By: Serach Nissim
Mayor Bill de Blasio and the City Council are racing against the Wednesday night deadline, negotiating the budget before the fiscal year closes. As reported by Crain’s NY, as they come towards the end of negotiations, experts say the number for next year’s budget will be close to $100 billion. Fiscal experts, however, are worried that the spending is based on expectations from past growth which may not be accurate, and an influx in federal spending which will not last indefinitely. “Federal money is not recurring and is being used to fund programs permanently,” said Ana Champney, director of city studies at the Citizens Budget Commission.
Fiscal experts warn that the fiscal year 2022 budget may exceed $100 billion and potentially could stay that elevated over the next three years. “We’ve normalized something that’s pretty close to $100 billion by 2025, on a regular basis,” said Rahul Jain, state deputy comptroller for New York City, adding that city’s budget would jump from last year’s $88.2 billion up to roughly $100 billion this year, thanks to an additional $20 billion in aid granted from the federal government to help combat the pandemic.
A figure as large as $100 billion, however, ought not be taken lightly. “That’s an embedded number now which is going to create substantial problems going forward,” said Stephen Berger, former director of the city’s Financial Control Board in the 1970s, referring to the $100 billion budget. “This is a budget with no reflection on the long term—no cost take-outs and no effort at managing spending.” In 2013, the budget under Mayor Michael Bloomberg’s third term was just $76.3 billion, said Nicole Gelinas at the Manhattan Institute, which is 33.9% less than the spending under Mayor de Blasio. For comparison sake, the entire state of Florida’s had a budget of $92.2 billion for 2021.
As per Crain’s NY, the ballooning budget is not just a function of generous federal aid, but the aftermath of the booming economy which the city enjoyed before March 2020. Mayor de Blasio had so much income streaming into the city that he had no choice but to expand spending to meet revenue. He bolstered the city’s workforce, doled out raises, renegotiated union contracts, invested billions in Education adding a Universal pre-K program, and spent money to combat homelessness. “As revenues grow, you have to be able to use them in some way,” said Jonathan Rosenberg, director at the Independent Budget Office. “Absent lowering taxes, you have to find a way to put that money somewhere, and because of accounting rules, we couldn’t sock it away in a rainy-day fund until recently.”
