New York City Mayor Eric Adams on Tuesday announced that plans to make across-the-board cuts to help the city ride out a possible recession.
Adams cited increased pension contributions combined with expiring labor contracts, rising health care expenses and diminishing Wall Street returns as the main factors in “significant economic headwinds that pose real threats to [the city’s] fiscal stability.
The mayor’s administration said its November Financial Plan is projected to save the city $2.5 billion in the next two fiscal years – nearly a billion dollars for the current fiscal year (2023) and $1.6 billion for Fiscal Year 2024.
“Fiscal discipline has been, and continues to be, a hallmark of my administration,” Adams said in a statement. “Thanks to a successful Program to Eliminate the Gap, we have achieved significant savings without service reductions or layoffs. We are also investing in new needs that will address our housing crisis, make our streets cleaner, combat climate change, and much more.”
The current fiscal year budget, however, has already grown from $101 to $104 since it was passed in June. A City Hall official who briefed reporters said the increase was mostly due to the estimated $1 billion cost of sheltering and assisting the approximately 24,600 migrants who have arrived in New York since the spring.
Adams is seeking reimbursement from the federal government for those expenses.
A so-called “Program to Eliminate the Gap” (PEG) that is intended to facilitate the cuts was announced this past September and impacted nearly every agency in the city.
Each agency head received a memo from city Budget Director Jacques Jiha directing them to make cuts of at least three percent in their fiscal year 2023 and 2024 budgets. They were also told to make further cuts of 4.75 percent for each of the three fiscal years following (2025-2027).
The NYPD, FDNY and Sanitation Department (DSNY) did not meet those targets, however, according to a city hall official who briefed reporters.
“We are working with the agencies because some of them are very challenged, in particular NYPD, in light of all the public safety concerns,” the official said. “So, therefore we have to find ways to eke out the savings out of the budget without impacting their operations.”