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Under 'Threat' from D.C. and Albany, De Blasio Presents $88.67 Billion Preliminary Budget

de Blasio budget presentation Feb 2018

De Blasio's Feb 2018 budget presentation (photo: Ed Reed/Mayor's Office)

As the state and federal governments continue to pursue policies that threaten the city’s fiscal future, Mayor Bill de Blasio again said he is investing in making New York City the “fairest big city in America” as he proposed spending $88.67 billion for the next city fiscal year, which begins July 1.

On Thursday afternoon, the mayor released his preliminary budget proposal for next fiscal year, which increases city spending by nearly $3 billion from the last time the current year’s budget was modified in November. The modified budget of $85.99 billion was itself a modest increase over the $85.24 adopted budget that was approved in June.

The mayor is proposing an additional $750 million in spending from what was previously projected for fiscal years 2018 and 2019 combined, all of which, he said, is offset by identified savings. He promised additional savings before the budget is adopted in June.

De Blasio’s guiding philosophy in his budget was his promise to make the city fairer. “The city becomes fairer when more kids get the start in life that only some families can afford right now. The city becomes fairer when people who built their neighborhoods up in good times and bad are able to stay in the neighborhood and in the city they love. The city becomes fairer when we reverse the decades-long neglect of public housing in this city. The city becomes fairer when we heal the wounds of the past and we build trust between police and communities through transparency. And the city becomes fairer when we care for New Yorkers who are too often left behind but they’re just as much New Yorkers as any of us,” he said. “These ideas permeate our budget process but it was always against the backdrop of having to be prudent, having to be fiscally responsible, again given the extraordinary level of uncertainty that we’re facing.”

In keeping with previous budgets, de Blasio proposed “strategic investments” in affordable housing, the New York City Housing Authority, the NYPD, tenant harassment safeguards, public health initiatives, criminal justice reforms, seniors and early childhood education.

De Blasio had already announced a few of the new spending initiatives prior to Thursday’s release. After having successfully implemented universal pre-kindergarten in his first term, the mayor hopes to expand the program to all three-year-old through the ‘3-K for All’ program, over the course of several years and with funding help from the state and federal governments. De Blasio had previously begun the program by funding it in two districts, which was then expanded. The preliminary budget proposal funds the program in four more districts -- for a total of 12 districts by 2020 funded at $46.4 million.

Additionally, the city is also increasing funding for anti-bullying efforts in schools to $8.2 million in the new budget, and through the separate capital budget, which funds infrastructure, the city will build four new pre-k locations, with $46 million in capital funding in the current fiscal year and $26 million in fiscal year 2019.

In a news conference on Tuesday, de Blasio said the NYPD would be moving up the rollout of its body camera program by one year, increasing funding from $5.9 million in fiscal year 2018 to $12 million in the fiscal year 2019 budget proposal, to ensure that nearly 18,000 patrol officers are equipped with the cameras by the end of this calendar year.

Responding to withering criticism over boiler failures at NYCHA developments which left residents without heat during a cold snap in the last few weeks, de Blasio recently pledged $200 million for capital upgrades and $13 million in direct spending for boiler repairs, which are included in the budget.  

The mayor also put another $750 million towards his affordable housing plan, the target for which was enhanced in recent months from 200,000 affordable units preserved and built by 2024 to 300,000 by 2026. The Department of Buildings will receive $5.2 million, up from $1.6 million currently, to prevent landlords from using construction to harass tenants. The city will also fund a $2.4 million pilot program in East New York to convert basement units into legal and functional apartments, which was agreed upon when the neighborhood went through a comprehensive rezoning in April 2016.

The budget proposal also addresses the criminal justice system by providing $1.54 million, up from $430,000, to expedite mental competence examinations of criminal defendants, and increase from $200,000 to $5.72 million to provide better services to incarcerated women and their families. Another $4 million will fund health screenings for detainees in jail diversion programs, an increase from $700,000.

Over the years, the de Blasio administration has repeatedly touted “historic” levels of reserve funding socked away for times of economic uncertainty, and the mayor continued in that vein on Thursday. The budget proposal includes $1 billion put away each year in the general reserve, $250 million annually in the Capital Stabilization Reserve (created by this administration to manage costs of capital construction) and $4.25 billion in total in the Retiree Health Benefits Trust Fund. De Blasio has indicated some reserves may have to be used not because of an economic recession but because of federal cuts to the city.

The new spending plan for 2019 also includes $900 million in savings between fiscal years 2018 and 2019 -- from a partial hiring freeze that was implemented last year, agency efficiencies and from savings in debt payments -- and also promises to identify another $500 million by the time the next iteration, the executive budget proposal, is released in a few months (The November modification similarly included $500 million in savings.)

All those funds may be more crucial than before with the city’s economy showing signs of slowing down coupled with actions by the Republican-led U.S. Congress, President Donald Trump, and the state government in Albany. “If all we had to think about was ourselves, this might be a much prettier picture,” de Blasio said Thursday, after touting the city’s economic success in recent years. Citing the federal and state budget challenges, he added, “I think I can safely say, we’ve never quite seen anything like this.”

While budget officials have yet to fully assess the effects of the “draconian” federal tax code overhaul that passed in December and other measures taken by the federal government, they estimate that the city risks losing as much as $700 million. The city’s ailing municipal hospital system, New York City Health+Hospitals, could face a $400 million cut alone, they estimate, if Congress does not restore Disproportionate Share Hospital funding which reimburses local hospitals for care provided to low-income and uninsured patients.

Federal tax reform also cost the city the ability to refinance debt on tax-exempt bonds, which local governments use to fund infrastructure projects. The change could mean an additional burden of $100 million for the city, while another $200 million in capital funding could be lost because the tax law also inadvertently reduced the value of a tax credit that encouraged private entities to invest in affordable housing. Additionally, the legislation capped the State and Local Tax (SALT) deduction that residents of high-tax states such as New York rely heavily on.

“A lot of these are double jeopardy dynamics,” de Blasio said. “Your taxes go up and your benefits go down. It’s a dangerous combination and I think we should not underestimate how all this may play out.” He also expressed concern about what the upcoming federal budget may hold for the city.

Governor Andrew Cuomo’s recent executive budget proposal for the state’s next fiscal year, which begins April 1, makes the situation more precarious by including about $400 million in cuts and cost shifts, de Blasio said. De Blasio pegged the “total potential risks from Albany: at “over $750 million” while also questioning limited growth in the governor’s proposed school aid and saying that he is not even included MTA-related cost-shifts that Cuomo is pursuing.

The Cuomo administration pushed back after the mayor's presentation, claiming that the city is actually doing quite well vis a vis the governor's budget plan. “While closing a $4.4 billion gap, this year’s budget sends $16.5 billion in aid to the City– more than 40 percent of funding awarded to all local governments – and a half billion dollar increase over last year," said Morris Peters, a spokesperson for the state Division of Budget, in a statement. "The state’s budget includes a $248 million increase in school aid, $212 million more for the state takeover of Medicaid, and $60 million in additional tax revenue – calling this significant increase a cut is disingenuous and the City should check its math.”

Fiscal watchdogs and independent monitors have generally praised the city’s financial management under de Blasio, but some have repeatedly warned that the city is not putting away sufficient rainy day funds and that ballooning costs from a massive expansion of city government has not been met with adequate cost-saving measures. With this newest budget proposal, the city’s spending will increase by almost $16 billion in comparison with the last budget modification under former Mayor Michael Bloomberg, which was $72.7 billion in November 2013.

“New York City’s Preliminary Budget for Fiscal Year 2019 continues the ‘wait-and-see’ approach of the previous budget update in November,” said Citizens Budget Commission President Carol Kellermann, in a Thursday statement, “it neither addresses issues spawned by the recently enacted federal tax law and possible budget cuts nor pending State actions that could reduce resources available for city services. Most importantly, no additions will be made to the City’s reserves.”

Kellermann credited the fact that “the cost of new agency needs will be offset by the Citywide Saving Program,” but said the “program relies too much on dwindling debt service savings, and State and Federal reimbursement and not enough on making government more efficient. Before the going gets tough, the Mayor should get going by limiting spending growth, bolstering the savings plan, and adding to reserves.”

CBC wants to see the city do more to build reserves and to alter the capital budget plan to account for new fiscal realities. “Spending growth continues to surpass inflation and the finances at H+H and NYCHA remain precarious,” Kellermann said of the public hospital and public housing systems.

Over the next few months, the preliminary budget proposal will be evaluated by the City Council in dozens of hearings where administration officials and city agency heads will testify. After the Council issues its formal response, the mayor will release his executive budget, which will also undergo another round of hearing before negotiations move behind closed doors.

by Samar Khurshid, City government reporter, Gotham Gazette

Read more by this writer.

Note - this article has been updated.

400 Old and New Bills Introduced at City Council

Johnson podium stated meeting

Speaker Johnson (photo: William Alatriste/City Council)

After weeks of mostly procedural activity to start its new four-year term, the New York City Council convened Wednesday afternoon for its first legislation-focused 2018 meeting, which included discussion and reintroduction of bills from the previous session that had not passed, as well as the introduction of new bills.

Some of the 408 pieces of legislation reintroduced deal with tenant protection, zoning and scaffolding regulations, and a bill to prohibit people who have been found guilty of a specific set of felonies from holding office.

Following roughly five minutes of formalities, new City Council Speaker Corey Johnson announced that immigration activist Ravi Ragbir, who a federal judge ruled had been wrongfully detained by ICE on January 11, was in the chamber. Johnson called his detention “brutal” and “unjust;” Ragbir was greeted with a standing ovation from the majority of those in attendance. Earlier, activists and Council members gathered to support him at a press conference on the City Council steps. Two Council members, Ydanis Rodriguez and Jumaane Williams, had been arrested protesting Ragbir’s detainment.

Johnson then led the Council through its vote on legislation that had moved through committee, mostly land use items, outlining two Manhattan locations to be given property tax exemptions, one on West 28th Street, located in District 3, which he represents. “It’s going to create 37 units of supportive housing, which I am really happy about,” he said.

The other building proposed to be granted a property tax exemption is in District 1, represented by Council Member Margaret Chin, which aims to preserve 198 units of affordable housing in the Two Bridges neighborhood. In addition, Johnson briefly mentioned a rezoning along Bedford Avenue.

Council Member Ben Kallos of Manhattan’s Upper East Side re-introduced a pair of bills, Intro. 85 and 86, aimed at ensuring people who have had cases heard in housing court do not face discrimination from landlords. “[The bill] would require tenant screening companies who make these so-called “tenant blacklists” to provide fair and complete information. Landlords would no longer be able to discriminate against tenants,” he said. “No one should face homelessness suddenly because they’ve been to housing court.”

In a similar vein, Chin introduced a tenant protection measure of her own, Intro. 30. This bill, she said, would mandate that landlords, in the event that residents needed to be vacated, could not put relocation expenses on the city's dime. “We need to continue holding bad landlords accountable for their actions,” she said. “Or in this case, inaction.”

Kallos, who announced his wife is imminently due to give birth and that he is slated to begin paid parental leave until March, spoke about the importance of fathers taking their paid leave and re-introduced a bill designed to limit how long scaffolding could remain in place. “Some scaffolding is almost old enough to vote,” he quipped.

While not discussed during the session, one notable bill reintroduced this week was Intro. 374, which was sparked by former State Senator and former City Council Member Hiram Monserrate, who was convicted for domestic violence, launched an ultimately unsuccessful bid for City Council last summer, which was met with condemnation from elected officeholders and many others.

Asked about the scaffolding bill at a press conference after the Council session, Johnson said he is receptive to the idea of reducing the amount of time scaffolding remains in place, though he did not explicitly state his position on it. “We have to make sure the public is safe, while at the same time not allowing scaffolding to remain up longer than needs to,” he said.

“I don’t know enough about the nitty gritty on the bill itself, but there was an issue yesterday, I believe the Republican House did something to invalidate our scaffolding laws” he added, presumably referencing H.R. 3808, the Infrastructure Expansion Act, designed to undermine New York’s “Scaffold Law,” which is meant to protect workers by placing legal responsibility on property owners when they incur injuries. He went on to label scaffolding a “blight” and “eyesore.”

Johnson was asked about allegations related to Mayor de Blasio allowing a pay-to-play climate to fester in his government. “Every New Yorker, regardless of if you gave money to an elected official or you’re a random person that calls someone’s office or shows up outside City Hall, your local elected official should be responsive to you,” Johnson said.

Asked if mayor de Blasio acts in this spirit, Johnson said, “He says he does that.”

He added, “I don’t know what it’s like for any New Yorker who stops him on the street, but you have to make sure that government is responsive to everyone.”

Johnson was also asked to comment on NYCHA, which has come under fire in recent months for issues ranging from lead paint to malfunctioning boilers, the topic of a hearing set for Tuesday, February 6.

“I’m going to be there the whole time,” he said of the hearing. “Four hours, five hours, however long the meeting goes.”

The speaker had harsh words for management of the authority, but stopped short of calling for the chair, Shola Olatoye, to step down. The problems at NYCHA, he said, could not be blamed solely on Olatoye. “If she left tomorrow, the issues would still exist,” said Johnson.

“This is a long-term issue. It’s taken a lot of time for the neglect that NYCHA has faced to get in this situation,” he explained. “We’re not going to get all the money overnight, we’re not going to fix the developments overnight.”

To that end, Johnson vowed to use the city budget process to ensure NYCHA receives more funding.

Campaign Finance Board Begins Formal Review of 2017 Election Cycle

Mayor de Blasio 2017 election voting

(photo: Samar Khurshid/Gotham Gazette)

The New York Campaign Finance Board (CFB) held a hearing Monday morning to field testimony on the 2017 New York City election cycle from candidates, operatives, and advocates. The hearing, part of a quadrennial post-election report that must be submitted before September 1 the year after the election, came on the heels of final campaign finance filing of the 2017 cycle. The CFB post-election process will lead to a report that then informs legislation typically introduced by City Council members to tweak the city’s heralded public-matching system that encourages small-dollar fundraising.

Led by CFB chair Frederick Schaffer, Monday morning’s meeting was attended by roughly 35 people and lasted just under two hours. It featured discussion on increasing voter participation, ins and outs of campaign financing, and CFB protocols in working with candidates. As is typical, several candidates who were unsuccessful in the recently completed elections expressed frustration with the process, though the vast majority of candidates did not testify at the hearing. City Council Member Ben Kallos was the lone elected official to testify -- Kallos has been a campaign finance and government reform advocate prior to joining the Council, and for the last four-year cycle chaired the Council committee with oversight of the CFB.

The board took stock of its initiatives during the last cycle -- which featured elections for citywide, borough-wide, and City Council seats -- including the matching funds program, but also the candidate debates that it sponsored, and its other voter education and outreach efforts.

According to the CFB’s data, during the 2017 cycle 73% of candidates received money from the program; the CFB distributed funds totaling $17,694,046 to 105 different people running for office. This past cycle, 46% of spending came via public funds. And in 25 Council races, matching funds comprised of over half of campaign spending.

The first and only of its kind, the hearing is part of a process that may prove pivotal in the next election cycle, ahead of what will be a far more contentious and busy 2021 elections. After the CFB released its report on the 2013 elections in 2014, the City Council subsequently incorporated many of the proposals in about a dozen pieces of legislation that passed ahead of these past elections, along with about another ten campaign finance-related bills brought forth by Council members to modify the system and related processes to their liking.

According to the CFB, of 14 statutory changes the board recommended in 2014, 10 became law, including measures to make determinations about public matching funds earlier in the cycle, clarify eligibilty for debates in the citywide races, and ban anonymous campaign communications. Those that were not enacted into law include instant runoff voting.

On Monday, advocates and others testifying offered several changes they would like to see ahead of the 2021 election. Further encouraging candidates to raise funds via small-dollar donations topped the list of priorities.

Kallos made the case for a bill he sponsored last term and will soon re-introduce this term, which he said would additionally incentivize candidates to pursue small-dollar donations by increasing the threshold for public matching dollars that candidates can earn.  While he called New York City’s “the model public finance system in the country,” he said it can also be improved upon.

Under current campaign finance law, Kallos explained, the CFB matches the first $175 of eligible donations at a six-to-one ratio. Kallos wants to raise the ceiling for matching funds so that candidates can run for office by raising all donations of $175 or less if they so choose, and still be able to hit the spending cap. If his policy in enacted, Kallos said candidates would be able to finance campaigns on mostly small donations. For example, he said, someone would be able to run for mayor collecting 5,689 contributions of $175, raising about $1 million, to be matched six-to-one, garnering a total of $7 million and able “to run a competitive race.”

“The ability to run a 100 percent grassroots campaign, where a candidate is beholden to no one except the voters, will revolutionize city politics and restore confidence in government [that] has been steadily eroding for decades,” he said.

“If candidates pursue a small-dollars, grassroots campaign, we will have elected officials who earned their positions based on their knowledge of the issues,” he said, rather than candidates’ “ability to convince millionaires and billionaires to open their wallets.”  

Asked what the advantage of his proposal is over lowering the contribution limit with the aim of encouraging low-dollar donations, Kallos responded that candidates would still opt not to seek small donations and prioritize larger donors if the contribution limit was reduced. “Whatever the contribution limit is, is what elected officials will seek. Lowering that threshold just makes it a little bit cheaper for those writing those maximum checks under the law,” Kallos said.

Michael Malbin, campaign finance expert and politics professor at the University of Albany, agreed with the thinking behind Kallos’ bill. “If you raise your money from max donors...you’re not going into the neighborhoods to get $50 contributions,” Malbin said during his testimony. “And the goal of this is, or ought to be, to increase participation by a diverse set of people who fully represent the city.”

Caitlin Scherer, of Represent.US, voiced support for Kallos’ legislation. And more broadly, Scherer made the case for increasing the amount of public spending on elections. “Doing so would involve more citizens in the political process and relieve candidates of the pressure to solicit donations from those with the deepest pockets,” she said during testimony.

Reinvent Albany senior policy consultant Alex Camarda also expressed support for Kallos’ legislation. The bill was co-sponsored last term by Council members Brad Lander and Fernando Cabrera, along with 29 others, for a total of 32 sponsors in the 51-seat body, and was discussed at a hearing last April, but did not see a committee vote.

Rachel Bloom, director of public policy at Citizens Union, another government reform group, offered other suggestions on campaign finance reform during her testimony. Before the 2021 elections, Bloom said Citizens Union wants to see “an increase in spending caps to counteract increases in independent expenditures, banning the use of public funds for campaign consulting services from firms that also lobby; and a further reduction in public funds for candidates facing minimal opposition and the enactment of ‘war chest’ restrictions.’”

Bloom also assessed the voter turnout in the 2017 elections, which was exceedingly low. She pointed toward the lack of competitiveness in many elections across the five boroughs, with incumbents receiving 74% of the vote and only about 10 of more than 50 municipal seats open in 2017 as the factors driving low voter participation. The elections last year, she said, were “notably uncompetitive.” Bloom added that “open” city council races, races without incumbents seeking office, were 12% more likely to participate in the matching funds program.

Matt McDermott, director at Whitman Insight Strategies, mentioned the difficulty of getting younger voters to the polls. “These voters aren’t apathetic. They actually have issues they care about and they actually care about those passionately,” McDermott said. “The difficulty is in correlating those care-abouts to voting in local elections.”

“A lot of younger people just don’t know there’s a primary,” said Caileigh Scott of McEvoy & Associates. “It is partially a communication breakdown.”

Malbin said that though getting millennials to vote it a difficult task, it is also crucial.  “The research show that once you get somebody to vote, it’s really a habit. The first couple are the hard ones,” said Malbin.

While the majority of testimony was focused on specific recommended changes to the CFB system, some who testified -- mainly those who either worked on unsuccessful campaigns or had run themselves -- had harsh words for the CFB.

Angela Disto, who served as treasurer for Liam McCabe’s unsuccessful bid for the Republican nomination in City Council District 43, complained that some of the CFB’s verification process of donations was “petty” and “unnecessary.”

“I’m a volunteer, as [are] the majority of campaign treasurers. Who needs it?” she said. “Why does the board make this mostly volunteer role so overwhelming?”

Anthony Rivers, who ran unsuccessfully in City Council District 27, does not think the CFB-led training sessions adequately prepared him for the campaign.

“I feel the training does not put enough emphasis on campaign contribution cards and their importance,” he said. “It should be heavily stressed on the importance of not having a single blemish on the contributions card. Our campaign suffered many setbacks due to minor blemishes on the individual cards.”

For his part, Cary Goodman, who ran in Council District 6, had a different experience with the CFB. “I am here as a poster boy for the Campaign Finance Board,” he said. “There is absolutely no way I would have been able to conduct a campaign against the incumbent -- it was not successful, I got rocked -- but I would not have have [had] the opportunity to do what I did without the Campaign Finance Board.”

The CFB will now proceed with months of internal work to complete its post-election report before September 1. The next filing for the 2017 campaign cycle and first filing for the 2021 cycle is July 15.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

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