NEW YORK (TIP): The 109th Mayor of New York City, Bill de Blasio, unveiled his administration’s first city budget on Wednesday, February 12th.
The $73.7B budget includes no broad base spending cuts, yet more money for closed hospitals and a $530M in new revenue from the proposed tax hike plan to fund universal pre-k. The mayor also projected a $1.1B deficit in FY 2016, while the city still enjoys a surplus.
The primary focus of the mayor’s plan includes universal, full-day pre-kindergarten, which includes $530 million from taxing the rich. De Blasio also outlined a series of stark fiscal challenges presented by impending contract negotiations with all 150 municipal unions. The city employees have all been working on expired contracts. Labor leaders have asked for retroactive raises which could cost more than $7 billion.
The mayor has noted that the city has never had all its labor contracts open at once. “I think the previous administration was given an artificially high level of credit for management,” the mayor said. “The way they budgeted was not appropriate. You cannot ignore open labor contracts for years on end.
In the final years of the mayor’s term there was a particular interest in burnishing the mayor’s legacy,” de Blasio said. The mayor’s budget also calls for inspector general for the NYPD, and enforcement of the paid sick leave act. He has also set goals for investing more money in public housing repairs and maintenance and intends to expand services for homeless youths and cap rent contributions for HIV and AIDS clients.
The de Blasio administration’s FY 2015 preliminary budget is being seen as a fiscally-responsible document that begins to put New York City’s financial house back in order. Here are some important features of the budget. The Structural Deficit: The budget for the current year, FY 2014, remains balanced by relying on $1 billion from the prior year. The FY 2015 plan right now relies on $1.8 billion of resources from the prior year for balance.
The city is already facing a deficit of $1.1 billion for FY 2016. Maintaining the Retiree Health Benefits Trust Fund: The Retiree Health Benefits Trust Fund pays for the cost of retiree health benefits for city workers, including health insurance, welfare funds, and Medicare Part B reimbursements.
The previous plan drained $1 billion from the Trust; the de Blasio preliminary budget restores that funding to the Trust for this long-term obligation. Ensuring DSNY has the Resources it Needs: An unusually heavy snow season this year means reorganizing the budget so the sanitation department has all the resources it needs to ensure the city’s streets remain clear and safe throughout the winter.
The previous plan budgeted $57 million for the sanitation department to respond to snow and winter storms, and the de Blasio administration has increased that allocation by $35 million – covering costs to date, as well as expected costs for the rest of the season. Increasing School Aid from the State: New York State has not kept up with its obligations to fund New York City schools.
In FY 2015, there will be a $2.7 billion gap between the current level of state aid and the funding levels agreed-upon following the Campaign for Fiscal Equity lawsuit. In this preliminary budget, the de Blasio administration is asking the state for an additional $500 million to fund improvements to New York City public schools. The resources will help reduce class size and provide additional teacher supports in early grades; strengthen elementary Common Core academic intervention; and increase funding equity across schools, so students are treated more fairly.