The budget cushion in Mayor Bill de Blasio’s preliminary fiscal 2019 budget isn't enough to ward off any problems as New York City's economic expansion slows, according to an analysis released by Comptroller Scott Stringer on Friday.
"Budgets are about priorities, and ours need to be on making sure that those who need our help the most get it, and that we can continue to provide all New Yorkers the critical City services they count on -- in both good times and bad,” Stringer said. “Mayor de Blasio has offered a preliminary budget that puts forward a number of laudable initiatives that I support. But as we confront the challenges ahead, we will have to grow our budget cushion and implement a more vigorous agency savings program.”
"The mayor’s made dramatic investments in homeless outreach, our schools, and our corrections system. They have helped lead the city to records in job creation, test scores, and crime prevention," the Mayor's Office said on Friday. "We appreciate the comptroller highlighting these gains."
Stringer said that the city’s projected budget cushion -- the budget resources available at the beginning of each fiscal year to help the city weather unexpected events – is currently insufficient. At 9% of adjusted fiscal 2019 spending, it is under the optimal range of between 12% and 18% of spending. To reach the lower rung of the optimal range, the city needs to add more than $2 billion to the budget cushion.
While the city’s economy is still growing, the Comptroller’s Office is forecasting that economic growth will slow in the years ahead.
Stringer said declining cash balances constitute an early warning signal -- they are currently over $2 billion under last year’s level after falling to a low in December of $1 billion – the lowest level since 2010.
Job growth in the city is expected to slow from an average of about 90,000 new jobs a year since the end of the Great Recession in 2010 to 22,700 in 2020, 15,900 in 2021, and 16,300 in 2022.
Stringer also unveiled an "agency watch list," which will spotlight agencies raising he most budgetary concerns. Agencies included on the list for fiscal 2019 are the Departments of Homeless Services, Education and Correction.
“Our economy is in solid position, but it won’t last forever, as economic and job growth slow in the years to come,” Stringer said. “With President Trump’s proposed budget cuts going after the most vulnerable New Yorkers, and his tax bill targeting our economy, it’s absolutely critical that New York City prepare today for whatever comes tomorrow. That means spending our limited resources in a way that achieves maximum impact.”
The city, which sold $1 billion of general obligation bond this week, has about $36.7 billion of GO debt outstanding and this week it is selling approximately $1 billion of GOs. Moody’s Investors Service rates the city’s GOs Aa2, while S&P Global Ratings and Fitch Ratings rate them AA. All three assign stable outlooks.