Flush with $15 billion of additional state and federal aid, improving COVID-19 statistics and the further lessening of restrictions, New York Mayor Bill de Blasio released his record $98.6 billion
“The theme of our budget is recovery,” de Blasio said Monday afternoon from the City Hall Blue Room. “This is a good-news budget if there ever was one.”
The amount is up nearly 7% from the mayor’s $92.3 billion preliminary budget in January. The 51-member City Council must vote on it by July 1.
De Blasio's 10-year, $133 billion capital budget emphasizes affordable housing, water and sewer improvements, road repair and climate change. The mayor said passage of a federal infrastructure bill could support some of these initiatives.
Capital spending includes more than $720 million to complete a Manhattan Greenway by 2029.
The mayor referenced "recovery" when asked if the city was overspending. "Right now we have to bring back the city this year," he said. "It is not optional."
De Blasio’s plan wields a so-called equity theme, including $600 million for 100% “fair student funding,” an overhaul of mental health troubleshooting, free 3-K for all and expansion of early childhood special education.
The mayor’s tone contrasted with doom-and-gloom briefings prevalent since the COVID-19 pandemic mushroomed in March 2020. On Monday, he said the city has administered 6.2 million vaccine does and the rolling seven-day positivity test average has dropped to 3.56%
De Blasio, in his eighth and final year as mayor, is term-limited and will leave office Jan. 1. He said the spending levels would not impede the incoming mayor. "We're not handcuffing them because we'll be handing them a strong economy."
New York received roughly $6 billion of direct aid through the American Rescue Plan and a further $7 billion of education funding from Washington. New York must use both by 2024.
Fresh funding from New York State includes up to $1.1 billion from Campaign for Fiscal Equity Funding.
In addition, his budget staff projects a $1.5 billion increase in revenue in fiscal 2021 and 2022 over the January forecast.
The mayor also cited nearly $4 billion of savings over the two fiscal years, including $603 million in the executive budget.
The budget adds $1.8 billion to budget reserves, $1.6 billion to the Retiree Health Benefits Trust in fiscal 2021 and $200 million to the general reserve. This, he said, brings total reserves in fiscal 2022 to $4.6 billion, including $3.8 billion in the Retiree Health Benefits Trust, $493 million in the new rainy-day fund, and $300 million in the general reserve.
Andrew Rein, president of the watchdog Citizens Budget Commission, called for the mayor to boost reserves.
"The savings program is anemic, relying mostly on non-recurring savings that do nothing to increase efficiency," he said. "Instead, the city should be implementing a regular, reasonably sized program to eliminate the gap. The discipline of regular operational review can help prioritize programs, improve quality and identify savings."
The plan includes $25 million to boost tourism under a plan with NYC & Co., the city’s marketing wing.
Outyear gaps for fiscal 2023 through 2025 exceed $4 billion. The city by law must close them.
Bond rating agencies hit New York with multiple downgrades and warnings as the pandemic escalated. Several major issuers of late have received upward outlook revisions after the newest infusion of federal aid.
Moody’s Investors Service rates the city's general obligation bonds Aa2. Fitch Ratings and S&P Global Ratings rate city GOs AA-minus and AA, respectively. All three assign negative outlooks.
According to data on the Municipal Securities Rulemaking Board's EMMA website, a block of fiscal 2021 Series E general obligation bonds maturing in 2039 that originally priced at 113.514 cents on the dollar and a 2.44% yield, sold to a customer Monday at a price of 121.527 cents and a 1.777% yield.
According to Ana Champeny, the CBC's director of city studies, smart use of federal aid, efficient government services, right-sizing the workforce and building reserves are essential.
She recommended not funding new recurring programs with non-recurring revenues, and publicly providing data on the use and impact of federal funds.
Champeny also called on the city to make deposits into the rainy fund, the establishment of which voters approved in November 2019, and replenishing the Retiree Health Benefits Trust, which the city has tapped periodically to replenish its budget.
