Finance

City Council Proposes $74 Billion Budget

May 8, 2014
By Steven Wishnia

Expanding summer youth jobs, reducing outsourcing, hiring 1,000 new police officers, making school lunches free, and helping homeless people obtain housing are among the priorities in the City Council’s preliminary budget for fiscal year 2015, released April 23.

The Council proposal would add $257 million to Mayor Bill de Blasio’s $73.7 billion preliminary budget, released in February. It projects that increased tax revenue will leave the city with a $700 million surplus—but that could be quickly eaten up if city workers get pay increases.

The Council budget is intended to complement the mayor’s. Its introduction praises the “progressive and inclusive direction” of his agenda. It also lauds de Blasiofor ending the “budget dance” of the Bloomberg and Giuliani administrations, in which the mayor would propose cuts to “libraries, youth and senior programs, health care, firehouses, and education,” the Council would wrestle to sustain their funding, and the cuts would then “reappear in the following year’s Preliminary Budget. And the process would repeat all over again.”

The proposal “will resonate on multiple fronts, from safety to unemployment, housing to homelessness solutions,” Councilmember Ydanis Rodriguez said in a statement, “particularly when it comes to measures aimed at lowering unemployment with quality job growth.”

The mayor’s preliminary budget called for reducing the Summer Youth Employment Program, which gives youths aged 14-24 jobs for up to seven weeks, to 28,000 slots. Last year, more than 135,000 people applied for slightly less than 36,000 jobs in the program, but the state minimum-wage increase and a loss of federal and private funds means the same number of slots this summer would cost $13 million more. The Council would expand the program to 46,000 jobs, which would cost $27.2 million.

Eliminating the $1.75 fee for school lunches, the Council adds, would mean that kids wouldn’t feel stigmatized for being poor enough to qualify for free food and “ensure all students eat a healthy lunch in school.” It would cost $24 million, but bring in $60 million in federal and state aid.

The Council proposes hiring 1,000 new police officers to replace those lost by attrition since 2003. While this would cost $94 to $98 million a year, the Council contends it would reduce spending on police overtime, almost $635 million in fiscal 2013.

It also says that reducing the city’s reliance on outside contractors will lower costs, strengthen the city’s workforce, and enable better oversight.

On housing, the Council urges the mayor to create a program to give rent subsidies to at least 5,000 homeless households that find apartments, and providing that aid for longer than the two years now-defunct Advantage program did. It also urges giving people in the shelter system priority for federal Section 8 rent subsidies, which it says would decrease family shelter costs by $29.4 million. And it recommends that people who live in subsidized housing pay a rent surcharge if their income rises above the eligibility limit.

City workers’ pay remains the big fiscal question. Teachers and principals haven’t gotten a raise since 2008, and the rest of the city’s 152 unions haven’t had one since 2010. The projection of a $700 million surplus includes a footnote that it “does not account for any additional expense arising from future labor settlements.”

The mayor’s February preliminary budget, it adds, includes a $3.7 billion reserve for collective bargaining, enough to fund raises “of around 1.25 percent” starting in fiscal 2014. But as there are no such reserves from the last five years, is says, “it is highly likely that City’s collective bargaining reserves will be inadequate to cover settlements going forward, never mind retroactive adjustments.”

May 8, 2014

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