Although jobs are steadily returning, unemployment remains high for communities of color, SNAP and cash assistance recipients are increasing, and small business revenues remain a fraction of pre-pandemic level
$15.7 billion federal stimulus must be used to bolster the economic recovery and reopening, get the city’s fiscal house in order, and build the economy of the future
Stringer: “We must take a responsible, long-term approach to using the billions of dollars in federal stimulus funding for a robust and rapid re-opening of the economy, to get businesses open again and our people back to work, and to get our own house in order with a long-term plan for how we will provide the services New Yorkers need and want – even after the stimulus funds are gone.”
Today, New York City Comptroller Scott M. Stringer released an analysis of the City’s Fiscal Year 2022 Executive Budget and outlined the state of the City’s finances as COVID-19 vaccination rates continue to climb and a full reopening is underway. The new analysis of the Executive Budget spotlights the City’s planned spending of the federal COVID-related aid from President Biden’s American Rescue Plan Act. Comptroller Stringer called for the City to use the funds to enable a strong recovery and build a solid foundation for the future — notably ensuring a robust reopening of the economy and getting businesses and workers back, guaranteeing that the City’s financial condition is strong once stimulus funds are exhausted, and making the necessary investments needed to build the economy of the future.
“As we head into summer, the rise in vaccinations and the reopening of our city means we’re full speed ahead in our economic recovery. But the road ahead is challenging including struggling businesses, persistently high unemployment and too many New Yorkers struggling to make ends meet,” said Comptroller Stringer. “This year’s budget can lay the foundation for our immediate and longer-term recovery — if we get it right. We must take a responsible, long-term approach to using the billions of dollars in federal stimulus funding for a robust and rapid re-opening of the economy, to get businesses open again and our people back to work, to get our own house in order with a long-term plan for how we will provide the services New Yorkers need and want — even after the stimulus funds are gone — and to make the investments we need now to build the economy we want for the future.”
The City’s Economic Outlook
The U.S. economy is slowly recovering as a return to full employment has been lagging due to low wages, lack of childcare, supply bottlenecks, and a changing labor market.
Despite positive momentum toward a full reopening — including a steady return of jobs, the return of 24/7 subway service and the scheduled reopening of Broadway — the Comptroller’s analysis of the city’s economy reveals the extent of the remaining challenges, with unemployment rates stubbornly high particularly among New Yorkers of color, the number of SNAP and cash assistance recipients on the rise again, and small business revenue depressed.
FY 2022 Executive Budget and April 2021 Financial Plan
Thanks to the infusion of federal stimulus funds, the modified Executive Budget for FY 2021 is $100.7 billion dollars — $5.6 billion more than in January — and the Executive Budget for FY22 is $98.6 billion — up $6.2 billion dollars.
Budget gaps of around $4 billion a year are projected to persist through FY 2025.
Federal Stimulus Aid
The spending increases this year and over the remainder of the financial plan period are fueled by an additional $15.7 billion dollars in federal COVID-related aid in the budget.
New York City stands to receive $5.9 billion in flexible funding from the American Rescue Plan Act (ARPA) stimulus aid, and nearly $7 billion for education from the ARPA and last December’s stimulus bill.
Comptroller Stringer’s analysis identified how the Mayor’s Executive Budget proposes to use the additional federal stimulus funding, and offers a vision of how the funds should be used to bring about a sustainable recovery.
Responding to and Recovering from the Pandemic
The Comptroller’s analysis found that more than half of the federal stimulus funding will go to initiatives aimed at responding to the pandemic and reopening the economy.
This funding includes investments in expanding disease control and lab capacity, reopening schools, vaccinations and immunization efforts, and testing and tracing.
Other proposed initiatives include expanded rental assistance for the homeless or those at risk of homelessness; a citywide cleanup initiative; small business loans, grants, and other support; emergency food assistance and youth programs.
The largest funding allocation — $3.6 billion — will go to DOE programs including academic recovery and student support services, special education services, and IT services.
The budget does not provide details, however, on how a substantial portion of these funds would be used beyond very broad categories.
Expanding Existing Programs and Creating New Resources
A significant portion of stimulus funding is focused on investing in new programs and expanding existing ones.
Many of these initiatives are positive developments, including expanding universal 3-K, expanding and improving services for seniors, providing adequate overhead reimbursement for non-profit social service contractors, and providing access to counsel in housing court.
The Mayor’s plan for these programs, however, does not include sources of City funds to continue them when stimulus funds are used up in FY 2025.
Economic Recovery and Reopening
Comptroller Stringer emphasized that a robust and rapid reopening of the economy to get businesses open again and New Yorkers back to work is needed — especially small and minority-owned businesses that have the fewest resources and those that have struggled to get access to assistance during the pandemic.
Getting Our Fiscal House in Order
The financial plan lacks a path to longer-term financial sustainability, with little progress toward lowering outyear budget gaps.
A long-term plan for how the City will provide the services New Yorkers need and want must including looking closely at agency budgets for savings to see how they could provide services more efficiently.
The City must do more to bring reserves back to at least 12 percent of City spending as the current budget cushion has fallen to under 8 percent.
Building the Economy of the Future
Comptroller Stringer noted that New York City needs to train its workers for the jobs of the future including technology and health care — investments that must be made through stimulus funding now.
Comptroller Stringer called on the City to harness one-time stimulus funding to make capital investments, including expanding broadband access, repairing water and sewer systems, meeting the challenges of climate change, and transforming streetscapes.
To read Comptroller Stringer’s full analysis, click here.
To read Comptroller Stringer’s report on the FY2022 Executive Budget, click here.
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