New York City Mayor Eric Adams, revealed one of the largest budget proposals in the history of the city.
On a Jan. 13 afternoon address from City Hall, Adams announced his record-high $102.7 billion fiscal 2024 budget proposal that would increase city government spending by nearly 1.6 percent.
Overall city expenditures would be $1.6 billion more than the $101.1 billion fiscal 2023 budget adopted last June.
NYC’s fiscal year begins on July 1 and ends June 30 of the following year.
However, his proposed budget does not account for the estimated $1 billion-plus cost of managing the ongoing illegal immigrant crisis.
City officials stated that a “perfect storm of slowing revenue and rising costs” would soon hit due to a pending looming recession, leaving a massive budget gap as high as $6.5 billion over the next few years, the NY Post reported.
Adams last year ordered all city agencies, including the NYPD, to start planning to cut expenditures and for years of further cuts due to stock market losses, high inflation, and the risk of recession.
“Although the economy has been strong, it is slowing,” said Adams.
“In order to keep moving forward while preserving the programs and services we value, we must be careful and make the best use of our resources.”
NYC Prepares for a Budget Shortfall While Increasing Spending
The mayor also expects a slowdown in revenues would over the next several months because of a decline in real estate sales and rising interest rates.
He noted that “office vacancy rates remain at a record high” because of the pandemic, leaving much commercial real estate vacant.
“This weakens the commercial office market and has a negative impact on the property tax, the city’s largest single source of revenue,” said Adams.
Although the budget is expected to increase, spending on agencies would be cut.
Adams said that the NYPD’s budget would be cut from $5.59 billion to $5.44 billion, while the FDNY’s budget would decrease from $2.51 billion to $2.24 billion.
The Department of Education’s budget would be lowered from $31.25 billion to $30.74 billion.
Fixed expenses are expected to rise, with the cost of debt service rising from $4.5 billion to $5.73 billion.
Pension costs will go from $9.41 billion to $9.56 billion.
The “Miscellaneous” category will witness the largest increase, with various expenditures set to rise from $13.4 billion to $15 billion, which alone accounts for most of the overall growth.
Meanwhile, the mayor will set aside $43 million and $10 million respectively, to pay for the rise in both lease and energy costs.
Other new expenditures will include: $259 million to help meet 2027 “carbon-reduction targets,” which mandated that new buildings be all-electric by the deadline.
Adams wanted $228 million for “high-priority street construction,” including projects tied to the Vision Zero safety plan and $77 million to double the installation of new traffic signals to 200 a year and other related improvements.
He also requested $153 million for a public–private plan to redevelop Willets Point in Queens and $62.3 million to reconstruct the landmark Soldiers’ and Sailors’ Monument in Riverside Park in Manhattan.
$20 million will also be earmarked to tackle the city’s housing crisis, with a giveaway of up to $100,000, for each low-income, first-time home buyer, along with a crackdown on “bad” landlords who harass their tenants.
Another $2.8 million will be set aside for the “Get Stuff Built” plan to create 500,000 units of affordable housing within 10 years and which will cut through red tape in various city agencies to speed up development.
Adams Adjusts Budget for the Next 4 Years
However, city budget analysts told the NY Post that “continued slowing growth in the economy,” and a nationwide recession this year “will lead to slowing growth in tax revenue over the financial plan.”
The mayor still hopes for $1.7 in windfall revenues “driven by continued momentum from the record Wall Street activity in 2021,” said his office in a statement.
His latest balanced budget plan will keep $8.3 billion in reserve, including $4.5 billion set aside for rises in city retiree health care costs and $1.6 billion for general expenses.
“At the same time, the city faces budget pressure related to the costs of meeting its legal obligation to shelter approximately 40,000 asylum seekers that is currently estimated to cost at least $1 billion in FY23 alone, the need to fund billions of dollars in upcoming labor contract settlements over the financial plan, growing annual health care expenses and waning federal stimulus funds that sunset in fiscal year 2025,” according to City Hall.
This has led city officials to project shortfalls of $3.2 billion next year in fiscal 2025, $5 billion in fiscal 2026, and $6.5 billion in fiscal 2027.
Budget officials estimated in November that the 2023 fiscal budget would actually exceed $101 billion by $3 billion, despite the cuts for city agencies in September.
City Hall is anticipating reduced revenue from city property and sales taxes, which is expected to fall from $75 billion to $74.49 billion.
Federal and state funding is also expected to decrease respectively, from $12.42 billion to $9.48 billion and $17.06 billion to $16.93 billion.
Adams said that his staff was able to find more than $3 billion in savings for both fiscal 2023 and 2024, after City Hall eliminated more than 4,300 vacant jobs.
“About 23,000 vacancies remain open citywide, leaving agencies ample room to hire for critical positions,” Adams’ staff reported.
City Hall May Be Unprepared for a Sudden Increase in Expenditures Due to Immigration Crisis
The mayor’s budget proposal does not take into account the surge in illegal aliens being sent to the city from border states since last year.
President Joe Biden has allowed millions of illegals to cross the border, swamping states like Texas which have sent them to blue “sanctuary cities” like New York.
About 26,700 of the 39,500 migrants who have arrived in the city were being housed in 75 hotels and 4 “Humanitarian Response and Relief Centers,” according to data from City Hall on Jan. 11.
Adams has pleaded with Biden for $1 billion a year to manage the flood of illegals, but the president last week refused to provide much assistance, despite the city’s state of emergency, reported The NY Post.
NYC was given less than $10 million by the federal government to house the illegals, Budget Director Jacques Jiha told reporters.
The mayor said he appreciated the small sum from Washington, but that it does “not come close to covering what we need.”
“New Yorkers will be left footing the bill—now and in the future,” said Adams.
“We will continue to push for relief from the state and the federal government so that we can avoid straining our budget and our capacity to provide city services for everyday New Yorkers.”
From The Epoch Times