NYC mayor’s run for president draws attention to $92.5B budget negotiations
“There’s plenty of money in the world. There’s plenty of money in this county. It’s just in the wrong hands.”
And with those words, New York City Mayor Bill de Blasio threw his hat into the ring, joining the ranks of the 22 other Democratic contenders vying to become the next president of the United States.
Some municipal market observers commented that they hoped the mayor's run for office won't take time or attention away from finishing up the work on the city's $92.5 billion budget.
“I have the usual concerns anytime a public official — usually a state governor — decides to run for national office,” said Howard Cure, director of municipal bond management for Evercore Wealth Management. “Some of their priorities change and this is rarely financially good for the state — and this may hold true for the city also.”
He said he is worried about what could happen to the budget reserves or the program to eliminate the gap (PEG) if the mayor backs some new programs that could cost the city a lot of money.
Cure said he will be watching areas such as the green new deal and expanding Health + Hospitals to cover insurance for all immigrants and see what it means for the city.
“First Deputy Mayor Dean Fuleihan is more than capable of dealing with all the budget issues,” Cure said, “but we will have to see if the mayor’s priorities change to make him stand out as he goes into the fray with a gaggle of presidential contenders — and if this will make the city less frugal. We’ll see.”
The Mayor’s Office of Management and Budget and the City Council are now negotiating on the mayor’s $92.5 billion fiscal 2020 executive budget, which was released late last month.
De Blasio released a preliminary budget in February, after which the 51-member council held a round of hearings. The council is now holding a second round of hearings on the executive budget after which it and the mayor will negotiate adjustments. By law, the council must vote on a budget by July 1. The last three budgets were all approved well ahead of schedule.
But City Council Speaker Corey Johnson has hinted there may be no early budget agreement this year and has taken the administration to task for disregarding the council’s response to the preliminary budget.
The City Council had called on the administration to raise budget reserves by $250 million in the executive budget as a safeguard against an economic slump. This was not done and now it will be negotiated in the final round of talks.
On Friday, the mayor will travel to Iowa, where he will tour an ethanol plant with CEO of the U.S. Dairy Export Council and former U.S. Agrigulture Secretary Tom Vilsack, meet with farmers in Greene County, participate in a mental health and substance misuse roundtable with Des Moines Mayor Frank Cownie and speak at a fundraiser for the Woodbury County Democratic Party.
On Saturday and Sunday, he will travel to South Carolina, where he will speak at a local Democratic Black Caucus event, meet with Columbia Mayor Stephen Benjamin and Orangeburg Mayor Michael Butler and deliver remarks at a church service in Charleston.
New York City is one of the largest issuers of municipal debt in the U.S. As of Dec. 31, the city had about $38 billion of general obligation debt outstanding, however, several city agencies have billions more outstanding.
In March, Moody’s Investors Service raised its rating on the city’s general obligation bonds to Aa1 from Aa2. Moody’s said the upgrade “reflects continued strengthening and diversification of New York City's economy, reducing its reliance on volatile financial services.”
The city is rated AA by both S&P Global Ratings and Fitch Ratings.