With Headwinds Looming, De Blasio Unveils $88.7 Billion Budget
Posted February 1, 2018 7:46 p.m. EST
NEW YORK — For all of Bill de Blasio’s first term, New York City saw uninterrupted growth in tax revenue and continued economic expansion, enabling him to spend like no other mayor in the city’s history, growing the payroll and workforce to a new level.
With the Trump administration threatening to cut federal aid, the coming year’s budget represents the first potential check to the mayor’s spending habits.
On Thursday, de Blasio released a preliminary budget that contained few new projects and offered little guidance on how the city would deal with possible cuts from Washington. In fact, the mayor called for an increase in spending to $88.7 billion in the next fiscal year, and he adjusted spending up for this fiscal year, to $87.4 billion or about $3 billion more than projected at this point a year ago.
City officials acknowledged that at least $700 million was already at risk because of changes to federal payments for public hospitals and a dampening of the value of tax credits for affordable housing. The situation could worsen when President Donald Trump releases his budget later this month.
De Blasio also underscored the “risks from Albany” in his presentation, and highlighted the harm of a projected $400 million in cost shifts or cuts to state funding for the city in Gov. Andrew M. Cuomo’s budget proposal.
Notably, the mayor’s plan includes no new money for the ailing subway system, a source of constant bickering between the mayor and Cuomo. The governor has sought more than $400 million in additional city spending for the Metropolitan Transportation Authority; de Blasio has countered that about the same amount should come from the state, accusing Albany of diverting funds from the transportation authority over the years.
De Blasio said that he would not consider adding money for transit “under current circumstances.”
“The responsibility resides in Albany,” he said. “The power resides in Albany.”
The mayor is scheduled to go to the Capitol next week for the so-called Tin Cup Day, the joint legislative budget hearing where city leaders make their pitches for funding. Republican lawmakers have made the ritual particularly unpleasant for de Blasio, and this year is not likely to be an exception. As if to underscore his fraught relationship with Albany, when the mayor spoke of threats from the Trump administration, he lumped them together with threats from Albany.
“We are keeping a watchful eye on the risks that are coming our way up I-95, and down the New York State Thruway,” de Blasio said.
A spokesman for the state Division of the Budget, Morris Peters, said that this year’s state budget allocated $16.5 billion in aid to the city, which he said was more than 40 percent of funding awarded to all local governments, and a half-billion dollar increase from the previous year.
If the preliminary plan had been expected to provide hints as to how the mayor would adjust the spending-as-investment approach to municipal governance that characterized his first term, there were few signs of such a shift.
The record number of city workers — currently at 320,000 full- and part-time employees — is still set to rise to 324,000 this year. The city is pressing forward on a plan to secure 300,000 units of affordable housing, and add a public preschool program for 3-year-olds.
Carol Kellermann of the nonpartisan Citizens Budget Commission called it a “wait-and-see” budget.
When the mayor last updated his plan in November, she said in an email, “we looked forward to more information on how the city would respond to possible losses of federal and/or state support in the January preliminary budget. Still waiting and not seeing.”
The absence of new transit funding could open a third front in the battle over who gets blamed for the failures of the subway system, and the cost of fixing it: Corey Johnson, the City Council speaker, has vowed to put more money into the budget for the authority.
Johnson has appeared interested in trying to move the mayor on the issue, but on Thursday, he drew closer to de Blasio and said that he would not support more money for the MTA without guarantees from the authority that the money would be well spent.
“I would be open to more money if we had real accountability,” he said. “I think the mayor wants to fix the subway system, but does not want the city to be left on the hook.”
The 2019 budget — about $16 billion greater than when de Blasio took over City Hall in 2014 — included hundreds of millions of dollars in new spending, about $150 million more for the homeless as well as money for expanding early education and accelerating the rollout of body-worn cameras for police patrol officers.
That spending is made possible, in part, because the city continues to benefit from huge and growing revenue from property taxes, which were expected to rise to $27.7 billion in the 2019 fiscal year and up to $30 billion by 2021.
The fairness of the rates paid by New Yorkers — which can vary dramatically by neighborhood and housing type — are the subject of a lawsuit. de Blasio has vowed to look at changes to the system but on Thursday said he did not support lowering property taxes.
De Blasio also stressed that new spending had been offset by savings at city agencies, though not by cuts to workers whose salaries and benefits make up more than half the city’s budget.
“This administration is focused on making New York the fairest big city in America,” de Blasio said in a statement before his presentation. “Every decision in this budget was weighed on whether it brought us closer to that goal.” Some of the biggest spending increases could be found in the capital plan. About $750 million more would go to the mayor’s housing plan, and some $82 million to buy new boilers in public housing buildings, where some residents have suffered from a lack of heat this winter. Another $72 million over this fiscal year and next would go to building four prekindergarten locations.
For some budget watchdogs, the uncertainty over federal cuts was a reason for the city to buttress its reserves and demonstrate restraint. But doing so could also provide a perverse incentive to leaders in Washington or Albany, who may see such measures as a sign that the city could afford to pay more.
“It’s a losing game to show money,” said Doug Turetsky of the city’s Independent Budget Office. “You have to be cautious,” he added. “Others” — meaning federal and state officials — “are looking for where they can make their budgets fall in place.”