Mayor Adams orders New York agencies to cut budgets amid spending demands from City Council and unions
Mayor Eric Adams is asking all city agencies to cut spending by about 8% over the next two years, in a belt-tightening measure he says is aimed at addressing looming growth-related budget shortfalls labor costs, but that could affect the delivery of key city services.
News of the mayor-ordered spending cuts was first reported by Politico. Cuts are to be phased in, with agencies — including the NYPD, which often does not face cuts — cutting 3% by the end of the current fiscal year ending June 2023 and 4, 75% more between fiscal years 2024 to 2026.
The order, which falls under a city budget tool known as the Program to Close the Gap, calls for cuts without layoffs or service cuts. Agency heads are due to submit their plans by the end of this month.
The announcement comes about a week after Adams met with members of the New York State Board of Financial Control, an agency responsible for reviewing city finances. During that meeting, budget experts warned the mayor of looming deficits that could arise if the country and the city slip into a recession. State Comptroller Thomas DiNapoli estimated the city could face a $10 billion shortfall in fiscal year 2026.
“We are currently facing new costs that will increase the city’s obligations by billions of dollars, including increased pension contributions, expiring employment contracts and increased health care costs,” Adams said. in a press release. “This Closing the Gap Program savings plan is a strong and decisive action that will both protect the city’s fiscal outlook and funding for essential programs and services, promote effective government operations, and protect stability. the city’s long-term financial position.”
James Parrott, director of economic and fiscal policy at the New School’s Center for New York City Affairs, acknowledged that the city faces real fiscal and economic concerns. But he noted that the latest economic data shows the city has been adding jobs faster than the national average in recent months.
Parrott argued there were political dimensions to the mayor’s directive at a time when some opponents were pressuring him to increase spending.
“Budgets are about politics and budget actions are about politics,” he said, adding that Adams was certainly not the first mayor to threaten spending cuts in this way.
Adams’ $101 billion budget increased overall city spending, but was overshadowed by criticism of $375 million in cuts to education. The city council is asking the mayor to top up nearly $500 million in funding this year.
Meanwhile, several city unions, including the teachers’ union, are seeking contract extensions at a time of high inflation and many city workers taking extra risks to keep the city running during the pandemic. .
Parrott expressed doubts that the latest directive would result in across-the-board cuts, similar to the first PEG the mayor ordered early in the budget process.
“He is a mayor who wants to project to the budget watchdogs that he is very careful and responsible when it comes to budgeting,” he said.
Along those lines, Andrew Rein, the head of the Citizens Budget Commission, a budget watchdog group, applauded the mayor’s action, calling the cuts “a prudent and fiscally necessary step to stabilize New York’s budget over the long term. “.
But many city agency workers say a continued shortage of municipal labor has hampered their ability to provide essential services, from affordable housing to public health. Among the complaints is that the city is hurting its hiring ability by using a relatively new practice of underestimating new hires.
At an independent press conference Monday morning, Adams defended his administration’s approach.
“It’s easy to sit on Council and just say, ‘Let’s spend, let’s spend, let’s spend,'” the mayor said. “I have to make smart financial decisions so our city can get through these turbulent times.”
Correction: This story has been revised to reflect that Mayor Eric Adams is asking city agencies to cut spending by approximately 8% over the next two years. A previous version distorted the number of years.