NYC council, mayor agree on $92.8B budget with added reserves
Averting the threat of down-to-the-wire budget negotiations, the New York City Council and Mayor Bill de Blasio said Friday they reached agreement on a final fiscal year 2020 budget of $92.8 billion.
The final budget is larger than the $92.5 billion executive budget released in April and the $92.2 billion preliminary budget unveiled in February. The final fiscal 2019 budget was $89.2 billion.
By law, the council must vote on a budget by July 1. The last three budgets were all approved well ahead of schedule.
“The agreement reached between the Mayor and City Council includes more spending —though no new, big ticket initiatives — and more money placed in reserves, pushing the total to about $6 billion,” said Doug Turetsky, the New York City Independent Budget Office’s chief of staff.
The adopted budget maintains $1.15 billion in the General Reserve, an increase of $150 million; $4.57 billion in the Retiree Health Benefits Trust Fund, an increase of $100 million; and $250 million in the Capital Stabilization Reserve.
“So in addition to what we had previously put into reserves, we will now be raising our reserves level to almost $6 billion total. And this will include $250 million in new reserves that will be added into this budget,” de Blasio said. “This is literally the all-time highest reserves in the history of New York City and it's something everyone should be proud of.”
The budget also includes over $300 million in new savings on top of the $2.5 billion in the Citywide Savings Program in Fiscal 2019 and 2020.
“These savings were, in part, attained through the Administration’s first Program to Eliminate the Gap (PEG) and a permanent reduction of 2,600 city-funded positions, 325 additional vacancies will be reduced in this plan, adding $25 million in savings,” the mayor’s office said in a statement. “The Citywide Savings Plan is an element of strong fiscal management, and helps balance the city’s budget and finance initiatives in an era of slowing revenue growth.”
Council Speaker Corey Johnson, Finance Committee Chair Daniel Dromm and Capital Budget Subcommittee Chair Vanessa Gibson unveiled the agreement alongside the mayor at City Hall.
“The Fiscal Year 2020 Adopted Budget creates greater fairness for all New Yorkers,” de Blasio said. “We’re accomplishing all of this while protecting the City’s fiscal health by increasing savings and adding $250 million to our already historic levels of budget reserves.”
The budget includes many of the priorities the council had pushed for including the increased budget reserves.
The agreement also includes funding to place 200 additional social workers in public schools, including specialists working within Thrive who will help students experiencing crisis and mental health issues. The city is also expanding senior housing by adding $275 million in fiscal 2020 through 2023, which will create an additional 800 affordable senior homes. This raises city spending for new senior housing to $687 million from now until the end of the plan.
There were also increased money for libraries, summer youth programs, and trash collection.
Goals were set for establishing pay parity for early childhood education providers. Early childhood educators at community-based organizations (CBO) historically get paid far less than the rest of their Department of Education counterparts. As a result of these budget negotiations, the de Blasio administration committed to working with early childcare providers and labor unions to create a pathway to pay parity. The administration also committed to addressing pay equity issues across the public legal services as part of this budget deal.
“This Council has been focused on securing a responsible, equitable budget for all New Yorkers from day one,” said Johnson. “I am very proud of the Fiscal Year 2020 budget — a budget that bolsters our city’s reserves to protect future generations and improves the quality of life for all residents — while also ensuring citywide savings.”
Dromm, who worked hard to get additional reserves put into the budget, said he was satisfied with the agreement.
“The FY 2020 budget is a progressive and responsible budget that truly delivers for all New Yorkers. From increases in funding for our parks and LGBTQ community services to an allocation for additional school social workers, this is a budget in which we can all take pride,” Dromm said. “It is a statement of our priorities and helps ensure that all of our constituents, particularly the most vulnerable, are protected and served. By adding $250 million to city reserves, the FY 2020 budget helps NYC weather any downturn in the economy that might come our way.”
“The Fiscal Year 2020 Adopted Budget agreement Mayor Bill de Blasio and City Council Speaker Corey Johnson announced today increases city spending, savings, and reserves; unfortunately, new spending commitments are greater than deposits to the city’s reserves,” the Citizens Budget Commission said in a statement.
“The agreement increases the city's general reserve by $150 million and the Retiree Health Benefits Trust by $100 million. These actions are prudent; in particular city leaders deserve praise for making deposits to the RHBT annually since 2014,” the budget watchdog CBC said. “However, the Mayor and Council Speaker should have gone further to bolster the city’s fiscal standing while the economy continues to thrive in order to protect New Yorkers when the rainy day arrives.”
The city is one of the largest issuers of municipal debt in the United States. As of March 31, the city had about $37.68 billion of general obligation (Aa1/A/A) debt outstanding. That's not counting the various city authorities which issue debt.
The NYC Transitional Finance Authority has $37.02 billion of debt outstanding while the NYC Municipal Water Finance Authority has $29.81 billion of debt outstanding. The TFA’s debt consists of future tax secured senior bonds (Aaa/AAA/AAA), future tax-secured subordinate bonds (Aa1/AAA/AAA) and building aid revenue bonds (Aa2/AA/AA). The MWFA’s debt consists of general resolution bonds (A1/AAA/AA+) and second general resolution bonds (Aa1/AA+/AA+).
“Together, we worked for pay parity for early childcare workers, public defenders and the district attorneys; additional social workers in our schools; supported our foster youth; added Title IX coordinators to our schools; significantly invested in our cultural institutions, libraries, and parks; added funding for the 2020 census; and secured meals for our seniors,” Gibson said.
The agreement also included money for abortion services for low income women.
“New York has always been a champion for abortion rights. But for too long, legal abortions did not mean equitable access across all communities," Comptroller Scott Stringer said. "Now we’re turning the tide. I am proud this year the budget will deliver a progressive, historic victory for New Yorkers — and for our country. It’s the right way for New York City to lead the nation. As for the rest of the budget, our office will do our due diligence as we do every year before certifying. We look forward to seeing the specifics on the city's promised initiatives and we will monitor developments on pay parity.”