New York Mayor Bill de Blasio left budget particulars unanswered in his initial
"We're on an uncharted path. We need to be progressive yet fiscally responsible," de Blasio said Monday afternoon at LaGuardia Community College in Queens.
The roughly one-hour speech was visionary in tone. De Blasio will release his roughly $70 billion budget proposal for fiscal 2015 to the City Council on Wednesday.
His biggest budget variable will be the settling of expired labor contracts. Full back pay, a labor demand, could cost the city as much as $8 billion, according to some estimates.
The Independent Budget Office estimated that the city has a budget surplus of $1.9 billion from unexpected tax revenue.
How the financial markets react to the new mayor's budget could hinge on whether deficits increase in the next four-year financial plan.
"The city cannot afford to take on more debt," said Anthony Figliola, the vice president of Empire Government Strategies and a former deputy supervisor of Brookhaven, N.Y.
Figliola cited a report last year by the Pew Center on the States that said the city was on the hook for about half the $192 billion of unpaid commitments nationwide for pensions and other retiree benefits, primarily health care, as of fiscal 2009.
"When I worked in government, the rating agencies would say 'great idea, now how are you going to pay for this?'"
Moody's Investors Service rates the city's general obligation bonds Aa2, while Fitch Ratings and Standard & Poor's rate them AA.
De Blasio, who took office last month, repeated his call to pay for full-day universal pre-kindergarten by increasing taxes on New Yorkers who make more than $500,000 annually; touted his recent agreement with the City Council for increasing the so-called living wage and promised a reworked "comprehensive and updated plan" for storm resistance in the aftermath of Hurricane Sandy.
"We're not asking Albany to increase state taxes by even a penny. We're asking the state to allow New York City to tax itself, its wealthiest residents," de Blasio said in a clear response to Gov. Andrew Cuomo's call last month for statewide universal pre-K.
Over the last two weeks, de Blasio revealed his plans to overhaul education and housing.
The Department of Education's proposed $12.8 billion four-year capital plan called for expansion of pre-kindergarten programs while cutting $210 million for charter schools.
It would include an additional $800 million from a new state obligation bond. New York State's executive budget recommends a $2 billion general obligation bond act, called the Smart Schools Bond, to go before voters in November.
About $500 million from the city's expected allocation from those bond proceeds would go toward technology enhancements, the other $300 million to expand pre-kindergarten facilities.
De Blasio also overhauled the New York City Housing Authority, naming Shola Olatoye, a vice president at Enterprise Community Partners Inc., to oversee the largest public housing agency in the United States.
A published report in 2012 accused the embattled agency of sitting on $1 billion of federal cash earmarked for security and repairs.
According to the Citizens Budget Commission watchdog organization, the authority has an estimated operating deficit of $192 million for fiscal 2014. New city Comptroller Scott Stringer has launched a forensic audit of the agency.
De Blasio called for "developing innovative strategies to leverage new capital to spur housing production and preservation."
