While New York Mayor Bill de Blasio’s final November
They include budget gaps of $2.9 billion, $2.7 billion and $2.1 billion from fiscal 2023 through 2025 — though smaller than previously anticipated — and a plethora of uncertainties that range from labor contracts to the effect of COVID-19's emerging Omicron variant on the city's economic recovery.
De Blasio released a $102.8 billion spending plan with no media briefing on Tuesday. It is up 4.2% from the $98.7 billion plan the city adopted in June.
Reimbursements from the Federal Emergency Management Agency accounted for $750 million of an additional $895 million in revenue.
In addition, returns on pension fund assets in fiscal 2021 yielded savings of $800 million next year, and $1.6 billion and $2.4 billion in fiscal 2024 and 2025, respectively.
The city projects $1.56 billion in debt service savings over the plan period, which inclulde $542 millionfrom refundings.
According to de Blasio, a combination of pension adjustments, agency and debt service savings totaling more than $600 million achieved over fiscal 2022 offset new agency spending of $534 million.
“As this administration comes to an end, we’ve substantially lowered budget gaps and increased reserves, leaving the next administration with a strong foundation to continue New York City’s recovery,” de Blasio said.
Budget reserves total $5.1 billion with $3.8 billion in the Retiree Health Benefits Trust, $1 billion in the rainy-day fund that voters and state lawmakers approved two years ago, and $300 million in a general account.
City reserves peaked at $6.1 billion in fiscal 2020, before the pandemic hit.
Shortfalls include $500 million in annual unspecified labor savings from fiscal 2023 through 2025, “which is nothing more than a ruse used to understate the magnitude of the city’s gaps,” said Andrew Rein, president of the watchdog Citizens Budget Commission.
“While all hope the economy is strong and revenues continue to come in above projections, which is likely in the near term, the next administration will face substantial challenges,” Rein added.
These include closing those gaps, negotiating the next round of collective-bargaining agreements without creating greater fiscal stress and grasping a looming fiscal cliff from using federal funds for recurring programs, and improving the efficiency of city agencies across the board, he said.
S&P Global Ratings and Moody’s Investors Service rate the city’s general obligation bonds AA and Aa2, respectively. Fitch Ratings assigns its AA-minus rating while Kroll Bond Rating Agency rates the bonds AA-plus. All four assign stable outlooks.
The city has $38.6 billion of GO debt outstanding, according to NYC Comptroller Scott
“Today's financial plan improves the fiscal outlook — but with federal aid eventually depleting, there are economic uncertainties and substantial challenges ahead,” Stringer said Tuesday.
Stringer, who is term-limited like de Blasio, lost in the Democratic mayoral primary and Brad Lander will succeed him Jan. 1.
The plan reflects an uncertain trajectory of the city’s recovery, according to State Comptroller Thomas DiNapoli, with employment growth and improvement in the commercial real estate market expected to slow from earlier projections.
“The city needs to find ways to balance its budget while maintaining service levels to smooth its path to recovery while navigating a difficult economic environment,” DiNapoli said.
More aggressive steps by the city to identify and implement operational savings are necessary to offset concerns about possible drops in tax revenue, he added.
“It did not take up this effort in the updated plan,” DiNapoli said.
De Blasio’s plan includes $57 million for the Emergency Rikers Relief Plan, a five-point initiative to confront challenges at Rikers Island prison, and $50 million in debt relief for taxi medallion owners with a city-funded backstop on top of the existing $65 million program.
It also earmarks $36 million for critical needs related to the response to tropical storms Ida, Henri and Isaias, and implements recommendations in the city’s report, “
The latter includes an expanded sensor network, a database of basement apartments, green infrastructure maintenance and wetlands management staffing totaling $15 million. That builds on $2.4 billion included in the fiscal 2022 capital commitment plan.
