Council Member Ferreras-Copeland (photo: John McCarten)
The City Council held its final hearing on Mayor Bill de Blasio’s $84.86 billion executive budget proposal on Thursday, with Council members raising issues that have persisted throughout budget season and expressing concerns about the federal budget proposal released this week by the Trump administration.
“The city adopts the Fiscal 2018 budget at a time of great uncertainty about the future of critical programs and services that help many of our most vulnerable populations,” said Council Member Julissa Ferreras-Copeland, chair of the Council’s finance committee, in a prelude to a deal that must be reached between the Council and de Blasio by the July 1 start to the new city fiscal year. Many are expecting a deal much sooner than that deadline, though.
Ferreras-Copeland called the White House’s budget proposal “devastating,” pointing out that it outlines cuts to food stamps, Medicaid, housing programs, and the earned income and child tax credits. She worried that many city agencies hadn’t developed contingencies to cope with those potential cuts.
Although Ferreras-Copeland commended the de Blasio administration for funding key initiatives -- air conditioning in public school classrooms, immigrant support services, planning for borough-based jails in the effort to close the Rikers Island complex -- and reducing excess capital appropriations, she criticized the lack of funding for universal school lunch, senior services, youth jobs, and the Emergency Food Assistance Program. The budget, “as it currently stands, does not appropriately reflect the vision of both the Council and the Mayor,” she said.
Ferreras-Copeland said the administration had failed on a few fronts, particularly in reforming the capital appropriation process and providing transparency. She cited, for instance, the mayor’s announcement of a partial hiring freeze for administrative and managerial positions. “Because the Administration did not issue guidance on this plan until well into the budget hearings, agencies were unable to provide us any detail about how it would affect them,” she said. She also called for increasing city reserves, from the current 10.7 percent of adjusted spending to somewhere between 12 and 18 percent.
Dean Fuleihan, de Blasio’s director of the Office of Management and Budget, defended the proposed budget while promising to continue working with Council members on their priorities. Fuleihan presented a grim assessment of how President Trump’s budget would affect the city, insisting that the administration has “responded to the uncertainties and challenges we face by maintaining historic reserves and expanding our savings program, while continuing to make investments that strengthen New York’s future.”
Reform of the capital projects management system seemed of particular importance at the hearing and Ferreras-Copeland wondered why projects experienced consistent delays and cost overruns. Council Member Brad Lander later released an issue brief at the hearing, prepared in concert with other members, that showed 44 percent of capital projects that cost more than $25 million were severely late and 42 percent of projects were severely over budget. On average, the brief noted, projects were $30 million over-budget and 700 days late.
“This is not the fault of the de Blasio administration but we have a shared responsibility to do more to fix it,” Lander said.
Fuleihan agreed with that sentiment, while insisting the administration was making incremental improvements. “We need to work together...we need to be careful, we need to be thoughtful about this,” he said. The city will pass both a new fiscal year operational spending plan and a revised 10-year capital spending plan. The capital plan is revised every other year.
Fuleihan also promised to provide more detail about lump sum appropriations for a number of city agencies, an issue that Ferreras-Copeland said prevents the Council from full oversight. He also explained the implementation of the administration’s partial hiring freeze, which includes a variety of caveats, as the mayor had indicated it would.
Another issue that has been raised throughout the budget process is increased funding for nonprofit human services providers that are contracted by the city. These providers are increasingly facing financial insolvency and Council members have been advocating for the administration to provide contract increases. Fuleihan noted that it was an “inherited” problem and that the city has done more in the last three years than prior administrations. This year, the mayor’s preliminary budget also included a six percent wage increase over three years, at a cost of $200 million, for employees of these nonprofits. “Do we need to do more? Obviously,” Fuleihan said. “We’re saying we need to do more and we’re committed to doing more.”
Council Member Jimmy Van Bramer, chair of the Committee on Cultural Affairs, Libraries, and International Intergroup Relations, pushed the administration on a $150 million capital need for city libraries and for $40 million in increased allocations for cultural institutions facing the threat of federal funding cuts.
Fuleihan stressed that the city has made significant investments in libraries, including capital allocations and operational funds for six-day service. “There’s always significant needs there, I’m not minimizing that...It’s another area where I think we all need to see some improvements,” he said of library capital projects. Cultural institutions, he said, were “part of the conversation we’re having,” and vowed that the administration will fight back against any proposed cuts.
Both Council Member Ydanis Rodriguez and Council Member Laurie Cumbo reiterated a request for funding “Fair Fares” to give discounted Metrocards to low-income New Yorkers. It is one of the few budget requests that the mayor has absolutely refused to fund, insisting that the state or state-controlled MTA should provide the funding. Fuleihan repeated that rationale at the hearing. “The mayor is more than sympathetic towards this but he feels that the appropriate place to fund it is the MTA,” he said.
Cumbo also asked for the administration’s plan to expand the Summer Youth Employment Program (SYEP), an ongoing point of negotiation between the administration and the Council. Fuleihan, pointing out that the city has increased SYEP slots by almost double in the last three years, said expanding the program was not as simple as funding more slots. “There are two things: how much capacity are we actually able to do over the summer, and if we agree on moving forward, how do we move forward,” he said. “So I think there’s still questions for us to work though.”
Following Fuleihan, Comptroller Scott Stringer also presented the Council with his preliminary analysis of the White House budget proposal and its impact on the city, finding that the city could lose $850 million in social services, housing and education funding. “We have to anticipate the impact of these significant cuts,” he said, “and be prepared with a sound and responsible city budget.”
And although he said that the city’s economic outlook remains strong -- with a projected surplus in fiscal 2017 that will “equal or exceed” the previous year’s $4 billion surplus -- he said revenue and job growth were slowing. “I remain concerned that we are not adequately prepared for a potentially rocky road,” he said.
“We’re not being alarmist, I’m not here today to say we’re in doomsday,” he later added, “but, look, part of why we’ve been successful as a city is, we navigate what comes our way. We’re forward thinking about it...This is our moment to be very strategic and cautious.”
Stringer listed a few of his own priorities for the budget, calling for reductions in the cost of citizenship applications to relieve the financial burden on 670,000 eligible immigrants. He also reiterated the need to fund human services nonprofits, releasing an accompanying analysis of the industry, and finally insisted on procurement reform at the Department of Education.
State Comptroller Thomas DiNapoli also released an analysis of the federal budget proposal on Thursday, calling for increased reserves to weather economic uncertainty and the potential rollback of the Affordable Care Act. “The President's proposed budget would make steep reductions in programs upon which city residents rely and poses a major risk to future city budgets,” DiNapoli said in a statement.
With Thursday’s hearing, the public facing part of the budget process comes to an end, save for the rallies and press conferences that may occur to lobby for additional funding for specific causes. The City Council and the mayor will now move to closed-door negotiations to hammer out the final tweaks to the spending plan. Last year, the final budget deal reduced spending by about $100 million from the proposed executive budget. Council Speaker Melissa Mark-Viverito and Mayor de Blasio ceremoniously shook hands on that budget agreement on June 8, the earliest agreement in 15 years. The next budget is due by July 1, the start of the 2018 fiscal year.