In the face of continuing uncertainty surrounding federal funding polices to states and cities, the New York City Council this week urged Mayor Bill de Blasio to build up the city’s reserves.
In its official response to the mayor’s preliminary budget for Fiscal 2018, the Council said it was also calling on the administration to adjust the capital budget by cutting excess appropriations and expanding transparency, and to increase the city's ability to implement contingency measures in the face of an unsure response from Washington.
The Council said it “recognizes that the election of President Trump and a Republican-led Congress has shifted the legislative and policy priorities in Washington, and the Council believes that the city must budget with prudence and caution as it waits to see the impact of the changed federal priorities.”
In January, de Blasio submitted a $84.7 billion preliminary budget for Fiscal 2018. In March, the council held hearings.
Overall, the council’s plan would increase the budget by $116 million in Fiscal 2017 and by $134 million in Fiscal 2018. The additional spending, an increase in the capital stabilization reserve, and anticipated additional spending on charter schools could be financed by savings and reductions and rolling the general reserve into Fiscal 2018.
“The City Council’s 2018 budget recommendations are the culmination of dozens of comprehensive budget hearings that have helped shape our understanding of the city’s priorities for the coming year,” said Council Speaker Melissa Mark-Viverito.
The council said the city has several tools that make it well positioned to respond to fiscal uncertainty and pointed to several areas where savings could be found.
The Council’s Finance Division said it believes the Office of Management and Budget “has continued its history of cautious tax revenue forecasting and that actual city tax revenues will be stronger throughout the financial plan.” The Council’s forecast sees $259 million in additional resources though the end of Fiscal 2018.
However, the Council said it does agree with the fiscal prudence that guides OMB’s forecast, and shares OMB’s outlook of mixed signals in the economy which underline the need for caution.
De Blasio will now make tweaks in his executive budget and send an executive budget to the Council later this month. The Council will then hold a new round of hearings on that proposal in May.
By law, the 51-member council must vote on it before July 1, when the new fiscal year starts. Last year's budget was finished a month ahead of schedule.