New York City increases FY20 budget to $94.4 billion
New York City’s fiscal 2020 budget is now $94.4 billion after Mayor Bill de Blasio released his November plan update on Friday.
The figure is up $1.6 billion, or 1.7% from the spending plan de Blasio signed in June.
According to the mayor, the plan achieves $474 million in savings across fiscal 2020 and 2021. New city spending in FY20, he said, includes funding of costs related to a state-mandated criminal justice overhaul and fulfilling human services, and early childhood indigent defense provider commitments.
“A budget is a statement of priorities and with this update, our priorities are clear,” de Blasio said in a statement.
By law, the city must approve its budget by July 1and provide a November budget and four-year plan update. The mayor usually presents his preliminary budget around late January.
The plan, he said, reflects technical adjustments to the FY20 budget including recognition of federal and state grants, and revised revenues. Growth in the budget, which he called in line with previous years, is primarily driven by recognition of $974 million in federal and state grants.
Tax revenues have risen by $482 million, reflecting an increase in personal income tax and corporate tax collections, which a decline in the unincorporated business tax partially offsets.
Budget reserves remain at more than $6 billion. They consist of set-asides for emergencies or revenue shortfalls. Reserves include $4.6 billion in the Retiree Health Benefits Trust Fund, $1.2 billion in the general reserve and $250 million in the capital stabilization reserve.
Voters on Nov. 5 approved a measure calling for a dedicated stabilization, or rainy-day fund although the state legislature would have to approve the transition.
Moody’s Investors Service, which upgraded New York’s general obligation bond rating to Aa1 from Aa2 on March 1, said establishing formal reserve policies could lead to a further upgrade. S&P Global Ratings and Fitch Ratings both rate the city's GOs AA. All three assign stable outlooks.
The city is one of the largest municipal issuers with roughly $37.2 billion of general obligation debt outstanding in the first quarter of FY20, according to city Comptroller Scott Stringer’s office. The Transitional Finance Authority has $40 billion of debt on its future tax secured credit and $8 billion on its building aid revenue bonds while the Municipal Water Finance Authority has $29.2 billion.
The majority of new city spending of $311 million in FY20 and $386 million in FY21 is largely offset by $474 million in savings across those same years, the mayor said.
Since de Blasio took office in January 2014, the budget has risen more than 20%.
According to the nonprofit watchdog Citizens Budget Commission, city should spend less and save more. “The city’s already high level of expenditure [is] on an unsustainable trajectory,” CBC said.
CBC called on the city to restrain spending by offsetting new expenses with recurring commensurate savings; keep headcount flat and not exceed the FY19 year-end level of 326,739; substantially increase annual agency savings targets and ensure savings recur; and increase budgetary reserves or make deposits to the Retiree Health Benefit Trust, using additional resources generated by savings or higher than forecast revenues.