De Blasio presents $89.1B executive budget, cites Albany and Washington squeeze

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New York Mayor Bill de Blasio cited hits from Albany and threats from Washington as he released his $89.06 billion fiscal 2019 executive budget on Thursday.

“We had a bad year in Albany,” de Blasio told reporters at a late-afternoon briefing in the City Hall Blue Room. "The Albany piece is a particular concern today, and what it means for our future."

The spending plan is up fractionally from the $88.67 billion preliminary budget he submitted in late January and 4.5% higher than the $85.2 billion plan de Blasio and the City Council approved last year.

The executive five-year capital commitment plan totals $82 billion in all funds.

About $530 million, or 25%, of new city funds in the operating budget had to cover a cut or shift from Albany, said the mayor.

That includes a forced payment of $254 million, not including capital expenses, toward the Metropolitan Transportation Authority's subway action plan, a $140 million school aid shortfall, a $108 million unfunded mandate to the Raise the Age program, and a $31 million cut to the Close to Home program. The latter two relate to juvenile justice.

De Blasio said the cuts surprised him, given traditional state election-year politics.

The state budget “places additional burdens on the city’s fiscal resources,” said Ana Champeny, director of city studies for the watchdog Citizens Budget Commission. “The city will need to exercise restraint in other areas, as well.”

De Blasio also warned that the state's takeover of the New York City Housing Authority contains open-ended language that could strain the city's budget in future years. He called Gov. Andrew Cuomo's state of emergency executive order "an X factor."

"Here we see a potential danger," said the mayor. "That sets a problematic precedent."

City budget director Melanie Hartzog said further negative action from Albany could affect out-year gaps and revenues. Fiscal 2018 and 2019 budgets are balanced, said Hartzog, who projected the gaps for the following three years at $3.2 billion, $2.86 billion and $2.25 billion, respectively.

Given the uncertainty from the federal government in Washington, "we can only expect the unexpected," said de Blasio. He said the Republican-backed tax law overhaul, which passed last year, eliminates the possibility of federal infrastructure investments.

"Federal context shifts not weekly, not daily, but hourly these days," he said.

De Blasio added $125 million to the executive budget to bring all schools to at least 90% of the so-called fair student funding formula, starting in the 2018-19 academic year.

The executive budget does not include $250 million for "fair fares," the subway discount program City Council Speaker Corey Johnson had sought, but de Blasio said discussions could resume over the remaining eight weeks of the budget process.

De Blasio said the city has realized $2.1 billion in total savings since last year's adopted budget, in addition to $1.3 billion of healthcare savings in FY19 and every year thereafter. FY18 and FY19 executive budget agency savings of $754 million, he said, include $123 million in partial hiring freezes and delays, and $49 million from reductions in 1,000 vacancies across city agencies.

The mayor pegged the general reserve at $1 billion per year over four years, and the capital stabilization reserve at $250 million annually over four years. The retiree health benefits trust fund, he said, sits at $4.25 billion.

The city crafted the formula in 2007, intending to benefit schools with the neediest students, but many have yet to receive the full amount owed under the formula.

The executive budget marks the latest step in the budget process. The 51-member City Council will hold a new round of hearings and by law must vote on it by July 1. The last two budgets materialized one month ahead of schedule.

De Blasio called budget discussions with Johnson and the council "collegial."

Moody’s Investors Service rates the city’s general obligation bonds Aa2, while S&P Global Ratings and Fitch Ratings rate them AA. All three assign stable outlooks.

The city has $37.6 billion of general obligation debt as of March 31.

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Budgets Infrastructure Bill de Blasio Corey Johnson Andrew Cuomo City of New York, NY New York