April 26, 2023
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Despite Fiscal Challenges, Budget Protects Critical Programs for Working New Yorkers While Realizing Significant Agency Savings
No Cuts to Budgets for Libraries and Cultural Institutions
New York City Still Faces $4.3 Billion in Costs Related to Asylum Seeker Crisis Through FY24
NEW YORK – New York City Mayor Eric Adams today released New York City’s $106.7 billion Fiscal Year 2024 (FY24) Executive Budget. Mayor Adams unveiled the largest Executive Budget in city history to protect critical programs that support working New Yorkers, while simultaneously preparing for economic headwinds by continuing his strong track record of fiscal responsibility. The budget also includes strategic investments that improve New Yorkers’ quality of life, including investments that create sustainability and resiliency programs, strengthen the city’s mental health resources, build out the college-to-career pipeline, and uplift working people.
FY23 and FY24 remain balanced, with outyear gaps of $4.2 billion, $6.0 billion, and $7.0 billion in fiscal years 2025 through 2027, respectively. Growth of $4.0 billion in FY24 over the Preliminary Budget is driven by asylum seeker costs and funding labor settlements with the city’s workforce.
“Our Fiscal Year 2024 Executive Budget prioritizes our working people’s agenda and keeps our city working for the benefit of all New Yorkers. But the challenges we face are real — including the costs of the asylum seeker crisis, the need to fund labor deals, and slowing tax revenue growth — and we must budget wisely,” said Mayor Adams. “The PEG was a success, achieving $1.6 billion in savings across the two fiscal years, and over $3 billion in the outyears without a single layoff or service reductions. Further, we did not cut a single penny from libraries or cultural institutions, and adjusted savings targets for agencies to avoid cutting critical needs. This budget also makes upstream investments to uplift working New Yorkers, makes our city more sustainable, strengthens mental health services, and builds out the college-to-career pipeline. We had to make tough choices in this budget and balance competing needs, but our administration always puts the well-being of New Yorkers first, second, and third.”
In the last year, more than 57,000 asylum seekers have arrived in New York City, and more than 35,000 still remain in the city’s care. The city anticipates that the cost of providing shelter, food, clothing, and other services for asylum seekers will be $4.3 billion through the end of FY24.
In the last few months, Mayor Adams also announced labor agreements with District Council 37 and the Police Benevolent Association, which set the economic framework for labor deals with the city’s workforce. The total additional cost of reaching agreements with the city’s remaining unionized workforce is expected to be approximately $16 billion over the duration of the financial plan.
In response to the dramatic growth in the cost of caring for asylum seekers and the need to add funds to support labor deals, Mayor Adams implemented a Program to Eliminate the Gap (PEG) in the Executive Budget to reduce costs and promote efficiency. The PEG achieved $1.6 billion in savings across FY23 and FY24 without laying off a single employee or cutting any services. This PEG was applied strategically, and the Adams administration did not remove a single cent from the budgets of New York City’s public libraries or the New York City Department of Cultural Affairs, which funds museums and other cultural institutions, out of concern that reductions in budgets at this time would negatively impact their ability to provide core services. Targets were also reduced for numerous other agencies — including the Fire Department of the City of New York, the New York City Department of Sanitation (DSNY), the New York City Department of Parks & Recreation, the New York City Department of Youth & Community Development, the New York City Human Resources Administration, the New York City Department of Homeless Services, and more — that could not sustain full PEG cuts without jeopardizing public safety, health, or other critical services for New Yorkers. The administration continues to work with agencies to identify ways to operate more efficiently while delivering effective services to all New Yorkers.
Tax revenues increased by $2.1 billion in FY23 and $2.3 billion in FY24, driven by better-than-anticipated growth in personal income tax, business tax, and sales taxes, and helped maintain balance. Financial experts widely predict an economic slowdown later this year, which will in turn slow city tax revenue growth in the outyears.
The FY24 investments include:
Uplifting Working People
Improving Sustainability and Resiliency
Strengthening the City’s Mental Health Resources
Building Out the College-to-Career Pipeline