Gotham Gazette Wed, 16 Oct 2019 11:59:14 +0000 Joomla! - Open Source Content Management en-gb (Webmaster) City Council Push for Budget Transparency Falls Far Short De Blasio City Council members

Johnson, de Blasio, Dromm (l-r) (photo: John McCarten)

At several budget hearings earlier this year, New York City Council Speaker Corey Johnson took a hard line on transparency. He insisted that Mayor Bill de Blasio’s administration was being less than forthcoming on how money is spent and was hampering the Council’s charter-mandated authority to review and approve the city’s spending plan. To wit, in its official response to the mayor’s preliminary budget in April, the Council proposed adding 123 new units of appropriation -- budget lines that explain expenditures -- in order to more clearly and specifically show what the city is spending money on.

When the city’s new $89.2 billion budget was approved last week, however, the Mayor’s Office of Management and Budget only added a total of five new units.

“We’re going to work with the Council,” de Blasio promised at at the release of his executive budget proposal in late April, two weeks after the Council’s response, when Gotham Gazette inquired about the push for more units of appropriations. “We have, over the years, been adding. We’re open to adding more. That’s an ongoing discussion, which we’ve had again today with the Council. Stay tuned.”

But there was little news to stay tuned for. The five new lines in the adopted budget include four under the Department of Information Technology and Telecommunications -- two each for the Mayor’s Office of Media and Entertainment (MoME) and the NYC Cyber Command office which both fall under DoITT’s purview. Those units are for personal services (PS) which covers salaries and wages of agency employees, and other than personal services (OTPS) which includes costs such as office supplies, equipment, maintenance, and the like. In total, those budget lines cover $25.2 million in expenditures for MoME and $65.8 million for the Cyber Command.

The fifth unit of appropriation was created under the Department of Housing Preservation and Development, to allow the Council to look at expense funding allocated for the New York City Housing Authority, about $255.4 million for the 2019 fiscal year, which begins July 1 of this year.

It should be noted that the separate capital budget, which outlines city spending on infrastructure,includes six new budget lines -- one for the Brooklyn Public Library and five within Parks Department expenditures.

In April, at a hearing on a mid-year modification to the current annual expense budget, the Council first showed indications that it wouldn’t approve OMB’s requests without greater disclosure from the administration. Then, at a May hearing on the executive budget, prior to the new units of appropriation being added, Council Member Daniel Dromm, the chair of the Council’s finance committee, which leads the budget process at the Council, excoriated OMB officials for their refusal to be more transparent, insisting that the administration “must discontinue the longstanding practice of using vague and overbroad units of appropriation” over more specific ones.

Dromm continued, “While such a shift is understandably resisted by the Mayor because it would restrict his ability to transfer funds between programs without oversight and to avoid seeking budget modification approval from the Council, it is necessary to facilitate the Council’s and the public’s understanding of agency spending and performance and to more transparently track the Administration’s priorities.”

But the Council’s response to Gotham Gazette’s queries about the units of appropriation were more tempered. “[The] Council is very pleased with the end results of this budget process and is committed to more transparency measures, including continuing the push for more lines of appropriation,” said Jennifer Fermino, a spokesperson for the speaker, in a statement.

A spokesperson for Council Member Dromm did not respond to a request for comment.

Maria Doulis, vice president of Citizens Budget Commission, an independent fiscal watchdog that advocates for increased budget transparency, among other changes, said the Council’s push for transparency likely fell by the wayside as it negotiated larger priorities such as discounted MetroCards for low-income New Yorkers.

“It might be best to come to some sort of agreement about this outside the budget because when you’re negotiating a budget, it’s all about the dollars and cents and not necessarily how the dollars and cents are presented,” Doulis said in a phone interview. She said the five new units are a “micro step forward” and that the Council must remain committed to a long-term approach, which could happen through a dedicated working group.

She also noted that the City Council has failed to push for transparency at crucial moments. She pointed out, for instance, that the mayor announced a new labor deal with the United Federation of Teachers on Wednesday but without details of how the spending will be reflected in the city budget. “So all these Council members are on this press release and they’re happy to laud and support this effort,” Doulis said, “but I didn’t hear any of them saying, ‘And we’d like to see a full accounting of what exactly the city will be paying for on this.’ So I don’t know that transparency is any better or worse than it was last year, or a couple of years ago under Mayor Bloomberg. In my mind it’s pretty much the same or marginally better.”

Although Doulis did say that the city’s budget is enormous and complex, and that the administration does publish more budget documents than other local governments, she said there should nonetheless be improvements. “The question is, can the average citizen ask a basic question about services that he or she cares about and their costs and look in the budget to find an answer fairly simply and easily,” she said, “and the answer to that is ‘no.’”

by Samar Khurshid, senior reporter, Gotham Gazette

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City Council Push for Budget Transparency Falls Far Short Wed, 20 Jun 2018 04:00:00 +0000
City Council Takes Harder Line on Mid-Year Budget Modifications speaker corey johnson council members

Speaker Johnson, center, CM Dromm, and Finance Director McKinney, background (photo: Emil Cohen/City Council)

Last month, before the New York City Council issued its budget demands for next fiscal year to Mayor Bill de Blasio and before the mayor eventually ignored nearly all of them in his Executive Budget plan, the Council called in administration budget officials to testify on a modification to the current year’s budget.

In past years, budget modifications have been subject to the same perfunctory hearing. Budget officials present a quick overview of proposed mid-year changes in spending and revenue estimates, and the Council briefly reviews and approves them, allowing the administration to divert additional resources to agencies that need them and to cut back in other areas. More often than not, the modification is presented to the Council as a fait accompli.

This year, City Council Speaker Corey Johnson and finance committee chair Council Member Daniel Dromm took a different tack. Officials from the Office of Management and Budget sat as several Council members took them to task, critiquing everything from the substantial uptick in spending on homelessness to their consistently low projections of the city’s revenues. And instead of voting on the modification there and then, the Council held another hearing the next day to approve it, with no changes.

What seemed to be mostly a performative power play, however, was a preview of things to come. In the vein of increased independence from the administration and a refusal to rubberstamp the mayor’s budget dictates, the Council speaker made clear he was establishing a new status quo.

Going forward, a spokesperson for Johnson explained, the Council will take a stronger stance on proposed budget modifications, pressing the administration ahead of time on anticipated and proposed changes to see if the Council should even move forward with receiving a modification request. Hearings on budget modifications will no longer be cursory, the spokesperson said, and the administration will have to work harder to justify requests.

"This is about budget transparency, which is what I promised before becoming speaker and which remains a priority,” Johnson said in a statement to Gotham Gazette. “This is taxpayer money, and it’s important that we know as much as possible so we can make the right decisions when it comes to funding, and so we can keep the public informed.”

The new approach comes as the administration and Council are amid negotiations on the budget for the next fiscal year, which begins July 1, with the Council pushing harder for cuts to spending, increased reserves, and more transparency by way of adding additional units of appropriation to break up large lump-sum pots of money. “The Council has made its position clear. More units of appropriation will help us make more informed decisions when it comes to funding, and will give the public the ability to see where their money is going,” Johnson said in a separate statement.

Freddi Goldstein, a mayoral spokesperson on budget matters, noted that the administration gives the Council enough time to review the budget modifications, which usually accompany the preliminary budget for the next fiscal year. The most significant budget modification takes place in November, four months into the fiscal year. The budget itself is subject to weeks of hearings where the Council hears testimony from budget officials and agency heads, affording them the opportunity to examine modifications as well.

“OMB is focused on transparency, which is why we already provide the City Council with any budget modifications with ample time for review and have always welcomed any and all questions the Council may have,” Goldstein said in an email.

Last week, in presenting his $89 billion Executive Budget proposal, de Blasio also insisted that negotiations with the Council have been “collegial and productive” and that the administration was working on adding the transparency that the Council has requested. “We’re going to work with the Council,” he said, when Gotham Gazette inquired about units of appropriation being added to the budget, though indicating none had been added in this new round of updates. “We have, over the years, been adding. We’re open to adding more. That’s an ongoing discussion, which we’ve had again today with the Council. Stay tuned.”

For budget watchdogs, the Council’s new strategy is promising, if not limited.

“It’s clear the Council is trying to assert itself in budgeting,” said Maria Doulis, vice president of Citizens Budget Commission, an independent fiscal watchdog. “But nothing they do is going to change the fact that it is an executive-centered budget process. It’s driven by the mayor.”

Indeed, since de Blasio took office, the budget has steadily risen by billions each year. The Council has repeatedly called for more agency efficiencies and savings but has largely capitulated as they also advocate for funding their own priorities worth hundreds of millions, which is happening again this year, highlighted by Johnson’s push for both Metrocard subsidies for low-income New Yorkers and property tax rebates for middle-class homeowners (while de Blasio has been resistant to both).

“It’s good that the Council wants to increase its scrutiny of the budget,” Doulis added. “But it should remain focused on the big picture issues and topics that affect the long-term fiscal health of the city.”

by Samar Khurshid, senior reporter, Gotham Gazette

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City Council Takes Harder Line on Mid-Year Budget Modifications Wed, 02 May 2018 04:00:00 +0000
Fulfilling Johnson Promise, City Council Significantly Increases Its Operating Budget Johnson Dromm City Council budget

Council Members Cumbo, Johnson & Dromm (l-r) (photo: John McCarten)

The City Council’s Committee on Finance voted on Thursday to increase the Council’s operating budget to $81.3 million, an increase of nearly 27 percent from the current fiscal year’s budget of $64 million, following through on Speaker Corey Johnson’s promise to increase internal resources and produce a stronger role for the legislative body in areas such as land use and oversight.

The City Charter allows the Council to decide its own budget, with no required oversight and without any interference from the mayor. After the budget is approved, the Council can insert its spending plan into the mayor’s executive budget, which follows after preliminary budget hearings have concluded and the Council issues its response to the mayor. A new city budget is due by the July 1 start to fiscal year 2019.

As the city’s budget has increased dramatically over the last few years, the Council’s spending has followed suit, though at a different scale. In the previous four-year session, the Council inherited a $51.5 million budget in 2014, with $38.6 million for Personal Services (PS), a budget line that covers salaries for Council members, aides, and committee staffers. The rest covered Other Than Personal Services (OTPS), expenses such as rent and office supplies.

By the current fiscal year, ending June 30, the Council’s budget had grown to $64 million, an increase of 24 percent over four years under former Speaker Melissa Mark-Viverito. Spending on salaries and staff pay increased significantly to $49.2 million, owing to a pay raise that Council members voted themselves in 2016, increasing their annual salaries 32 percent from $112,500 to $148,500 (while also banning most forms of outside income and removing bonuses for leadership positions). That same year, Mark-Viverito also allocated an additional $25,000 to each Council member to boost staff member salaries.

Johnson came into office vowing greater independence from the mayor and increased oversight of city agencies. Among his top priorities were beefing up the Council’s land use division, to ensure, among other things, that Council members could play a more proactive role in the administration’s many proposed neighborhood rezonings across the city.

“I am fulfilling a promise I made during the Speaker’s race to enable the Council to fulfill its mission as the legislative body of New York. I have always been clear that doing that would mean an increase in staff and resources," Johnson said in a statement to Gotham Gazette. "This budget reflects that. For example, two core functions of the Council are to legislate bills and negotiate the city budget, and this budget increases staffing and adds resources to the Legislative and Finance divisions. I’ve added staffing for the Charter Commission and Oversight and Investigation Unit, which I promised during the Speaker’s race. And we have also added to Land Use, another core function of the Council. I am excited to see what a fully empowered City Council will do moving forward.”

“I think that we need to do a better job about having the resources in our land use division so that we are fully staffed up to be more proactive,” Johnson told reporters in January. On a number of occasions Johnson compared the small Council land use staff to the much larger City Planning Commission. “Since we’re the final arbiter when it comes to land use matters, we should have a large land use division that can do some of the work up front, even before our community boards give a recommendation,” Johnson said.

He also committed to stronger oversight of city agencies, with a newly empowered Committee on Oversight and investigations led by Council Member Ritchie Torres. The Committee is setting up its own investigative unit with former prosecutors, professional investigators, and former journalists.

“The Council’s taking on a whole lot of new...responsibilities to a certain extent in terms of oversight and investigations and other areas of the budget, I think which is going to make the Council a more equal partner with the mayor,” said Council Member Daniel Dromm, chair of the finance committee, after Thursday’s hearing. “And I think in order to be able to do that, that’s why we needed the increase in the operating budget for the City Council.”

Much of the new funding, about $9 million, is for 111 new committee staff hires, increasing the total headcount of committee staff from 147 to 258. Another $2.9 million is being doled out equally to Council members so they can increase their staff pay or hire more staff for their district offices. The OTPS funding increased by about $4.1 million.

Most of the major divisions of the Council will see a significant increase in funding to account for additional staffing. The new Oversight and Investigation unit will be comprised of 20 staffers with a budget of $1.5 million. The finance division will see its headcount increase to 66 positions, up from 39, with a budget of $5.2 million, up from $3.1 million. The land use division, which budgeted for 14 staffers last year, will have 21 staffers with a $1.8 million budget, up from $1.25 million.

Most of the divisions will see a headcount increase, save for a “Policy and Innovations” division that is being eliminated entirely.

The Council also included placeholder funding to staff a potential Charter Revision Commission, which the Council is hoping to create through legislation independently of Mayor de Blasio’s recently announced commission. The budget line, which simply reads “Charter,” funds 20 committee staffers with $1.7 million.

“It’s clear the Speaker wants the City Council to take on a more aggressive role and that may require beefing up analytic capacity and staffing,” said Maria Doulis, vice president of Citizens Budget Commission, an independent fiscal watchdog. “But just like with other city agencies, that increase should be justified...the Council has to articulate clearly the goals and what it hopes to accomplish, and demonstrate that it’s still keeping its operations lean and demonstrate to the taxpayer that it’s delivering results for the investment.”

Doulis said it was “reasonable” for the Council to want to enhance capacity in key areas, including land use. But insisted it should be “within limits.” She also agreed that the Council’s budget should undergo public oversight as well. At Thursday’s hearing, as is usual with the Council’s budget, there was little discussion and the vote concluded in less than five minutes. The detailed outline of the budget had yet to be uploaded to the Council’s website, where the committee hearing agenda is posted in advance.

“They review everything else,” Doulis said. “There should be a review of their own spending.”

“There’s been plenty of discussion around it as far as I know,” Council Member Dromm said, when asked by Gotham Gazette if the Council should hold an oversight hearing of its own budget. He pointed to the speaker race -- in which each candidate, including Johnson, indicated that they would increase the Council’s budget -- and news coverage of the Council’s enhanced responsibilities. “I think there’s been a lot of opportunity to discuss this.”

by Samar Khurshid, senior reporter, Gotham Gazette

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Fulfilling Johnson Promise, City Council Significantly Increases Its Operating Budget Thu, 22 Mar 2018 04:00:00 +0000
What’s The [Data] Point? 2.7%, with Alex Heil of the Port Authority whats the data point

What's The Data Point? Episode 24 -- 2.7%, with Alex Heil of the Port Authority [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

alex heil wtdp pic

Alex Heil, chief economist for the Port Authority of New York and New Jersey, joined the podcast to discuss his economic forecasts for the Port Authority region; key trends around use of Port Authority bridges, tunnels, ports, and airports; and infrastructure investments that are in motion or needed.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulisMariaDoulis), and guest Alex Heil of the Port Authority (@PANYNJ). Listen below or download wherever you get your podcasts!

by Ben Max, Gotham Gazette

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What’s The [Data] Point? 2.7%, with Alex Heil of the Port Authority Wed, 20 Dec 2017 05:00:00 +0000
With Some Contracts Now Expired, De Blasio Administration Begins Next Labor Negotiations 23589013804 3bdd4cedec z

Mayor de Blasio at DC 37's union headquarters (photo: Michael Appleton/Mayor's Office)

As numerous labor contracts for thousands of city employees begin to expire, the de Blasio administration is already in the midst of new talks with municipal unions. The process revisits a key element of Mayor Bill de Blasio’s early tenure -- when the city faced an unprecedented situation wherein all the city’s labor contracts were expired -- and of the incumbent mayor’s first-term record: de Blasio regularly boasts of bringing to terms the outstanding workforce uncertainty he inherited.

With negotiations underway with several unions, fiscal watchdogs say the de Blasio administration needs to implement cost cutting and efficiency measures while ensuring contracts are resolved without inordinate delay.

Upon taking office, de Blasio and his team, led by labor relations chief Bob Linn and budget director Dean Fuleihan, moved to quickly settle the city’s labor union contracts, all of which had been expired for years under former Mayor Michael Bloomberg. Of the city’s 355,286 employees, 337,666 are represented by unions and the city settled contracts with all but 1,350 or 0.4 percent of them. But, even as the administration touts that success, both sides are already back at the table as 30 of the settled contracts have expired, between 2016 and 2017, and 27 more are set to expire in the next few months. Bob Linn and his team are in regular negotiations, according to mayoral spokesperson Freddi Goldstein, and he was not made available for an interview based on that busy schedule.

Fiscal watchdogs generally praise the administration’s efforts in settling the expired contracts, particularly the inclusion of healthcare savings for the first time and reasonable wage increases, but recommend improvements that will ensure long-term fiscal stability. Some wanted to see municipal employees required to contribute to their health care, but that did not happen, while others said the administration should not have pushed the cost of retroactive raises as far into future budget obligations.

Among those unions whose contracts have expired are the Patrolmen’s Benevolent Association, which represents around 22,200 rank-and-file NYPD officers, and the Uniformed Firefighters Association, which represents more than 8,000 firefighters. De Blasio and the PBA just celebrated coming to terms on a largely retroactive contract in January.

In September, the contract for District Council 37, the union that represents the second-largest group of civilian employees in the city, is due to expire. With more than 84,000 city employees on its rolls, accounting for about 25 percent of unionized city employees, DC 37 is second to only the United Federation of Teachers (UFT), the union whose deal was perhaps most-anticipated and, when reached in 2014, set the “pattern” for the other unions in terms of annual raises.

Unions, including the likes of DC37, UFT, PBA,1199SEIU, 32BJ SEIU and the Hotel Trades Council, also employ significant political clout in the city. DC 37 and its affiliated political action committee, for instance, have made campaign contributions to candidates for mayor (they donated the maximum $4,950 to de Blasio), public advocate, comptroller and City Council. DC 37 endorsed de Blasio for reelection in January. The endorsement came just two days after the mayor released his preliminary budget for fiscal year 2018 that proposed creating 100 new school crossing guard supervisor positions, which were created for DC 37 workers. The mayor later denied that the endorsement was part of the deal, and the positions were eventually included in the adopted budget that passed in June. De Blasio has also been endorsed for reelection by a number of other prominent city unions. The PBA, which has been a thorny opponent of Mayor de Blasio and the progressive-dominated City Council, has decided to focus on swaying City Council races in this year’s election cycle. It’s unclear if the union will get involved in the mayoral race. De Blasio is seen as an overwhelming favorite in both the primary and the general, in no small part because of his support from labor unions, which help drive voter turnout in what are expected to be very low participation elections.

Union labor issues pose significant challenges to the city’s fiscal health, particularly if -- or when -- the city experiences an economic downturn, experts say.

“One of the measures of prudence is what the costs were supposed to be when Mayor de Blasio took office compared to what they actually are,” said Nicole Gelinas, senior fellow at the Manhattan Institute, a conservative think tank. The last budget under Mayor Bloomberg predicted that salaries and wages for city employees in fiscal year 2018 would account for $26.4 billion in the city’s budget, Gelinas pointed out, but have actually reached nearly $27.3 billion. “That clearly adds strain to the budget,” she said.

Part of the increase stems from pay raises that didn’t match accompanying savings. “The mayor signed these agreements without really asking for givebacks in return,” Gelinas said.

Maria Doulis, vice president of the Citizens Budget Commission, a nonpartisan fiscal watchdog, echoed Gelinas’ point. Doulis said the last round of negotiations lacked a needed focus on efficiency in work rules, for instance negotiating staggered shifts for NYCHA workers or the causes of overtime in uniformed departments. “Those are important but weren’t done last time because the pressure was to get [agreements] done quickly and responsibly.”

But Doulis also said that the city had shown significant progress by working collaboratively with the unions on including health care savings in the negotiations. The de Blasio administration bargained with the Municipal Labor Committee, which collectively represents the city’s labor unions, to implement what it pegged as $3.4 billion in health care savings -- from $400 million in fiscal year 2015 to $1.3 billion in fiscal year 2018. There are a variety of measures in those savings plans, including a focus on preventive care so that union members avoid costly emergency room visits. Savings in excess of that projection are meant to provide bonuses to the city workforce. Doulis said the administration should build on that success.

The urgency with which the administration moved in 2014 to put labor agreements in place owed to long-expired contracts. But that also meant the city missed an opportunity to agree upon significant savings, Doulis said. “The savings that can come from productivity enhancements can only be recognized prospectively, not retroactively,” she said. “So it’s important to get contracts done in a timely way. Letting contracts go too long introduces fiscal risk to the city. And employees need to be able to plan their lives too.”

Gelinas reiterated that urgency is costly in labor negotiations. “Expired contracts, de Blasio really used that as an excuse,” she said. “It’s not good to have them expired for years on end but it’s not good to do a bad deal just to say that you did a deal.”

Gelinas said the city has fared well so far because of a strong and stable economy, and that a downturn after such an extended period of expansion would put the city in fiscal jeopardy as well as give the mayor less flexibility to cut costs. “Health care costs are increasing less fast than a few years ago,” she acknowledged, “but they’re still going up. The only reason the city can afford it is the economy is doing so well.”

She insisted that any further salary and wage increases should be paid for with cuts in the costs of benefits, namely health care. Although pensions are another part of the equation, and the city’s pension obligations have ballooned over the years, the city has a limited role in that respect since pensions are decided by the state Legislature.

In a view shared by other fiscal watchdogs, Gelinas suggested that workers share some of the costs, which currently fall almost entirely on taxpayers because of guaranteed benefits for city employees. She noted that health care benefits currently cost the city $10.1 billion and will grow to $11.7 billion in two years. “Keeping that from growing would be good savings,” she said. “Avoid the increase and share costs half and half with workers.”

And the onus is on the mayor to devise creative solutions, she said. “Bill de Blasio certainly hasn’t wanted to cut labor costs in his first term,” she said.

De Blasio, for his part, has recognized health care savings as an avenue where the city can go further. “I think the last agreement was very affirming to me that there's, again, much more where that came from,” he said at the annual State Financial Control Board meeting on August 2, referring to health care costs for public employees. “There's a willingness from our labor partners to think creatively. They understand this is about the longer term fiscal health of the city, they understand that if they want government to be effective, we have to keep finding healthcare savings, and I think there's a surprisingly strong atmosphere of partnership compared to, sort of, what the assumptions were previously. I think everyone has become sober together about the fact that we have to do a lot more on that front, and it is available to us.”

Asked about the current round of negotiations, de Blasio spokesperson Freddi Goldstein said the process was ongoing. “When this Administration came into office, no city worker was under contract,” Goldstein emailed. “Today, over 99 percent of the unions have reached a fair deal. As contracts begin to expire over the next year, we're confident we'll once again be able to reach deals that are both fair to workers and fair to taxpayers.”

by Samar Khurshid, senior reporter, Gotham Gazette

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With Some Contracts Now Expired, De Blasio Administration Begins Next Labor Negotiations Thu, 10 Aug 2017 04:00:00 +0000
Savings Debate Intensifies Ahead of City Budget Modification de blasio budget graph

Mayor de Blasio in a budget presentation (photo: NYC Mayor's Office)

Reading the tea leaves and heeding calls to be more prepared for an inevitable recession, the de Blasio administration has formed a new unit in its budget office tasked with coordinating additional agency savings, a move expected to be more formally announced in conjunction with the coming November budget modification.

City tax revenue growth has slowed, but a recession is not yet here, and may not be imminent. Though alarm bells have been ringing of late, city tax revenue shows modest growth of about 3.8 percent for the first quarter of fiscal 2017 compared to the same period in fiscal 2016 (July-September), which is in line with forecasts. Still, as the budget update session for the current fiscal year arrives, the de Blasio administration, the City Council, and outside budget watchdogs see warning signs.

The key questions are what exactly the City is doing to fortify finances and whether it will be enough when the city’s financial picture is indeed more bleak. Mayor Bill de Blasio, a Democrat, and this City Council have been exceedingly fortunate over their three years in power, as the city has been “flush with cash,” as one City Council Member memorably said at City Hall.

While the mayor has taken significant steps to build reserves, de Blasio has also overseen a drastic increase in city spending, with an operational budget now over $82 billion in the current fiscal year. And while he is taking additional steps -- like the formation of the new Citywide Savings Unit at the Office of Management and Budget -- it is not yet clear to what extent de Blasio will follow the advice of budget watchdogs like the Citizens Budget Commission and city Comptroller Scott Stringer.

“It’s the first quarter, so it’s hard to see to the end of the fiscal year,” said Maria Doulis, vice president at Citizens Budget Commission, an independent watchdog. Doulis said she is eager to see the November budget modification from the City, but that previous forecasts appear apt and it is not time to panic.

“We’re not yet in a recession, but there’s reason to be cautious, because non-property tax revenues are not growing strongly,” Doulis said. Indeed, property taxes are buoying several other flagging avenues of tax intake (see chart below). The city is in a solid place despite the increased budget spending, Doulis said, because of good reserves. Still, “Looking at [Q1 tax revenues], this argues very strongly for an increased PEG program, or savings program,” Doulis said. “The revenue figures argue for caution and restraint in spending.”

In brief, watchdogs want to see de Blasio identify additional savings and limit new spending. The big question for the November modification to the fiscal 2017 budget, Doulis said, is, “Will there even be a savings program?”

A PEG, or program to eliminate the gap, calls on city agency heads to identify a certain percentage or amount of agency spending for potential cuts, then leaves up to the Mayor and his budget office which recommendations to accept. Despite calls for such a program, de Blasio has resisted, instead encouraging his commissioners to find savings. The Citywide Savings Program that de Blasio has touted has been bolstered by re-estimates of hefty expenditure projections, not enough by real agency savings, watchdogs say.

There is still time to build up the city’s fiscal cushion to have resources necessary if revenues don’t meet projections, Doulis said. “It’s hard to call these things, but the last time around, Mayor Bloomberg started to issue calls for a very strong PEG before the recession had officially hit New York City,” Doulis said. “That’s the way you want to do this. That’s the way you want to approach this. You don’t want to hack away when you’re in freefall.”

City Comptroller Scott Stringer has said the city should have a “budget cushion” of 12-18% of its operational budget in reserves -- the current number is about 10%.

The de Blasio administration has steadfastly defended its approach to budgeting. At the announcement of the adopted fiscal 2017 budget in June, de Blasio told Gotham Gazette he was quite comfortable with the budget cushion in place, but that the City would continue looking for additional savings.

“At this year's FY17 Adoption, the Mayor promised to find areas of savings and we are making good on that promise,” de Blasio spokesperson Freddi Goldstein said in a statement. “We found savings in the preliminary, executive and adopted budgets and there will be additional savings in our upcoming November Plan. As always, we remain cautious with our forecasts and confident that NYC is in strong fiscal standing."

De Blasio and his representatives regularly say that reserves are at “historically” high levels, which is true, but the city budget is also higher than it has ever been, city personnel hiring has been expanded significantly over the past three years, and city pension obligations are greater than ever before.

The city general reserve is at $1 billion, far higher than past levels, and there are other savings set aside for the city’s capital plan ($500 million) and retiree health benefits ($4 billion).

The de Blasio administration is eyeing additional savings to be able to show the City Council and others at the November budget modification, the new Citywide Savings Unit, with a headcount of four, began its work in September.

“There’s nothing that suggests the overall forecast is at risk,” said Ana Champeny, Citizens Budget Commission director of city studies. OMB was fairly conservative with projections, she said. A de Blasio administration source noted that OMB’s forecast was more cautious than the City Council’s.

The Council recently raised its eyebrows in public fashion, a seeming warning shot ahead of the upcoming release and reaction to the November budget modification. A Wall Street Journal article published October 26 cited City Council data showing slumping tax revenue and citing a 1% drop in those revenues for April through August 2016 compared to the same period the year before.

This report prompted warnings about the city’s finances from the New York Daily News editorial board and New York Post columnist Nicole Gelinas, a budget expert. On the other hand, Greg David of Crain’s New York Business, another columnist and budget expert, wrote in response to a string of Journal stories on the city economy that no, a recession is not in fact setting in. David pointed out that after such robust growth over the past several years even a slight drop in revenue could be expected and is not cause for alarm.

According to a representative from the City Council’s finance division, it used April-August data because that was what was available at the time; the Q1 data -- which shows a better picture of 3.8% revenue growth year over year -- was not yet in.

At Gotham Gazette’s request, the de Blasio administration provided Q1 data (see below) on October 28.

Regardless of which tax revenue data is used (though experts agree a Q1 comparison is preferable), the story is generally the same, especially in conjunction with recent unemployment numbers, which show a slight rise: economic growth is slowing. While property tax revenues are strong and increasing, other streams, like personal income and sales taxes, are virtually flat, and transaction taxes have decreased (all Q1 FY17 over Q1 FY16). But, the difference between 'tax revenues are down 1%' and 'tax revenues are up 3.8%' is not insignificant, both in real economic meaning and political narrative.

The Council finance representative said that the office is currently performing its typical November forecast for the rest of the current fiscal year and beyond. This year’s forecast has been about the same as last year’s, the representative said, for about 3-3.5% growth in tax revenue. A Council spokesperson did not respond to a request for comment about the Q1 numbers or the new OMB savings unit.

A key risk factor identified by voices like The Daily News editorial board, Gelinas, CBC, and others, is de Blasio’s expansion of the city payroll by thousands of employees. “Instead of being on notice to demonstrate efficiency, agencies have been encouraged to spend,” the News wrote on Monday.

Gelinas has been warning about growing personnel costs over the course of de Blasio’s tenure, especially with regard to healthcare and pension bills. There is less risk for the City in the short-term on this issue, but big obligations will be due in the future. As mentioned, the city has retiree health benefit reserves, but in the case of a recession, Doulis of Citizens Budget Commission warns that that money should not be touched to fill operational budget gaps.

That’s part of why Doulis wants to see a PEG from de Blasio to boost general reserves, which can be tapped during recession. CBC also wants to see other cost-savings measures taken. “There is so much to do on procurement in terms of savings,” Doulis said.

“The City is really behind on procurement practices -- they’re not following general best practices in the ways the City buys things in general,” she said. The purchase of goods and services is “decentralized at agencies” instead of being under the watch of the Department of Citywide Administrative Services, or DCAS, where it should be, Doulis said. The City could be much more efficient, saving time and “$100 million right off the bat,” she said.

Goldstein, the de Blasio spokesperson on budget matters, did not respond to a request for comment on Doulis’ call for procurement reform.


FY17 Q1

FY16 Q1


















Transaction taxes




All other*




TOTAL >>>>




*All other includes CRT, Utility, Cigarette, Hotel, Other, STAR, Audits

Numbers are in the millions.

by Ben Max, Gotham Gazette

Read more by this writer.

Savings Debate Intensifies Ahead of City Budget Modification Wed, 02 Nov 2016 04:00:00 +0000
De Blasio Releases New $82B Budget with 'Targeted Investments,' Additional Savings de blasio budget presentation fy 17

photo: Demetrius Freeman/Mayoral Photography Office

Mayor Bill de Blasio released his $82.2 billion Executive Budget for Fiscal Year 2017 on Tuesday, increasing spending by about $100 million from his proposed preliminary budget while expressing concern about a possible economic slowdown and the effects of consistent underinvestment by the state and federal governments.

The executive budget “continues a trajectory of progressive, responsible and honest budgeting,” the mayor said at the release at City Hall. “We believe that disciplined spending is the basis for everything we need to do,” he added. De Blasio outlined several hundred million dollars in new spending offset by similar amounts of new savings, while stressing “targeted investments” and focusing a good deal on a major infusion of funds to help rescue the troubled city public hospital system.

The mayor emphasized the city’s strong current economic situation with jobs at an all-time high of 4.3 million, of which 249,000 were added in just the last two years. But he cautioned that the growth of tax revenue, which was an average of 7 percent for the last five years, was slowing down. For fiscal 2016, the growth rate was projected at 3.6 percent and is expected to fall to 1.9 percent in fiscal 2017.

He also spoke of the decreasing support for the city from the state and federal government, repeatedly stressing the state’s failure to keep commitments. Since 2010, he said, the state alone had withheld about $2 billion in funding from the city under the Aid and Incentives for Municipalities program. When asked by Gotham Gazette during a question-and-answer session after his presentation whether he agreed with Gov. Andrew Cuomo’s assertion that the state could pull back on funding toward the city since the city is experiencing such good economic times, de Blasio said absolutely not.

Funding at the federal level is an even bigger uncertainty, the mayor said, considering there will be a new face in the White House come January. De Blasio’s biggest concerns were federal infrastructure investments and funds for counter-terrorism.

Despite these concerns and apprehensions about the effects of global financial instability on New York City’s economy, the executive budget added a number of new initiatives. All these, the mayor stressed, would be paid for through $1.25 billion in new savings through fiscal 2017, along with the $1 billion already identified in the preliminary budget, under the Citywide Savings Program. This is the city’s largest spending reduction program in five years, garnered through debt savings, spending re-estimates, and agency efficiencies. The mayor also said he would push city agencies to find hundreds of millions more in savings in time for the budget modification in November.

To insulate the city against negative pressures from international markets and the widely foreseen economic slowdown, the mayor added more funds to existing city reserves. While the preliminary budget had already laid out $1 billion for the General Reserve and $500 million for the Capital Stabilization Reserve, the mayor added another $250 million to the Retiree Health Benefits Trust fund, bringing it to a total of $3.7 billion.

Earlier on Tuesday, the administration highlighted a number of new spending initiatives included in the executive budget, coinciding with details that were released to different media outlets ahead of time.

There is added funding to triple the number of intensive care mental health units at the Rikers Island prison complex and enhance health services at city jails. About $8.7 would go to setting up eight new PACE (Program to Accelerate Clinical Effectiveness) units. That funding will increase to $24.2 million in fiscal 2020. An additional $2.7 million was added to expand pre-arraignment screenings in Manhattan, and $2.5 million to expand Hepatitis-C treatment in city jails. The budget also makes another $1.9 million in capital investments to improve patient care through telehealth and to add 12 new mini-clinics. Another $170 million will be invested to create an alternative housing facility for adolescents incarcerated at Rikers Island.

The executive budget also added a $160 million investment in Fiscal 2016 for the ailing municipal health system, New York City Health + Hospitals (H+H), which will increase to $180 million for fiscal 2017. In the preliminary budget, the mayor made a one-time investment of $337 million to keep the system afloat and the new funding stems from a comprehensive report, One New York: Health Care for Our Neighborhoods, which lays out a plan for overhauling the system. “We have to intervene aggressively here,” de Blasio said at the Tuesday release, citing a projected shortfall of $1.8 billion by fiscal 2020 if the city did not step in to reform H+H operations. The shortfall will be met through $700 million in expense reductions and $1.1 billion in new revenue.

About $66 million in additional money will pay for the city’s homeless services plan, of which $38 million would be offset by the recent merger of the Human Resources Administration and the Department of Homeless Services.

The city will also make more investments in public safety, starting with $70 million to create a new police precinct in Southeast Queens, satisfying a decades old demand, the mayor said. The budget also added $5 million for 50 new ambulance tours in fiscal 2017 (increasing to $10 million the following year) and $5.5 million to prevent and treat opioid addiction.

On Monday, at a press conference in Bay Ridge, the mayor announced a $183 credit for 664,000 homeowners across the city for paying water and sewer bills. This is included in the executive budget along with a $250 credit for eligible multi-family properties. Together, these will cost $122 million.

Another announcement made on Monday was “incentive funding” for the Board of Elections. The mayor set aside $1.5 million in the executive budget to study systemic issues with the BOE and said another $18.5 million would be included in the adopted budget if the board agrees to make significant reforms.

The executive budget also increased school spending with $161 million for raising the Fair Student Funding level for all schools to an average of 91 percent (at least 87 percent at each school) in fiscal 2017. This is expected to grow to $310 million in the next fiscal year with state support. The budget also includes $17 million for the Mayor’s Equity & Excellence plan, to improve college access, and $9 million to ensure elementary schools comply with state physical education mandates.

There was a massive bump in capital spending in the executive budget. A total of $685 million will be dedicated in the current budget and the upcoming Ten Year Capital Strategy to accelerate completion of the shafts for the Brooklyn/Queens section of Water Tunnel No. 3., speeding up the timeline for activation of the tunnel and building a new connection to Staten Island.

Nearly $280 million will go towards reconstruction of crucial city bridges: the Ed Koch Queensboro Bridge, the Brooklyn Bridge, and the Manhattan Bridge. Four new ferries will be purchased and the ferry pier at Brooklyn Navy Yard will be reconstructed for a total of $42 million in capital funds.

The budget also puts $21 million in capital funds towards new snow removal equipment for neighborhoods with narrow streets. The need was highlighted in the wake of Snowstorm Jonas this winter and identified in an After Action Report by the Department of Sanitation. The city will also spend $10 million in capital funds for two new animal shelters in the Bronx and Queens and $50 million for an indoor pool on Staten Island. An additional $186 million will go to repaving 1,300 lane miles of roads in fiscal 2018.

The executive budget also increases investment in climate resiliency, including $170 million for stormwater management infrastructure. It adds funds for after-school and community programs and an increase in seasonal employees at the Parks Department.

Maria Doulis, vice-president of the Citizens Budget Commission, a nonpartisan, nonprofit budget watchdog, sounded two big notes of caution in the executive budget. “There’s an incredible amount of new spending here,” she said, stressing that the savings that would offset this spending were not coming from productivity. “It relies on debt service savings, re-estimates and on Medicaid revenues, and not on agency efficiency initiatives.”

Although she acknowledged the mayor’s ongoing efforts to find agency efficiencies through the November budget modification, Doulis pointed out that these did not constitute a bulk of savings.

The other “big item” for Doulis is the city’s support for NYC Health + Hospitals. “That plan has many risks,” Doulis said. “It’s relying on H+H to achieve expense reductions that it’s not been able to do previously, on MetroPlus reimbursements and on federal waivers for Medicaid money, which are highly uncertain.”

Doulis also expressed concern with the massive capital plan, which totals $67.1 billion through fiscal 2020. “That’s bigger than some ten year plans I’ve seen,” she said. “The debt service is already very high. There needs to be some scrutiny over the capital plan.”

In a statement on Tuesday, City Council Speaker Melissa Mark-Viverito and Council Member Julissa Ferreras-Copeland, chair of the finance committee, also expressed reservations over the administration’s proposal to close the operating gap for Health + Hospitals, which they said was “contingent on substantial State and Federal cooperation which has not yet been assured.”

They also faulted the executive budget for failing to adequately invest in the city’s youth and immigrants. “As the Council begins our Executive Budget hearings on May 6th, we will continue to strongly push for critical investments that will greatly expand employment opportunities for our young people by increasing the number of year round and summer youth jobs, advocating for vital legal services and workforce development skills to support our growing immigrant population and fighting to combat food insecurity in our City,” they said.

Along with those hearings, de Blasio's team and the Council will negotiate over the next two months to achieve a budget deal before the July 1 start of the fiscal year. At this point, changes are likely to be minimal.

City Comptroller Scott Stringer, in a statement, commended the mayor’s executive budget for “enhancing our ability to weather unforeseen future challenges,” through new agency savings and boosted city reserves. He praised the increased funding for security at homeless shelters, reforms at the Board of Elections and expanded access to physical education in public schools.

On Health and Hospitals, however, he reserved judgement. “As an analysis released by my office last year made clear, setting New York City Health + Hospitals on a more sustainable financial path forward is a critical priority for our City,” he stated. “However, more information is needed to fully assess the proposed plan to ensure that all New Yorkers can access quality healthcare.”

by Samar Khurshid, senior reporter, Gotham Gazette

Read more by this writer.

De Blasio Releases New $82B Budget with 'Targeted Investments,' Additional Savings Tue, 26 Apr 2016 04:00:00 +0000
The City Council's Complicated Budget Math MMV and colleagues housing hearing

Council Speaker Mark-Viverito and colleagues (photo: William Alatriste)

Last week, the City Council’s finance committee voted to increase the Council’s operating budget for fiscal year 2017, which begins July 1, by $3.1 million, bringing it to a total of $64 million, a five percent increase over last year’s adopted budget. Each year, the Council is able to determine its own budget and insert that number into the Mayor’s Executive Budget.

The increase was to be expected, with necessary adjustments for the 32 percent raise in Council member salaries, from $112,500 to $148,500 annually, that was passed last month. It also takes into account a bump in funding for Council members to run their offices -- for rent, staff salaries, and other general expenses. Most Council members will now receive $441,000, up from $384,000 last year, in operating funds. (The Speaker provided a $25,000 increase last month, coinciding with the Council member raises, both retroactive to Jan. 1; and another $32,000 has now been added for fiscal 2017.)

But, in adjusting, readjusting, adding to, and subtracting from different sections of its budget, the Council has given little clarity, if any, about how the pay raises were retroactively provided, why a few Council members receive more office funds than most others, and how Council Speaker Melissa Mark-Viverito was able to provide a $25,000 increase in office budgets to all members in February, mid-way through the fiscal year. This increase, aimed at allowing members to increase salaries for their aides, coincided with the Council voting through its own raises, though Council sources say that it was simply coincidental.

A Council spokesperson declined to provide further clarity about the shifting funds, but it is clear that, as usual, the Speaker has access to pots of money to be used at her discretion. Budget watchdogs say this is to be expected and that executives should have flexible funds, but that clear and open accounting is paramount.

“You want to give the Speaker the flexibility to be able to respond to needs that may change throughout the year, but there needs to be back-end transparency and accountability on how those funds are spent,” said Dick Dadey, executive director of Citizens Union, a government reform group. “If there’s vagueness at the beginning, there needs to be clarity at the end.”

Dadey noted that the significant changes in the Council’s compensation structure necessitate transparency on the source of funds and an explanation of what programs or expenses might not have been incurred as a result of moving those funds to pay for salary increases.

It isn’t clear how much flexibility is actually built into the City Council budget. Adjustments are made over the course of the financial year and the Speaker does move money around, but it’s not always evident where the money comes from, or how it is allocated initially.  It is true, like with the larger city budget, that spending appropriations are accounted for in the end, with expenditures available to those seeking that information.

City Council operating budget documents show a somewhat complex picture. In the $64 million budget just adopted by the finance committee and voted through by the full Council, $49.2 million was allocated to Personal Services (PS), up from $44.9 in last year’s adopted budget. The funds for Other Than Personal Services (OTPS) decreased by about $1.25 million, from $16.2 million to $14.8 million.

In that PS increase, about $2.9 million more is allocated for Council members to spend on personnel. On the face of it, this is good news for the aides who will be paid higher salaries. But the budget doesn’t specify how many aides individual Council members employ or how that money is distributed. It’s likely the $2.9 million came from the increase in Council member office budgets - $57,000 more for each member than the Fiscal 2016 adopted budget. The OTPS allocation for Council members decreased by about $57,000 in total, staying fairly level.

The PS allocation is divided by Council members, committee staffing, and the council service division. The Council members allocation needed a significant increase to the pay raises. Meanwhile, in the Council Service PS funds for the Speaker’s office, there is a drop of more than $500,000, even though there is only one fewer employee than last year - this could simply be because expected hiring did not occur. Most categories of Council committee staff and services that lost employees saw a reduction in budget, which corresponded with redistribution across other categories. A Council spokesperson did not provide an explanation for this $500,000 shift.

Also included in PS funding is an increase in appropriation for the Council's new bill drafting unit, which began in 2015 after being created through the Council's 2014 rules reforms. Funded initially at about $695,000 in fiscal 2016, the bill drafting unit is now up to about $860,000. There is also an increase in the PS funds toward Public Tech, which is now being allocated about $715,000 after $347,000 in fiscal 2016. This increase may be related to the Council's new "labs" website.

In the OTPS portion of the budget, there is even less clarity. The OTPS for Council Central Staff is a lump sum appropriation of $9.4 million, down from $10.6 million last year, but projected spending is itemized. Still, there is wiggle room for moving funds around.

Three allocations for contracted professional services seem particularly puzzling. In last year’s budget, the allocation for professional legal services was $500,000, for professional computer services it was $523,500, and then, finally, the third and rather vague category ‘Professional Services - Other’ received a $564,000 allocation. These items, this year, were set at $150,000 for each of the first two, and only $64,000 for the third. Under the same appropriation, Office Equipment Maintenance was budgeted with $250,000 last year and only $65,000 this year. Again, given several days to explain the differences, a Council spokesperson was not willing to do so.

Maria Doulis, vice president of the Citizens Budget Commission, a nonpartisan budget watchdog, acknowledged that the Speaker has flexibility with Council spending under her control, and did not take issue with it. “If you think of the Speaker as an agency commissioner then she’s got a lot of discretion to manage her agency budget.”

Doulis believes the Council budget changes are more or less innocuous in the grand scheme of the $82 billion city budget and that a number of considerations, some perhaps political, go into the allocations. But, she sees these as standard operating procedure and said the current Council and Speaker have been “pretty good about pushing for more transparency.”

“In the general budget, if we got as much detail, that would be super transparent,” she added, comparing the Council’s accounting of its budget to the larger city budget.

The Speaker’s office, however, did not have answers to any lingering doubts. “I don’t have those answers,” said Robin Levine, a Council spokesperson, in response to Gotham Gazette’s queries on these issues.

“It’s concerning that answers that should be readily available are not,” said Dadey of this response. “When information that should be readily available is not, it raises more questions than it should. It can erode public trust.”

Asked last week about the increases to the Council operating budget, Mark-Viverito explained that not only did the Council have to allocate the pay raises they recently passed, but that she has been making sure that the Council can “fulfill our functions effectively.” To do so, she said, “we need to ensure that we have the proper staffing and resources.”

“Prior to my becoming Speaker,” Mark-Viverito added, “the Council budget had been deprived over the years, and we had a lot of correction to do, beefing up the Council to really be a professional body, where we had staff in the legislative body, the finance staff, to really do our work effectively.”

[Related: City Council Raises Provoke Questions About Staff Pay]

by Samar Khurshid, senior reporter, Gotham Gazette

Read more by this writer.

Note: this article has been edited to include additional information on Council bill-drafting and public tech allocations after further examination of the Council budget.

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

The City Council's Complicated Budget Math Sat, 19 Mar 2016 14:16:50 +0000