New York Mayor Bill de Blasio's preliminary $77.7 billion
"It's more or less of a status-quo budget," said Anthony Figliola, vice-president of Empire Government Strategies in Uniondale, N.Y. "Nothing jumps out that's glaring or grandiose, and there's nothing that would move the dial as far as the capital markets are concerned."
The 51-member City Council must approve the budget by June 30.
City Comptroller Scott Stringer said his office would continue to monitor the budget.
"The mayor's budget plan prudently holds the line on new spending but also recognizes that there are unmet needs that can and should be addressed," said Stringer.
The budget proposal had a public safety emphasis. Among other items, it added $11.3 million a year to add 45 ambulance tours and $6.7 million a year to add 149 emergency dispatchers; it also called for $11.5 million over two years to replace bullet-resistant police vests more than five years old.
Other public-safety measures include $35.5 million to reduce use-of-force incidents and violence and $3.6 million to improve applicant vetting and recruitment at the Department of Correction, and $10 million to expand the Police Cadet program.
The proposed budget would also seal a $1.8 billion deficit that city officials had projected in November, according to the mayor. It bumps city budget reserves to $750 million a year and reduces projected out-year deficits to $1 million in fiscal 2017 and $1.3 million and $2 million in the following years.
"These gaps will obviously need to be addressed and depending on the economy and that the risk the mayor focused on — they could obviously be increased, but important to note, these are low when compared to the past 13 years," said budget director Dean Fuleihan.
De Blasio warned about such economic risks as diminished state and federal aid and another possible economic downturn.
While the labor deals de Blasio reached in the last year with 71% of the workforce are "unaffordable" in the long term, the city can continue to borrow at record low rates, said Nicole Gelinas, a senior fellow with the Manhattan Institute for Policy Research.
"The capital markets have known about the labor deals for quite some time," she said.
The pushed-back costs of collective bargaining agreements will rise $1 billion for this year and $1 billion and $2 billion the following years. When de Blasio succeeded Michael Bloomberg in January 2014, all 152 municipal labor unions were operating on expired contracts.
De Blasio referenced praiseworthy comments from bond-rating agencies in his presentation.
"The city now has an element of certainty in its financial plan that it lacked in the past," wrote Standard & Poor's. S&P and Fitch Ratings rate the city's general obligation bonds AA. Moody's Investors Service assigns an Aa2 rating.
Contract settlements still remain to be finished with uniformed police and fire personnel.
Howard Cure, director of municipal bond credit research for Evercore Wealth Management, wonders if the earmarked reserve of $750 million per year through the out years is enough, should de Blasio settle generously with the police in an effort to soothe his fractious relationship with the department.
"The mayor doesn't want to go into the next election with a still-bad relationship with the police," he said.
Gelinas called it "still a little jarring" that the mayor projected a $2.7 billion rise in tax revenues while admonishing about the economic risks.
"Projecting is always tricky in New York," said Cure. New forms of compensation in the financial services industry further complicate the mix, he added. State aid for education poses another variable.
"There's always the city versus Long Island versus upstate New York," he said.
According to de Blasio, Gov. Andrew Cuomo's proposed executive budget continues to fall short of the Campaign for Fiscal Equity obligation to the city by $2.6 billion.
Figliola warned that because of parochialism, de Blasio should not expect a free pass from the council.
"If I'm a Democrat from the Bronx, I'm going to want projects for the Bronx," he said. "If I'm a councilman from Forest Hills, I only care about Forest Hills."
