The City Council will push to undo some of the billions of dollars in spending cuts Mayor Eric Adams has imposed since last year, Council Speaker Adrienne Adams said Monday.
She made the remarks during the council’s first hearing on the mayor’s $109 billion budget proposal for the 2025 fiscal year. The hearing kicks off months of negotiations between lawmakers and the administration, which must agree on a spending plan by the end of June.
Although the city budget is always thorny, this year’s may be harder than usual as lawmakers voice increasing displeasure with the mayor’s handling of the migrant crisis and its associated fiscal strains. Late last year, Mayor Adams announced he had convened a panel of fiscal experts and business leaders, seemingly designed to boost his belt-tightening budgeting against resistance from the council.
As they grilled the mayor’s top budget official on Monday, council members were armed with their own new financial forecast released over the weekend, which projects the city will take in $3.3 billion more in tax revenues in the current and next fiscal years compared to the mayor’s more conservative estimates. That means that in addition to staving off new cuts, the council will argue for restoring some of the nearly $7 billion in across-the-board spending reductions the mayor has ordered this fiscal year.
“With higher-than-expected revenues in this fiscal year and a durable, resilient economy, I believe our city has the flexibility to reverse many cuts that have been made, strengthen our city’s workforce, and address our future fiscal challenges, all while being fiscally responsible,” Speaker Adams said Monday.
As a result of the migrant crisis and dwindling federal pandemic aid, the Adams administration imposed two rounds of cuts on city agencies since November through so-called “programs to eliminate the gap,” or PEGs, which allow the mayor’s office to order mid-year reductions outside of the typical annual budget process. The cuts have ended Sunday library service, hampered park improvements and reduced funding for CUNY colleges, even as the majority of the cuts have had no direct impact on city services.
It’s not uncommon for mayors to adopt a fiscally cautious stance in their budgeting as the council pushes for more generous spending on city services. But in the run-up to this year’s negotiations, Mayor Adams took the unusual steps of undoing some of the cuts he had previously announced for certain agencies, and canceling another round of cuts initially planned for April — thanks, he said, to stronger-than-expected tax revenues and his administration’s own successful efforts at reducing its spending on migrant care.
Those concessions, which came before budget negotiations had even begun, only fueled council leaders’ claims that Adams had exaggerated the need for last year’s cuts — potentially, some critics say, as part of a gambit to win more federal aid for migrants.
Even as the national economy improved over the course of last year, Adams’ administration avoided updating its revenue projections in the same November plan where it ordered cuts. Had City Hall used more up-to-date numbers, as past administrations have often done, “they certainly would have had a more ample fiscal situation,” Louisa Chafee, director of the Independent Budget Office, told reporters during a briefing last week.
“It was an interesting choice not to do that update while simultaneously calling for what was then three rounds of PEGs in the next three budget plans,” added Sarah Parker, a senior research and strategy officer at IBO.
When the administration finally did re-estimate the city’s revenues in January, its new forecast was more in line with what the council had projected.
Jacques Jiha, the mayor’s budget director, argued Monday that the administration’s actions had been consistent. Last year’s cuts made sense, he said, since most economists were still forecasting a recession on the horizon and the mayor had returned from trips to Washington with the clear impression that no migrant aid was coming soon.
“Do not expect the federal cavalry to ride to the rescue,” Jiha recalled the mayor telling him. The administration also decided early on that it would not raise property taxes to cover budget gaps, and would not lay off any city workers.
“Our fiscal position has stabilized, and we avoided additional budget cuts that would have impacted each and every New Yorker,” Jiha said.
Jiha mostly reiterated the administration’s positions during his testimony at Monday’s hearing, although he did reveal that the city planned to move management of three large-scale migrant relief centers from the Health + Hospitals corporation to the Department of Homeless Services — a change that would save about $69 million, he said.
Where the Adams administration once projected a whopping $7.1 billion budget gap for the coming year, City Hall now says it has closed that gap to create a balanced budget plan, as required by law — thanks in part to its spending cuts. The City Council goes further, projecting a $3.5 billion surplus for fiscal 2025 and manageable gaps averaging around $500 million for the ensuing three fiscal years. (The administration projects gaps between $5 billion and $6 billion from 2026 through 2028).
This will be the third budget Mayor Adams has negotiated with the City Council since he took office in 2022, and each cycle has grown more difficult as the city’s finances have become more strained. After a relatively seamless process in his first year, last year’s negotiations were strained as the administration sought cuts to some agencies.
Nick Garber , 2024-03-04 20:51:31
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