan to achieve estimated annual savings of about $146 million.
Provide Non-Health-Related Benefits Through a Centralized Cafeteria Plan to create meaningful economies of scale.
Improve Accountability for any Remaining Union Welfare Fund Expenditures by expanding the Comptroller's authority to oversee and sanction funds that fail to meet performance standards.
Key Data
$1 billion
— Annual taxpayer contributions to municipal union welfare funds.
81
— Total number of municipal union welfare funds established by 58 unions.
4 to 7 percent
— Average annual increase in payments to welfare funds, which has far exceeded inflation.
$146 million
— Estimated annual savings from consolidating supplementary health care benefits under the City's health insurance plan.
8 to 16 percent
— 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 excessive administrative costs, high reserves, or signs of insolvency.
The current system of multiple, independent union welfare funds for municipal employees is inefficient, lacking accountability and economies of scale. Consolidating these benefits under the City's health insurance program and implementing a centralized cafeteria plan for non-health benefits could generate approximately $146 million in annual taxpayer savings while maintaining or improving benefits for workers.
Recommendations related to Efficiency Savings
The varying and inefficient package of drug, dental and optical benefits provided by the multiple welfare funds should be replaced by a standard set of benefits included under the City’s health insurance program.
For non-health related benefits, a new centralized plan should be developed that could be administered by the City through the existing benefit offices in the Office of Labor Relations or by a coalition of unions.
New standards should be set to improve accountability for existing and any new union welfare benefit funds.
Limits should be placed on allowable administrative expenditures for union welfare funds.
New reserve requirements should be established for union welfare funds.
New enforcement powers should be given to the Comptroller to sanction entities that fail to meet standards in an adequate or timely fashion.
Repeated violations of standards by welfare funds should result in the removal of fund officials.
Key Data
$1 billion
— Annual City payments to union welfare funds.
$146 million
— Total estimated annual savings from consolidating supplementary health benefits and administrative functions.
$12.7 million
— Estimated annual administrative savings from consolidating welfare funds.
$90 million
— Estimated savings from using formularies for pharmaceutical benefits.
$135 million
— Estimated total benefits savings from consolidating health-related benefits.
83 percent
— Percentage of total City payments to welfare funds accounted for by ten large unions.
New York City balanced its fiscal year 2011 budget by utilizing $3.6 billion in surplus funds from the previous year, but faces a projected $4.6 billion gap in fiscal year 2012 as these reserves are exhausted. To address long-term fiscal sustainability, the city should reform public employee fringe benefits and scale back its $43.5 billion capital commitment plan to focus on essential infrastructure repairs.
Recommendations related to Efficiency Savings
The City should reform health care and retirement benefits to bring them more in line with those of the private sector to achieve significant savings.
The City should require employee contributions to health care premiums of 10 percent for individuals, 25 percent for families, and 50 percent for retirees to save over $1 billion annually.
The City should create a new pension tier that requires greater employee contributions and a longer vesting period to save $200 million annually.
The City should scale back the capital commitment plan to focus on key priorities like state-of-good-repair work.
The City should focus capital spending on state-of-good-repair work on the City's aging infrastructure while trimming back less urgent development projects.
Key Data
$4.6 billion
— The projected gap between expenditures and revenues in fiscal year 2012.
$43.5 billion
— The total capital commitment plan for fiscal years 2010-2014.
$1 billion
— The estimated annual savings from requiring employee contributions to health care premiums.
6.3 percent
— The rate at which expenditures grew in fiscal year 2011 compared to the previous year, after adjusting for prepayments and drawdowns.
4,200
— The number of jobs lost as part of the Program to Eliminate the Gap.
New York City's fiscal plan for 2011 requires structural changes to public employee benefits and a reduction in the capital program to ensure long-term competitiveness and fiscal stability. By reforming pension and health insurance contributions and scaling back non-essential capital projects, the City can achieve significant recurring savings and avoid unnecessary debt.
Recommendations related to Efficiency Savings
The Council should support the Mayor’s efforts to bargain with municipal labor unions for contributions to health insurance premiums and to lobby the State Legislature for pension reform.
The City should require employee contributions for health insurance that are comparable to other public and private sector employers.
The Council should support reforming the pension package for new employees to require greater employee contributions and a longer vesting period.
The City should reject the drawdown from the Retiree Health Benefits Trust and reserve those funds for their original purpose of paying for retiree health benefits.
It is imperative that the ambition of the capital agenda be scaled back to align with the belt-tightening occurring in the operating budget.
Key Data
$1.3 billion
— Recurring expenditure savings included in the program to eliminate the budget gap.
$1 billion
— Potential annual savings from requiring employee contributions of 10 percent for individual coverage, 25 percent for dependents, and 50 percent for retirees.
$65 billion
— Accrued future liability associated with retiree health benefits.
$8.7 billion
— Projected debt service increase from $6.2 billion, representing a 9 percent annual growth rate.
$43.5 billion
— Total capital commitment plan for fiscal years 2010-2014.
$700 million
— Increase in the capital commitment plan from the version released in January.
New York State faces significant fiscal challenges requiring immediate spending reductions in school aid and health care, rather than relying on speculative revenue or deficit financing. State leaders must prioritize structural reforms and fiscal discipline to avoid long-term debt and manage the projected multi-year deficits.
Recommendations related to Efficiency Savings
State leaders must achieve the full $5.1 billion worth of spending reductions proposed in the Executive Budget.
The final budget deal should drop overly optimistic claims regarding revenue from Medicaid fraud recoveries and Indian reservation tax collections.
The state must reduce the total borrowing for the year to well under the $2 billion maximum established by the Ravitch Plan.
Any agreed-upon borrowing must be accompanied by the reforms in the Ravitch Plan, specifically a balanced budget requirement and improved accounting practices.
School aid and health care spending must be part of the solution for spending reductions, as they comprise more than half of state-supported spending.
Key Data
$5.1 billion
— The total value of spending reductions in the Executive Budget that should be achieved in the final deal.
2 percent
— The reduction in per pupil spending proposed in the Executive Budget.
4 percent
— The scheduled raises for employee unions set for April 1.
$3.3 billion
— The expected increase in employee compensation over the four-year term of the financial plan.
$2 billion
— The maximum amount of deficit financing proposed in the Lt. Governor's five-year fiscal plan.
New York City could save $2 billion annually by implementing five efficiency measures, including adjusting health insurance contributions, standardizing workweeks, and reforming pension and overtime policies. These changes would allow the city to avoid large-scale layoffs of teachers, police officers, and firefighters while maintaining essential services.
Recommendations related to Efficiency Savings
The city should share costs for health insurance premiums with employees, retirees, and their dependents to align with private sector practices.
The city should adopt a 40-hour workweek for civilian municipal employees to reduce the number of positions needed to provide the same service.
The city should create a new pension tier for future workers to offer a more affordable benefits package.
The city should better manage overtime by replacing reliance on overtime with workers on regular schedules.
The city should stop paying teachers who do not teach by limiting time in the Absent Teacher Reserve and speeding up the review process for teachers pulled from classrooms.
Key Data
$2 billion
— The total amount that could be saved annually without reducing city services.
$3.4 billion
— The annual cost of the city's health insurance bill for employees, retirees, and dependents.
$500 million
— The annual savings generated by requiring civilian municipal employees to work a 40-hour workweek.
$1 billion
— The amount spent on city overtime in the previous year.
$165 million
— The annual savings from better managing overtime in city departments.
$100 million
— The annual cost of paying roughly 2,000 teachers who are not assigned to a classroom.
The Mayor's preliminary budget for fiscal years 2010 through 2014 aims to close a $4.1 billion gap through a combination of revenue increases, union contract renegotiations, and an agency program that targets $799 million in savings next year through the elimination of 4,286 positions. While the plan avoids broad tax increases, it faces challenges regarding unrealistic expectations for state aid, the preferential treatment of the Department of Education, and the depletion of the Retiree Health Benefits Trust.
Recommendations related to Efficiency Savings
The City needs to develop a realistic plan for how to deal with inevitable cuts in State aid rather than relying on an unrealistic baseline budget.
Policymakers should evaluate whether the Department of Education's exemption from staff reductions 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 link withdrawals to the growth in current year liabilities for retiree health insurance premiums.
The City should continue to seek a better bargain with public employee unions to secure longer-run commitments on pension and health insurance items that yield sizable savings.
Key Data
$4.1 billion
— The budget gap for fiscal year 2010-11 that the City plans to close.
$799 million
— The amount of savings the Agency Program is designed to yield in the next fiscal year.
4,286
— The number of jobs to be eliminated by the end of fiscal year 2011 under the Agency Program.
$1.3 billion
— The estimated fiscal year 2011 impact of the Executive Budget's proposed State aid cuts.
$1,149 million
— The total amount scheduled to be used from the Retiree Health Benefits Trust in fiscal years 2010 through 2012.
$371 million
— The savings the Agency Program is designed to yield in the current year.
New York City's projected $4.1 billion budget gap should not be addressed through one-shot measures like the $395 million drawdown from a retiree health insurance trust fund or by relying on $500 million in assumed labor union concessions. Instead, the city must prioritize structural cost-cutting rather than using unexpected tax revenue to avoid necessary fiscal discipline.
Recommendations related to Efficiency Savings
The city must not allow additional tax revenue to serve as an excuse to avoid needed cost-cutting.
The city should avoid one-shot measures, such as the $395 million drawdown from a retiree health insurance trust fund, to balance the budget.
Key Data
$4.1 billion
— Projected budget gap for New York City.
$395 million
— Drawdown from a retiree health insurance trust fund that should be avoided.
$200 million
— New pollution-remediation operating expenses that were previously capitalized.
$500 million
— Assumed future concessions from labor unions included in the mayor's plan.
New York City could save nearly $1.4 billion annually by aligning its employee health insurance contributions with those of private sector firms. Converting to defined contribution pension plans for future hires would also generate substantial long-term savings for the city.
Recommendations related to Efficiency Savings
The City should require from its current workers contributions toward health insurance premiums equal to the amounts paid by employees of local private firms in the survey to achieve annual savings of about $628 million.
The City should implement a policy requiring retirees to contribute toward health insurance premiums, which would generate annual savings of $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.
Key Data
$1.4 billion
— Annual savings for the City of New York by aligning its health insurance benefits with those of local private sector firms.
$628 million
— Annual savings to taxpayers if the City required current workers to contribute toward health insurance premiums equal to amounts paid by private sector employees.
$741 million
— Annual savings to taxpayers if the City required retirees to contribute toward health insurance premiums.
$10.4 billion
— Total annual cost to New York City taxpayers for pension and health insurance benefits.
90 percent
— Percentage of surveyed private firms that offered a defined contribution pension plan.
Public-private partnerships offer a mechanism to improve infrastructure management by leveraging private sector expertise to enhance operations and reduce long-term costs. By focusing on assets with poor maintenance histories and prioritizing life-cycle efficiency, these partnerships can provide a viable alternative to traditional public-sector infrastructure delivery.
Recommendations related to Efficiency Savings
PPPs should be focused on achieving efficiencies in the life-cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public-sector operation.
PPPs are well-suited to revenue-generating facilities, but user fees are not essential for a PPP.
PPPs need not be limited to large facilities; smaller assets can work as well when several similar assets are grouped together for a partnership with a single private partner.
New York’s leaders should focus on assets that are in poor condition and have a history of poor maintenance.
Large up-front payments should be avoided, as the temptations to use the proceeds for political expedient purposes or short-term budgetary balance, rather than for infrastructure investment, are too great.
Key Data
$1.8 billion
— The contract value to build the Airtrain from Kennedy Airport to the Jamaica Station of the Long Island Rail Road.
New York State could save $1.2 billion annually by modernizing its nursing home Medicaid payment system, which currently relies on outdated, facility-specific historic costs that do not incentivize quality care. Transitioning to a standardized, performance-based model that adjusts for regional labor costs and patient needs would align spending with national norms while ensuring better staffing and health outcomes.
Recommendations related to Efficiency Savings
New York State should set base rates linked to competitive national standards rather than historic costs to improve efficiency.
The state should adjust base rates for case-mix and regional labor costs to ensure payments reflect actual patient needs and local economic conditions.
New York should enforce staffing standards requiring 4.1 hours of total nursing care per patient per day to ensure patient safety.
The state should implement a robust accountability system including electronic payroll filings to ensure that paid staffing levels are actually provided.
New York should implement financial incentives such as "pay-for-performance" initiatives to reward nursing homes that meet quality outcome goals.
Key Data
$1.2 billion
— Annual savings achievable by changing the Medicaid payment system for nursing homes.
$45 billion
— Projected cost of New York's Medicaid program in fiscal year 2008-09.
$187
— Average daily Medicaid payment to nursing homes in New York.
$130
— Average daily Medicaid payment to nursing homes in the rest of the nation.
$1.2 billion
— Annual cost of avoidable hospitalizations for nursing home patients.
4.1 hours
— Federally recommended level of total nursing care per patient per day.
New York can achieve significant budget savings by eliminating ineffective programs like the Empire Zones and reducing aid to wealthy school districts, rather than cutting valuable public services. Additional fiscal discipline can be realized through operational reforms in correctional facilities, pension adjustments for new employees, and increasing state employee work hours.
Recommendations related to Efficiency Savings
The state should eliminate the Empire Zones program for annual savings of $582 million.
The state should scale back the Centers of Excellence high-tech-promotion program to save taxpayers $244 million annually.
The state should close unneeded correctional facilities for annual savings of about $310 million.
The state should create a new "tier" for future employees' pension benefits to save $216 million annually.
The state should eliminate state aid to the wealthiest school districts to save $389 million annually.
The state should increase the work week for state employees to 40 hours to save $227 million.
The state should develop a comprehensive capital plan to help provide greater spending discipline, saving $96 million by the third year.
The state should cut member items (pork for individual legislators) by 100 percent.
Key Data
$582 million
— Annual savings from eliminating the Empire Zones program.
$244 million
— Annual savings from scaling back the Centers of Excellence high-tech-promotion program.
$310 million
— Annual savings from closing unneeded correctional facilities.
$216 million
— Annual savings from creating a new "tier" for future employees' pension benefits.
$389 million
— Annual savings from eliminating state aid to the wealthiest school districts.
$227 million
— Annual savings from increasing the work week for state employees to 40 hours.
New York can save nearly $300 million annually by aligning its prison infrastructure with the current inmate population, while an additional $100 million could be saved by developing effective alternatives to incarceration for drug offenders. Closing underutilized facilities and reducing the number of correctional officers is essential to reallocating funds toward more productive investments like schools and economic development.
Recommendations related to Efficiency Savings
Unneeded correctional facilities should be closed and repurposed for other uses.
The state should reduce the number of correctional officers to align with the declining inmate population.
New York should fit the size of the prison infrastructure to the population it currently serves to achieve significant annual savings.
The state should develop more effective and appropriate alternatives to incarceration for drug offenders to generate additional cost savings.
Key Data
$300 million
— Estimated annual savings from fitting the size of the prison infrastructure to the population it serves.
$100 million
— Estimated annual savings from developing more effective and appropriate alternatives to incarceration for drug offenders.
$57,000
— Annual cost of keeping one person in the custody of the prison system, including debt service and fringe benefits.
$3.6 billion
— Annual operating cost of the entire New York prison system.
New York State faces significant budget gaps that require finding $6 billion to $7 billion in annual savings to avoid tax increases. By reforming Medicaid, restructuring state employee fringe benefits, and eliminating ineffective economic development programs, the state can achieve these savings without reducing essential services.
Recommendations related to Efficiency Savings
The state should reduce non-competitive institutional rates like those paid to nursing homes.
The state should close eligibility loopholes for individuals with significant personal assets.
The state should limit how many hours of “personal care services” the state’s Medicaid program will cover.
The state should require an additional 4 percent contribution toward family plan premiums from current workers.
The state should eliminate repayment for Medicare Part B premiums for retirees.
The state should change the pension benefits for future employees by creating a new tier for them.
The state should cut the Empire Zones program from the budget.
The state should scale back the Centers of Excellence program to cover only SUNY/Albany.
The state should shrink the size of the prison system to reflect the 11 percent drop in the number of inmates since 1999.
The state should increase the work week for state employees to 40 hours from 37.5.
Key Data
$2 billion
— Annual savings generated from Medicaid reforms.
$1.1 billion
— Annual savings generated from restructuring fringe benefits for state employees.
$800 million
— Annual savings generated from cutting ineffective economic development programs.
$7,910
— New York's Medicaid spending per beneficiary.
69 percent
— Amount by which New York's Medicaid spending per beneficiary exceeds the national average.
$558 million
— Tax credits given away through the Empire Zone program in 2007.
New York's high local tax burden is driven by factors such as school finance inequities, Medicaid mandates, and a fragmented government structure that leads to high labor costs. To address these issues, the state should consider strategies like consolidating local government units, reforming pension benefits, and shifting Medicaid financing to the state level.
Recommendations related to Efficiency Savings
The current unnecessarily expensive pension system should be reformed by converting to a defined contribution rather than a defined benefit system or making the current defined benefit system more reasonable.
New York might benefit from using resolution processes other than the current system of arbitration, such as 'last-best offer' negotiations.
The State might also benefit from consolidation in its property tax assessment units.
Consolidating central administrative offices for school districts of all sizes and sharing transportation services could reduce costs.
A complete state takeover of local Medicaid expenses would ameliorate the fiscal burden on counties.
Key Data
$435 million
— Total potential savings from consolidating school districts with less than 1,500 pupils.
$748 million
— Savings for counties and New York City if New York reduced Medicaid rates, tightened eligibility, and utilized more managed care.
$1.2 billion
— Amount the total school property tax levy would be less in the State if a cap on full value school property tax rate were implemented.
$4.7 billion
— Total school property tax relief spending in fiscal year 2007-08.
$2.5 billion
— Cost of a circuit breaker program that refunded property taxes above 5% of NYAGI for homeowners earning less than $20,000 and above 7% for others.
$2.7 billion
— Cost of a circuit breaker program for renters that refunded property taxes in excess of 6% of NYAGI.
New York State faces significant future budget gaps, necessitating a strategic approach to reduce spending through targeted reforms in areas like school aid, Medicaid, and employee benefits. By implementing structural changes such as streamlining government operations, restructuring pension and health benefits, and eliminating ineffective economic development programs, the state could achieve $5.4 billion in annual savings.
Recommendations related to Efficiency Savings
The State should phase out aid for the wealthiest top 10% of school districts to eliminate unnecessary and ineffective spending.
New York should reduce non-competitive institutional rates paid to hospitals and nursing homes to bring them closer to national norms.
The State should increase the work week for non-managerial, civilian employees to 40 hours to allow for productivity gains through a reduction of the workforce.
State agencies should streamline purchasing and other back office functions to eliminate duplicative processes and reduce operational costs.
The State should close unnecessary correctional facilities and fit the size of prison infrastructure to the population that needs it.
Key Data
$5.4 billion
— Total estimated annual savings if all proposed budgetary options are implemented.
$78.7 billion
— New York's cash spending in fiscal year 2007-08, excluding federal aid or capital outlays.
$7,910
— New York's Medicaid spending per beneficiary, which is nearly 69 percent above the national average.
$138.8 billion
— Estimated value of capital assets and infrastructure owned by the State and its public authorities.
$558 million
— Tax revenue foregone by the Empire Zones program in calendar year 2007.
$2.7 billion
— Off-budget capital spending in fiscal year 2007-08.
New York City's current performance management framework relies heavily on output measures rather than outcomes, with only 4 of 42 efficiency indicators tracked by the ICMA being reported by the City. To improve accountability and service quality, the City should better align its budget with program performance, prioritize efficiency measurement, and incorporate citizen satisfaction data.
Recommendations related to Efficiency Savings
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 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.
The City should develop and present comparative performance measures so New Yorkers can compare the caliber of their services to those provided by other competitor cities.
City leaders should expand the use of citizen-derived outcome measures by measuring public perception of City services through satisfaction surveys.
Key Data
4
— Number of efficiency indicators reported by New York City out of 42 total indicators published by the ICMA.
354
— Number of output measures reported by New York City for 41 agencies.
140
— Number of outcome measures reported by New York City for 41 agencies.
13.2 million
— Total calls handled by the 3-1-1 service center in fiscal year 2006.
14 seconds
— Average wait time for calls to the 3-1-1 service center in fiscal year 2006.
45,000
— Average number of calls handled by the 3-1-1 service center per day.
New York State can generate at least $1.2 billion annually for education reform by eliminating system inefficiencies, such as consolidating small school districts and reallocating aid from wealthy districts. Beyond these savings, the state should consider expanding gambling and broadening the tax base to fund necessary reforms without compromising its economic competitiveness.
Recommendations related to Efficiency Savings
Eliminating inefficiencies in the system could generate at least $1.2 billion annually through changes like using teacher time more efficiently and consolidating smaller school districts.
Expanding gambling activities could generate an additional $2 billion as a preferable alternative to tax increases.
Broadening the tax base through increased enforcement of sales tax on remote purchases, extending the sales tax to professional services, and revising the corporate income tax could raise up to $2.6 billion a year.
The State should eliminate or reduce aid to wealthy districts with a tax base large enough to generate the full cost of a sound basic education, which could save about $750 million.
Correcting inefficiencies related to teacher contracts and small school district consolidation would yield savings of almost $500 million.
Key Data
$1.2 billion
— Annual savings generated by eliminating inefficiencies in the education system.
$2 billion
— Additional revenue that could be generated by expanding gambling activities.
$2.6 billion
— Potential annual revenue from broadening the tax base through increased enforcement of sales tax on remote purchases, extending the sales tax to professional services, and revising the corporate income tax.
$750 million
— Potential savings if the State eliminated or reduced aid to wealthy districts with a tax base large enough to generate the full cost of a sound basic education.
$500 million
— Savings yielded by correcting inefficiencies related to teacher contracts and small school district consolidation.
$10,665
— Average per pupil spending in New York State after adjusting for regional cost differences.
New York City needs to improve its performance management by better aligning its budget with program goals and implementing more rigorous efficiency and outcome measures. By adopting comparative benchmarking and expanding resident satisfaction surveys, the city can enhance accountability and ensure public resources are used effectively.
Recommendations related to Efficiency Savings
The budget should be reorganized to better align with programs and program performance.
Measuring and reporting unit-cost measures should be a high priority in every service area.
Leaders should push to develop and track desired end result measures in every service area.
New York City should compare its performance to competitor jurisdictions by joining the ICMA Center for Performance Measurement and developing its own system for comparing performance information.
Public perception of City services should be expanded by conducting periodic broad satisfaction surveys and reporting the results to the public.
Key Data
24
— Number of the 30 largest U.S. cities that publish performance metrics in their budgets.
13.2 million
— Number of calls handled by the 3-1-1 system in fiscal year 2006.
15
— Number of the 30 largest U.S. cities that use resident satisfaction survey measures in their performance reporting.
33%
— Percentage of local governments that report using survey results to make policy decisions.
1,000
— Number of performance statistics included in the Mayor's Management Report.
40
— Number of agencies covered by the Mayor's Management Report.
The Metropolitan Transportation Authority faces a significant financial shortfall due to heavy borrowing and a lack of productivity savings, necessitating a shift in policy to ensure long-term stability. To address these issues, the authority must implement productivity initiatives to reduce costs and rebalance its revenue sources through higher fares, taxes, and tolls.
Recommendations related to Efficiency Savings
The M.T.A. should make a greater commitment to productivity enhancements in order to reduce the rate of cost increases.
The authority could save about $900 million per year by enacting productivity initiatives equal to the 2.5 percent average annual productivity gains achieved in the private sector.
Key Data
$900 million
— Annual savings potential for the M.T.A. by enacting productivity initiatives equal to private sector gains.
2.5 percent
— Average annual productivity gains achieved in the private sector.
25 percent
— Projected increase in M.T.A. expenditures over the next four years.
$1 billion
— M.T.A.'s projected budget gap in 2008.
$2.1 billion
— M.T.A.'s projected budget shortfall in 2010.
$32 billion
— Projected M.T.A. outstanding debt by the end of 2010.
New York State faces significant fiscal challenges, including high local tax burdens driven by Medicaid mandates and inefficient school aid, as well as excessive state debt and a lack of budget transparency. To address these issues, the state should implement reforms such as reducing Medicaid expenditures, redesigning pension benefits, and improving multi-year financial planning to ensure long-term fiscal stability.
Recommendations related to Efficiency Savings
Reduce State-mandated local government Medicaid costs more than authorized by the 3 percent cap on local growth enacted in 2005.
Redesign the State-mandated pension benefits for future state and local government workers through changes such as raising the minimum retirement ages, increasing the required employee contributions, eliminating inclusion of overtime in benefit calculations, and eliminating variable supplements for uniformed workers.
Discontinue issuance of State-funded debt to cover operating deficits.
Lower Medicaid expenditures by eliminating long-term care eligibility loopholes that extend benefits to middle-class residents.
Integrate public authorities’ proposed borrowing for capital investments with the State’s capital plan in order to prevent inefficient use of borrowing capacity.
Key Data
$5.8 billion
— Estimated annual savings from changing Medicaid policies.
$1.1 billion
— Amount added in expenditures by the Legislature in June 2006.
$4.2 billion
— Projected budget gap in the next fiscal year.
$105.8 billion
— Estimated total debt outstanding at the end of fiscal year 2004–05.
$11.5 billion
— Amount of outstanding State supported debt used to pay for operating expenses.
The Metropolitan Transportation Authority faces growing deficits that require a combination of fare increases, higher subsidies, and increased cross-subsidies from auto users to achieve financial stability. Implementing productivity initiatives to reduce operating costs and restructuring capital investments are essential steps to avoid a return to the fiscal instability of the 1970s.
Recommendations related to Efficiency Savings
The cost of bridge and tunnel facilities should be paid for entirely through user fees paid by motorists.
User fees paid by motorists should also generate a surplus large enough to cover one-quarter of the cost of providing mass transit services.
Mass transit users should pay fares sufficient to cover one-half the operating cost of those services.
State and local subsidies to mass transit should cover one-quarter of the operating cost of those services and fund "catch-up" capital investments.
The MTA should implement a program of productivity initiatives that reduce operating costs from the baseline level by 2 percent in 2006 and by 2.5 percent annually in each year from 2007 through 2009.
Key Data
$9,781 million
— Total MTA operating expenses in 2005.
$22 billion
— Total MTA debt outstanding at the end of 2005.
$3.5 billion
— Projected MTA deficit in 2009 under the baseline scenario.
2.5%
— Annual reduction in operating costs from baseline levels targeted by productivity initiatives from 2007 through 2009.
22%
— Required fare increase by 2009 to close the budget gap under the cost-saving scenario.
New York State should implement aggressive productivity programs and eliminate ineffective spending, such as member items and excessive Medicaid costs, to achieve fiscal stability. By reducing the state workforce through attrition and closing eligibility loopholes, the state could realize significant savings and improve long-term fiscal health.
Recommendations related to Efficiency Savings
The State should launch an aggressive productivity program to improve efficiency.
A top-to-bottom operations review in state agencies should be conducted to enable efficiency gains.
Member items, and their equivalent for the Governor, should be eliminated to improve fiscal accountability.
The Legislature should reject proposals for STAR-Plus and Co-STAR as they are poorly targeted and fail to provide relief where it is most needed.
The Legislature should reject the proposal for pension borrowing, as it would erode the long-run health of the system.
Key Data
13,843
— The number of full-time equivalent employees in New York State government decreased between fiscal year 1995 and 2005.
$400 million
— Estimated savings possible if the workforce in specific agencies were reduced through attrition at the same rate as other agencies.
$2.4 billion
— The estimated annual combined reduction in federal and State spending from the Governor’s proposals.
$600 million
— Estimated annual savings from closing loopholes in eligibility rules for long-term care such as nursing homes and personal care.
$1 billion
— Estimated annual savings from bringing the use of personal care services more in line with national norms.
$2.5 billion
— The largest source of annual Medicaid savings, achieved by reducing rates paid to hospitals, nursing homes, and other institutional providers.
New York State can achieve significant savings in its educational system by reallocating state aid away from wealthy districts, optimizing teacher time, and consolidating small school districts. These measures, including capping administrative expenses, could redirect hundreds of millions of dollars toward providing a sound basic education where it is most needed.
Recommendations related to Efficiency Savings
The State should eliminate or redistribute aid that is poorly targeted to wealthy school districts.
The State should allocate funds in a way that creates greater equity in local tax effort to reduce the need for State aid.
New York City should reduce combined preparation and administrative periods for junior high and high school teachers from 10 to five per week.
New York City should reduce preparation periods for elementary school teachers from five to three per week.
New York City should eliminate sabbatical leaves for travel and study to increase instructional time.
New York City should eliminate subsidized time for union activities to increase instructional time.
The State should implement penalties or mandates to ensure school district consolidation occurs.
The State should set caps on administrative costs and oblige higher-cost districts to bring their spending closer to the statewide average.
Key Data
$750 million
— Amount of state aid currently misallocated to wealthy school districts.
$475 million
— Annual savings from correcting teacher time and administrative inefficiencies.
$350,000,000
— Savings from reallocating teacher time in New York City.
$126 million
— Total annual savings from school district consolidation and administrative cost caps.
$100 million
— Annual savings from consolidating small school districts.
$26.0 million
— Annual savings from applying both administrative cost caps.
New York's Medicaid program has experienced rapid spending growth, with costs per enrollee nearly double the national average. By tightening eligibility loopholes, aligning provider payment rates with competitive benchmarks, and expanding managed care, the state could achieve approximately $4.6 billion in annual savings without compromising access to necessary care for low-income residents.
Recommendations related to Efficiency Savings
More careful design and better enforcement of eligibility rules for the elderly and disabled will reduce the number of such people receiving Medicaid funded nursing home and home care services.
Limiting Medicaid provider payments to rates based on competitive costs would save about $2.5 billion annually.
A suitable goal would be to enroll about one-third of the elderly and disabled eligibles, or about 350,000 individuals, in a managed care plan.
Bringing use of personal care services more in line with national norms would save about $1.0 billion annually.
The policy objective to which hospital leaders should adjust is a smaller role for New York hospitals in graduate medical education, rather than continued extra financial support in order to play the bigger educational role.
Key Data
$4.6 billion
— Total annual savings that could be achieved by reversing the trend in Medicaid spending.
$7,646
— New York's annual cost per person enrolled in the Medicaid program.
$3,936
— The national average annual cost per person enrolled in Medicaid.
$608 million
— Annual savings from more careful design and enforcement of eligibility rules for the elderly and disabled.
$2.5 billion
— Annual savings from limiting Medicaid provider payments to rates based on competitive costs.
$1.0 billion
— Annual savings from bringing the use of personal care services more in line with national norms.
New York State faces a significant fiscal crisis requiring a multi-year plan to align expenditures with recurring revenues through productivity improvements and targeted spending reductions. Rather than relying on long-term borrowing or permanent tax increases, the state should implement structural reforms to streamline operations and reduce the high combined state and local tax burden.
Recommendations related to Efficiency Savings
The State should prioritize improving productivity as the first order of business in reducing expenditures.
New York State could save $100 million per year without jeopardizing public safety by expanding well-tested programs that substitute drug treatment and other alternatives for the later part of prison sentences.
The judiciary should be modernized through reforms that would save $130 million annually by simplifying the structure of the court system, streamlining the process for handling domestic violence, and restructuring family court.
Collective bargaining should be used to enhance labor productivity by obtaining work rule and benefit changes that preserve service and save money.
The State should be required to balance its budget based on Generally Accepted Accounting Principles (GAAP) in order to prevent the accumulation of a deficit.
The Division of Budget should be required to prepare a four-year financial plan with quarterly updates to improve fiscal transparency.
All off-budget accounts should be brought on budget to eliminate the use of off-budget accounts, such as the large ones for health care.
Key Data
$100 million
— Annual savings potential from expanding drug treatment and alternatives to prison sentences.
$130 million
— Annual savings potential from modernizing the judiciary and simplifying the court system.
$250 million
— Annual savings from a 2 percent productivity gain in spending for State operations.
$750 million
— Total savings over a three-year plan from a 2 percent productivity gain in State operations.
10,000
— Reduction in Executive branch headcount expected from the hiring freeze between November 2001 and March 2004.
128,000
— Number of employees represented by the Public Employees Federation and Civil Service Employees Association.
New York City can achieve $1 billion in annual savings by implementing structural reforms, including standardizing a 40-hour work week for civilian employees, streamlining procurement processes, and restructuring special education and police staffing. These measures, alongside improved energy conservation, offer a path to fiscal stability without relying on temporary budget fixes or service cuts.
Recommendations related to Efficiency Savings
The City should require civilian employees not currently working a 40-hour week to adopt a 40-hour work week to allow for a reduction in the total number of positions.
New York City should replace the Mayor’s Office of Contracts with a new procurement entity to offer “one-stop” oversight and a central place for vendors to interact with the City.
The City should implement an advanced e-procurement system to lower transaction costs and secure lower prices from vendors.
The City should move students from restrictive special education settings to less restrictive environments to bring placement patterns in line with the rest of New York State.
The City should reduce special education placements by using more preventive services in regular classrooms.
The Police Department should reschedule the work day to increase time in law enforcement and decrease paid time for changing uniforms.
The Police Department should reassign officers from jobs better done by civilians to law enforcement duties.
The Police Department should stop using officers on overtime to perform duties that are predictable and could be scheduled in advance.
Responsibility for energy conservation in City agencies should be centralized within the Office of the Mayor.
The City should offer incentives to agencies and individuals to conserve energy and reward those making exemplary contributions.
Key Data
$498 million
— Annual savings from requiring civilian employees to work a 40-hour week.
$197 million
— Annual savings from streamlining the City's procurement process.
$267 million
— Annual savings from restructuring special education services.
$251 million
— Annual savings from implementing more rational staffing at the Police Department.
$47 million
— Annual savings from implementing energy conservation measures at municipal agencies.
$1 billion
— Total annual savings from the five proposed ways to lower the cost of government.
Moving New York City's 80,000 non-managerial civilian employees from a 35-hour to a 40-hour workweek could eliminate 8,500 positions and generate approximately $498 million in annual savings. This shift, which aligns municipal work hours with private sector and other public sector norms, would require strategies like broad-banding job titles and consolidating work locations to maintain service levels with fewer staff.
Recommendations related to Efficiency Savings
Those civilians not working a 40-hour week should be required to work a 40-hour week.
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 those 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 would be more efficiently met by increasing part-time staff during the peak periods.
The City should reject gain-sharing arrangements for the 40-hour week because the City's fiscal problems are currently severe and the 40-hour week is the norm among many other public sector and private sector workers.
Key Data
$498 million
— Estimated annual savings to the City from moving non-managerial civilian employees to a 40-hour workweek.
8,500
— Number of positions that could be eliminated if all non-managerial civilians worked a 40-hour week.
$58,000
— Average annual savings per worker, including salary, fringe benefits, and space costs.
80,000
— Number of full-time 'non-managerial civilian' employees in the City of New York.
1,556
— Number of different work locations for civilian, non-managerial employees.
$200 million
— Annual savings identified in a separate report from streamlining the procurement process.
New York City's procurement process is hampered by excessive bureaucracy and paper-based systems, resulting in long contract cycles and high administrative costs. Implementing a centralized procurement entity, an advanced e-procurement system, and updated legal frameworks could save the city between $135 million and $197 million annually.
Recommendations related to Efficiency Savings
Replace the Mayor’s Office of Contracts with a new procurement entity that offers “one-stop” oversight, a central place for vendors to interact with the City, and improved agency support services.
Implement an advanced e-procurement system similar to those functioning in several other jurisdictions.
Change the legal framework for procurement to give the Procurement Policy Board more independence and to permit new, cost-effective procurement techniques.
Small purchase limits for all goods and services should be increased to $100,000.
Public hearings for non-competitively bid purchases should be required only for procurements above $500,000.
Permit the use of reverse auctions for some commodities.
Key Data
$8.6 billion
— Total spent by the City on construction, goods, and services in fiscal year 2001.
12 million
— Estimated number of sheets of paper produced to execute procurements.
$135 million
— Minimum annual savings from implementing the recommended procurement reforms.
$197 million
— Likely annual savings from implementing the recommended procurement reforms.
$75
— Estimated savings per transaction from an advanced e-procurement system.
142,000
— Number of procurement transactions the City completes per year.
New York State's fragmented health insurance subsidy programs suffer from high administrative costs and inefficient eligibility processes that often deny coverage to eligible residents. To improve efficiency and reach, the state should integrate eligibility determination systems, establish a statewide master eligibility file, and coordinate with other means-tested programs like Food Stamps and the Earned Income Tax Credit.
Recommendations related to Efficiency Savings
The Governor and Health Commissioner should pursue a two-stage strategy where eligibility determination for the major health insurance programs is integrated in a new system created independent of the current public assistance eligibility bureaucracy.
The administration of this new system should rely on community-based organizations following the recently developed model of 'facilitated enrollment' to handle interviewing and documentation.
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
— The cost of 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
10 percent
— Total administrative costs borne by the State and health plans for the Child Health Plus program.
$248 million
— The administrative costs of public assistance in New York City in fiscal year 2000.
$432
— The administrative cost per recipient for public assistance in New York City in fiscal year 2000.
$929
— The administrative cost per case for public assistance in New York City in fiscal year 2000.
$117
— The cost per recipient for 'Medicaid-only' eligibility offices in New York City in fiscal year 2000.
The 2002 state and city budget report cards highlight a failure to implement necessary productivity improvements and structural reforms, resulting in poor grades for effective budgeting. Both levels of government are criticized for postponing critical decisions on service delivery and infrastructure, which threatens to harm government services and limit long-term efficiency.
Recommendations related to Efficiency Savings
The City should enact significant productivity improvements and invest wisely in its infrastructure to deliver more competitive services.
The City should improve its capital plan by using existing facilities more intensively, better maintaining assets, repealing the burdensome Wicks Law, and setting effective limits on borrowing.
The State should implement important budget reforms, such as managing the financial plan on a GAAP rather than cash basis and showing the enacted budget's impact on future years.
Key Data
$36 billion
— The total value of the City's five-year capital plan.
25 years
— The timeframe over which City headcount has increased to its highest levels.
124 days
— The amount of time the State's bare-bones budget was late.
8 percent
— The annual growth rate of City debt service payments over the next four years.
New York City's collective bargaining process should prioritize efficiency and service quality by restructuring pay to reward performance, modernizing health insurance through cost-sharing, and streamlining welfare fund administration. These reforms aim to reduce the unit cost of public services while providing competitive compensation to attract and retain a high-performing workforce.
Recommendations related to Efficiency Savings
Set pay levels in response to labor market conditions, with shortage occupations receiving greater wage increases than those occupations where abundant applicants are available.
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 premium cost-sharing and price competition.
Streamline the administration of welfare fund benefits to achieve economies of scale and greater oversight.
Restructure the pension system for newly employed workers to provide a defined contribution rather than a defined benefit.
Key Data
$138 million
— Estimated annual savings from five specific efficiency initiatives in the Fire Department.
$500 million
— Direct annual savings from implementing premium cost-sharing for municipal employee health insurance.
$129 million
— Projected savings in fiscal year 2002 from introducing price competition among health insurance plans.
$3.7 million
— Annual savings from reducing administrative costs for smaller union welfare funds.
$1.4 billion
— Net savings to taxpayers from implementing the collective bargaining recommendations.
$150 million
— Cost of well-targeted, one-time catch-up raises for municipal shortage occupations.
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