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De Blasio Presents $89 Billion Executive Budget Plan


de Blasio budget presentation

Mayor de Blasio presents a budget (photo: Ed Reed/Mayor's Office)


Mayor Bill de Blasio unveiled an $89.06 billion executive budget proposal for the 2019 fiscal year on Thursday, decrying new spending that the city must undertake to meet shortfalls and unfunded mandates imposed by the new state budget approved last month, and cautioning of federal actions that could affect the city’s fiscal future.

The latest budget proposal reflects a net spending increase of about $390 million from the mayor’s preliminary budget released in February. Back then, the mayor had promised to find $500 million in additional savings, and his new budget over-delivered by finding about $754 million through efficiencies at city agencies, implementing a partial hiring freeze for managerial positions, and reevaluating the city’s debts payments, he explained at City Hall on Thursday.

In total, the proposed budget is $3.82 billion more than the budget adopted last year in June. Much of the uptick is organic, stemming from increased labor costs and a massive headcount of city employees, which, like the overall budget, has increased significantly under de Blasio. The city is able to pay for the state “hits,” as de Blasio called them, and other elements of added spending in part through nearly $1 billion in new revenue at the city’s disposal.

On Thursday, de Blasio invoked his oft-stated goal of making New York City the “fairest big city in America” as he explained the proposed budget, though it is still unclear how he will measure whether that mission is being accomplished relative to other cities. Particulars of how New York is approaching that goal, according to the mayor, were evident in this and other budget presentations.

“All of the things that we’ve done and all the things we hope to do revolve around a simple principle...that progressives need to be fiscally responsible,” de Blasio said, repeating what has become a refrain of his budget talks. He argued that his approach contrasts with previous administrations that failed to create the savings and reserves that his administration has put away each year, and he defended the increases in city spending he has overseen.

“This is a downpayment on a more fair future for New Yorkers,” he said at one point.

The biggest new investment for the executive budget from prior spending plans, which the mayor had announced at City Hall on Wednesday at a celebratory press conference, is a $125 million infusion towards ensuring that city schools receive adequate “Fair Student Funding,” increasing the funding floor from 87 percent to 90 percent of what schools need citywide.

The executive budget -- which will now form the basis for the next round of negotiations with the City Council before a deal is due by July 1 -- also targets other specific areas for more funding: $41 million for cybersecurity; $103 million for 3,000 security barriers; $30.5 million to expand child literacy programs; $12 million to hire social workers for students in homeless shelters; and $20 million over the next two fiscal years to reduce the backlog of repair and maintenance work at public housing developments.

The city is also funding a $1.2 million study to assess the ThriveNYC mental health program and creating an online parking permit system for $2 million. Another $1.8 million will help provide a Mobile Trauma Response Unit to every borough and $7.1 million will go to workforce development initiatives.

The major areas where the city had to shell out funding related to the “hits from Albany.” The recent state budget foisted about $530 million in added costs on the city, about 25 percent of all new spending in the executive budget, but only 0.6 percent of the total spending plan put forth by the mayor.  

De Blasio was at pains to point out that the city would have to spend $254 million in operating costs to help address the “mismanagement of State-run subways,” a requirement that Governor Cuomo and the state Legislature forced on the city through the state budget after the mayor had refused to fund half of the MTA’s $836 million Subway Action Plan. (The city will also have to spend another $164 million for capital expenditure under the plan).

The mayor also pointed to a $140 million shortfall in state education aid, which prompted the funding he announced on Wednesday. De Blasio later noted in response to a question from Gotham Gazette that the shortfall was based on the amount of funding the city projected it would receive from the state, following the pattern of state aid from the last few years. He said multiple times that the city had expected more education funding from Albany in part because it is a state election year, implying lawmakers would want to be able to boast to constituents in their districts about the school money they delivered.

One key unfunded mandate highlighted by de Blasio will cost $108 million to meet the requirements of the state’s “Raise the Age” law passed last year, under which 16- and 17-year-olds are no longer treated as adults in the criminal justice system and are instead brought under the juvenile justice system and housed in differently facilities from older detainees. The law will partially go into effect in October. The state also cut $31 million to the “Close to Home” juvenile justice program that the city is making up.

The budget also reflects a $159 million increase in spending on homeless services, as part of the mayor’s revamped plan to tackle the crisis. De Blasio defended the spending, which is forecasted to reach $2.1 billion for the 2019 fiscal year, insisting that the city is beginning to “turn the tide.”

“The new approach required opening a lot more shelters...That is a substantial cost and, as with many other things, the cost has grown but it will eventually help us save money,” he said, citing the planned closures of cluster sites and emergency hotel shelters under the approach.

Perhaps the most significant omission from the mayor’s latest budget plan is funding for the Fair Fares proposal, to provide half-price MetroCards to low-income New Yorkers. The City Council, in its official response to the mayor’s preliminary budget, made Fair Fares its top priority and Council Speaker Corey Johnson has vowed to push for it in budget negotiations. De Blasio insists it should be the responsibility of the MTA, but that he is also happy to have it paid for through a tax increase on the city’s highest earners.

Another Council ask that the mayor has so far refused to fund is a $400 property tax rebate for homeowners that make less than $150,000 a year, which would cost roughly $187 million.

The city also maintains its current level of reserves though the Council called for another $500 million in rainy day funds and the city comptroller, Scott Stringer, has also called for increases in the “budget cushion” of savings. De Blasio’s administration has already put away about $5.5 billion in different pots of reserves, including billions in recurring set-asides each year.

The mayor indicated that he was open to negotiating all three items. “We will talk about each of those. We’re going to be really concerned about the pricetag and the impact on our future of each of those choices. But we have not concluded anything on any of them yet,” he said.

Speaker Johnson and Council Members Daniel Dromm and Vanessa Gibson, who respectively chair the finance committee and the capital budget subcommittee, said in a statement that they were “disappointed” that all the Council’s priorities were not funded, but “encouraged” that the city found nearly $1 billion in new revenue.

“The administration should use this additional revenue to institute Fair Fares to help our most vulnerable neighbors, fund a $400 property tax rebate for middle class homeowners, and put away $500 million in reserves to strengthen our financial position moving forward and increase our ability to weather future shocks,” they said.

Notably, de Blasio said the administration could not account for the budgetary effects of a recent executive order signed by the governor to appoint an independent monitor at the New York City Housing Authority. The order requires the city to fund any repair work mandated by the monitor, a currently indeterminable cost that could be in the millions, as first reported by the New York Times. “We are concerned that creates a very problematic precedent and in addition could have many unforeseen consequences for next year's budget,” de Blasio said.

The monitor should soon be chosen by a consensus of de Blasio, Johnson, and a NYCHA tennt leader, as dictated in the Cuomo order.

On the bright side, though the Trump administration seemed to threaten large budgetary cuts that would have affected New York City, major reductions in federal funding have not come to pass. “The negative impact on New York City has been much less than expected,” de Blasio said, though warning of the unpredictability of the winds in Washington D.C. “The federal context shifts not weekly, not daily, but hourly nowadays. We’re all a little thrown by that,” he said.

And the city has not experienced an economic slowdown that was widely expected in the last few years, even as the mayor admitted that wild fluctuations in the stock market continue to confound the city’s observers. Recent economic trends led to the increased revenue the city is using to offset the state maneuvers, and unemployment remains at or near record lows across the five boroughs. Still, some question whether de Blasio’s overall fiscal approach will lead to significant pain down the road, given the large increase in government headcount and associated pension and health care costs.

In a statement reacting to the executive budget, Comptroller Stringer praised de Blasio for the areas in which he is adding targeted spending, but also said reserves need to be boosted. 

"While our economy is in a solid position, with continued hostility from Washington, it is critical that we harness this year’s extraordinary inflow of one-time, non-recurring revenue to bolster City reserves," Stringer said.

"We must continue to vigorously scrub City agencies for savings and I urge the Administration to shine a bright light on the effectiveness of agency spending," the comptroller continued. "We will continue to closely monitor the progress of City agencies toward achieving their goals in the most cost-effective manner possible, particularly those highlighted on our Agency Watch List: the Department of Correction, the Department of Education, and the Department of Homeless Services."

Similarly, watchdog organization Citizens Budget Commission took issue with the mayor's budget plan, with a statement saying that it "increases operating spending at more than twice the rate of inflation and misses an opportunity to bolster reserves as strong tax revenue growth continues." CBC pointed to rising spending and headcount, and ballooning costs of homeless shelters and overtime pay. It also pointed out that the Citywide Savings Plan does not include much by way of new agency savings. CBC did give de Blasio credit for taking "some prudent steps," such as more money to account for pension costs and removal of aniticpated revenue from taxi medallion sales that are unlikely to occur.

“No one sees storm clouds on the horizon,” de Blasio said, noting that the country is experiencing the second largest economic expansion in history. “It can’t go on forever. When it ends, we are going to have serious consequences here in the city. We don’t see it right now.”

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

Max & Murphy Podcast: Political Purity Tests in New York


Jarrett Murphy, left, of City Limits, and Ben Max, right, of Gotham Gazette


April 25, 2018 - Max & Murphy Podcast: Political Purity Tests in New York

m m stanley fritz citizen action 277px

Stanley Fritz is the New York City campaigns manager for Citizen Action NY, a progressive advocacy organization that has endorsed Cynthia Nixon for governor and is an affiliate of The Working Families Party, which has also endorsed Nixon. Fritz explains the work he does as a community organizer and political operative, his views about Governor Cuomo's tenure, his take on the Cuomo-Nixon primary, why moderates and Republicans shouldn't be afraid of progressives, and more.

Listen to the full conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy and guest Stanley Fritz (@StanFritz). You can listen to the episode through the embedded audio below or download the episode wherever you get your podcasts.

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by Ben Max, Gotham Gazette
     

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De Blasio Downplays Placing Donors on Charter Revision Commission


De Blasio town hall smile

Mayor de Blasio (photo: Mayor's Office)


Mayor Bill de Blasio on Wednesday denied any real or perceived conflicts of interest arising from his choice of appointments to his Charter Revision Commission, which includes individuals who have donated to his past campaigns for elected office.

“Of course, whether someone was a supporter or donor was not a factor,” de Blasio said at an unrelated news conference at City Hall, when asked by Gotham Gazette whether he gave any consideration to campaign donations when choosing the 15 members of his commission, tasked with reevaluating the city’s central governing document. “We looked for people who we thought could bring a lot to the process: diverse perspectives by geography and demographic background, diverse perspectives by profession and area of focus in terms of life of the city, folks who have achieved a lot and brought something to the discussion about the civic needs of the city, some people who have directly focused on the democracy issues that are central to the mandate.”

De Blasio created the commission, which began its work last week, to focus on issues around campaign finance reform and voter participation, though it can consider any and all issues related to the functions and structure of city government. Of the 15 members named by the mayor, seven donated a total of $10,220 to de Blasio’s various campaigns dating back to his first run for City Council in 2001. The New York Post also reported that three commission members in total held six fundraisers for the mayor in his first mayoral race in 2013.

Asked if he’d thought about excluding all his campaign donors from consideration, de Blasio refuted the relevance of the question. “I just don’t even get that theory. It’s like, the campaigns happen, they’re all over. Some people gave money, some people didn’t. I don’t even understand where that line of reasoning goes. I want people who I think are good publicly-minded people, who bring perspectives to the process, who are willing to put in a lot of hard work, who clearly share the aspirations of improving the democratic process in the city. If they were involved in political campaigns for me or anyone else is not relevant.”

Alex Camarda, senior policy advisor at Reinvent Albany, a government reform group, said in an email, “When fundraisers are chosen for appointments, it can be perceived as rewarding donors instead of a decision strictly on qualifications."

For much of his first term, de Blasio and his administration were dogged by allegations that the mayor bent the city’s campaign finance laws to the point of breaking and that he did favors for donors. Multiple law enforcement investigations took place and no charges were ultimately filed, though state and federal prosecutors criticized de Blasio’s practices, as did the city’s Campaign Finance Board and a variety of other entities, including government reform groups and newspaper editorial boards. Throughout the scandal and after, de Blasio continued to maintain that his decisions are made on merit and not based on favoritism.  

He offered a similar defense on Wednesday. Noting that some of the donations from his commission members go back years, he said, “I mean it’s getting a little silly.”

“No,” it doesn’t create a conflict, he continued. “If they’re people who have an independent profile of important public work, I don’t care if they gave to me or they gave to someone else or they gave to multiple people. I don’t care. It’s not pertinent to the decision.”

There is a difference of opinion on the other side of City Hall, however.

The New York City Council recently passed a bill to create a different Charter Revision Commission, with members appointed by several elected officials, including the mayor, and with a longer runway to complete its work. Council Speaker Corey Johnson, who, like the mayor, will appoint four members of that commission, indicated Wednesday that he’d avoid the pitfalls of picking donors.

“My plan is to ensure that any of the four Council appointments are not people that have any conflict of interest,” he said in response to a question from Gotham Gazette at an unrelated news conference shortly after the mayor’s. Johnson will get to select the chair of the Council-created commission, which was in the works before de Blasio’s through a bill originally sponsored by Manhattan Borough President Gale Brewer and Public Advocate Letitia James.

The Council’s bill was voted through earlier this month and will automatically age into law by May 11 if the mayor does not sign it. Mayoral spokesperson Freddi Goldstein said in an email that “signing is driven by schedule, but he won't veto.” The Council’s commission will comprise of one member each chosen by the public advocate, the comptroller, and the five borough presidents. The mayor does plan to appoint his four members, according to Goldstein.

Johnson said Wednesday that the membership of the Council-led commission is far from decided but they are looking at “substantive, well-respected people who have a lot to bring in looking at the structure of city government.” The appointments will likely be made by the end of May, he said.

“We will of course vet as we do on every nomination that comes to the City Council. We’re gonna thoroughly vet every single person from the Council side,” Johnson said. “I would hope that the other folks that have appointments to the commission will do the same exact thing. I hope that they similarly live up to that standard. I think the initial names that people have talked about internally, none of them are people that have ever given me money in my campaigns for office and I expect that to be the case when we make final appointments.”

[Read: Mayoral Charter Revision Commission Starts Its Work]

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.



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