(Bloomberg) -- New York City Mayor Eric Adams proposed a $99.7 billion budget on Tuesday, pitching a pandemic recovery with less of the Covid stimulus funds that padded previous spending plans.
Adams is betting he can squeeze more efficiency out of city government in his first budget by cutting administrative costs to fund public safety and social programs. The plan offers a glimpse into what the future will look like for New York City without a massive infusion of federal stimulus money.
“Every New Yorker knew that our city would come back. It's already happening,” Adams said in a budget address at Kings Theatre in Brooklyn, a 3,000-seat venue where the mayor was supposed to hold his inauguration before it got canceled due to Covid. “We are still in a time of profound concern and this city is prepared to keep New Yorkers safe and healthy no matter what the future brings.”
The budget address -- usually delivered at City Hall in Manhattan -- was accompanied by the pomp and circumstance usually reserved for inaugurations and other higher profile events. There were prayers from multiple religious officials, the singing of the National Anthem and the Black National Anthem, and an autobiographical video recounting the mayor's life that aired before he took the stage to Frank Sinatra's “New York, New York.” Attendees bought $7 cans of water.
The executive budget, New York City's largest ever proposed spending plan, represents a $1.2 billion increase from what Adams unveiled in February when the mayor proclaimed that fiscal discipline would be the “hallmark of my administration.” After taking office, Adams asked city agencies to cut spending by 3% and said he found savings of $411 million over fiscal 2022 and 2023.
Adams said he will increase spending for the Department of Correction and the New York Police Department. That includes more spending on NYPD overtime, which Adams had pledged to reduce by 50% in an interview last September with Bloomberg News.
The budget also allocates an additional $5 billion for housing and $256 million for subway safety, homelessness, and a dedicated gun crime unit in the city's medical examiner's office. Other measures call for expanding earned income tax credits, safe-haven beds for people experiencing homelessness and a discounted subway fare program. It also adds $118 million for parks and other public spaces, including a pilot program to add sealed garbage baskets and restoring controversial parking rules suspended during the pandemic.
“It's going to be hard for people to hate me,” Adams said.
The fiscal 2023 spending plan, which would take effect July 1, now moves to the City Council for approval. Many of the council's members were elected on far more progressive promises than the mayor and on Monday revealed plans for $1.3 billion in additional spending.
Spending Hike
Adams, 61, is pitching a larger spending plan than his predecessor Mayor Bill de Blasio, who oversaw a massive expansion of city government during his two terms and whose last executive budget proposal was $98.6 billion. That budget climbed to $102.8 billion by November, according to a press release, plumped up with pandemic aid.
In total, New York City is expected to receive about $26 billion in Covid funds, which have to be spent by fiscal year 2026, according to City Comptroller Brad Lander.
“The city needs to spend its remaining federal Covid funds effectively,” Lander said in a statement released after Adams's budget address. “This budget does not include a clear action plan for how to make the best use of these funds.”
Lander also called for more dollars to be added to the city's rainy-day fund and criticized Adams's decision to hire 500 new correction officers “without making urgent reforms to the staffing management failures that have left our jails in crisis with nearly a fifth of officers calling out sick each week.”
The New York Housing Conference, a nonprofit affordable housing policy and advocacy organization, said Adams's $500 million annual increase in affordable housing spending won't make a “meaningful dent” for millions facing rising rents and hundreds of thousands living in public housing. Inflation and rising interest rates will absorb nearly all of the new capital budget, resulting in the same number of new units already in the pipeline, the group said.
The city plans to spend $2.1 billion on affordable housing in fiscal 2023. During the campaign Adams promised to increase affordable housing spending to $4 billion annually.
“While we are encouraged that he has increased housing spending at all, he has simply not done enough,” the nonprofit said in a statement. “And millions of his constituents across the five boroughs will pay the price.”
Economic Malaise
While unemployment has abated in other cities, including nearby Long Island and parts of Northern New Jersey, New York City is dealing with a March unemployment rate of 6.5%, compared to 3.6% across the U.S.
While the budget is balanced for the coming year, Adams is projecting deficits of $3.9 billion in 2024, $3.4 billion for 2025 and $3.7 billion in fiscal 2026.
Adams said record Wall Street profits and bonuses won't continue at the current pace and record-high vacancies have weakened the commercial office market. Subway ridership has stagnated at around 60% of pre-pandemic levels and has been hit by service delays, worker shortages and commuters who say they fear an increase in transit crime.
Still, Adams says his administration expects a complete jobs recovery by 2024. The city has $6.3 billion in reserves and tax revenues for 2023 have also been revised by $392 million as a result of a growth in property tax collection.
“Despite the massive shocks to our system in the past two years, our city enters fiscal year 2023 on strong financial footing,” Adams said.
On the topic of jobs, Adams called out the successful unionization of an Amazon warehouse in Staten Island earlier this month.
“New York City is the largest union town in America, and just a few weeks ago, this union town got even bigger — thanks to our brothers Chris Smalls and Derrick Palmer,” Adams said, asking them to stand for applause. “Thank you for standing up for your co-workers and inspiring working folks all across America.”
Read More: New York City's Renewed Vibrancy Is Hiding Deep Economic Pain
The spending plan will increase the NYPD budget by 3.7% to $5.6 billion, according to budget documents.
Adams, a former cop, made public safety a core tenet of his campaign in the face of an increase in shootings and subway incidents. That's continued throughout the first months of his administration, with high-profile incidents including the fatal shooting of two police officers in Harlem and a mass shooting on the city's subway this month that left 23 people injured, including 10 from gunshot wounds.
“When you hear people say we don't need our police, let me tell you right now, I will support our police,” Adams said.
The mayor has already begun making changes to the police force, including a more aggressive push to go after low-level infractions, more visible transit patrols and the revival of a plainclothes policing unit that was disbanded for misconduct. As part of the budget, Adams is allocating $1.5 million to hire additional staffing for his blueprint to end gun violence, and $1.2 million to install license plate readers and cameras on the cars of the revived plainclothes police unit in addition to their body cameras.
In his speech, Adams also renewed calls to state lawmakers to extend mayoral control of the city's public schools -- which have lost some 120,000 students in the last five years. He also highlighted $101 million for sumer programs and $7.4 million to fund new dyslexia screening sites and literacy programs, an issue of personal importance to Adams, who has spoken extensively about his learning disability.
At the end of his budget address, Adams joked that there are two types of people in the world: “New Yorkers and those who wish they lived here,” he said. “I'm glad I'm a New Yorker.”
©2022 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
