New York City’s $89 Billion Budget Includes Discount Transit Fare Plan

NEW YORK — Mayor Bill de Blasio and Corey Johnson, the City Council speaker, shook hands Monday on a $89.2 billion city budget that included a major concession by the mayor to provide funding for discounted subway and bus fares for some of the poorest New Yorkers.

The budget continues the sustained rise in spending that has come on de Blasio’s watch. It is $4 billion more than the previous budget, including $254 million more for the Metropolitan Transportation Authority, called for by Gov. Andrew Cuomo and initially resisted by the mayor, as well as another $125 million in reserves as a hedge against an economic downturn.

The budget was the first de Blasio had to negotiate with Johnson, who was selected as the Council speaker in January on a pledge to make the city’s legislative body more independent of the mayor. The council is expected to approve the budget Thursday.

Johnson had pushed hard to get the mayor to agree to include funding for subsidized MetroCards, an initiative known as “fair fares.” The program will begin in January, with New Yorkers whose income is below the federal poverty line — about $25,000 a year for a family of four — qualifying for MetroCards at half the regular cost. It is estimated that about 800,000 people could be eligible for the subsidy, although far fewer are expected to enroll in the first year.

The mayor said that while he supported the idea, he believed it should be paid for with a dedicated tax on high-income earners — something that would require state action. But Johnson and his colleagues persisted.

At one point last month, during a late-night negotiating session with the mayor at Gracie Mansion, the mayoral residence, people briefed on the interaction said Johnson walked out after de Blasio offered a much smaller number to finance the fare subsidy. (City Hall has disputed that account.)

But they came to an agreement on the fare proposal Wednesday during a late session at City Hall. Further budget details were still being hammered out Monday ahead of the public handshake between de Blasio and Johnson in the City Hall rotunda.

The new budget is 19 percent larger than de Blasio’s first, a $75 billion spending plan approved by the City Council in June 2014. A significant contributor to that growth has been the steep increase in the number of city workers, making the city’s payroll and head count, with about 300,000 workers, the highest it has ever been.

“What have we achieved over five years now with these budgets?” de Blasio said. “It’s a strategic investment concept.” He said that city spending on police had made New York the safest big city in the country, and that spending on early childhood education had improved public schools, which make the city more appealing to residents and businesses and support economic growth. “I think these were very smart investments,” he added.

The budget announced includes $106 million for the fair fares program. That is expected to be enough to pay for the subsidy for six months, with further financing to come in future budgets.

The budget also includes $125 million to be set aside as a financial reserve, in addition to the $1 billion in reserves de Blasio has maintained as a general reserve in previous spending plans.

Johnson had pushed a property tax relief plan that would have given a $400 rebate to many homeowners, but that proposal was left out of the budget agreement.

The budget reflects a one-time boost in city revenues from the repatriation last year of offshore hedge fund and corporate money; those movements were in response to the recent federal tax law changes and an earlier change closing a loophole relating to hedge fund managers.

While the lead-up to the budget agreement included sometimes-tense wrangling between the mayor’s office and the Council, Monday’s event was jocular and full of good cheer.

When Johnson jumped the gun on the ceremonial handshake, de Blasio joked: “The protocol has been violated! Shut down the press conference!”

It also highlighted the altered dynamic between the mayor and the city’s legislative body, with the Council under Johnson embracing its role at center stage.

The spending plan included other Council priorities, including $150 million in capital budget spending to make schools more accessible for disabled students.

The capital budget also included money to make improvements in public housing, under an agreement announced earlier Monday between the city and federal prosecutors to fix intolerable conditions at the New York City Housing Authority.

De Blasio acknowledged that pressure from the Council persuaded him to give up on his opposition to the subsidized MetroCard.

“I believe that Speaker Johnson said the words ‘fair fares’ to me an unfair number of times,” the mayor said, drawing laughter. “It’s a profoundly good and moral idea. I felt that from the beginning. The challenge was always how to make it work.”

De Blasio said the passion of Johnson and the Council mattered to him, as did their agreement that the new spending would not go to the MTA — the program will be administered by the city. They also agreed, he said, that additional funding for the authority, elsewhere in the budget, would be a one-time payment and did not represent a long-term increase in city support for the transit system. Johnson gave a speech that was almost as long as the mayor’s, while de Blasio sat beside him nodding. Later, Laurie Cumbo, the Democratic majority leader, commandeered the microphone and led dozens of Council members in a cheer for Johnson.

“Let’s give it up for Corey!” she said, before giving bouquets of flowers to Johnson, the Council Finance Committee chairman Daniel Dromm and other Council and staff members.

“And Mr. Mayor, we didn’t forget about you,” she said, handing him his bouquet last.

“I was reliving high school here,” he said, “that I wouldn’t get flowers.”