State Comptroller Reports on NYC Workforce Pressures, Financial Plan Fiscal Cliffs and Major Agency Challenges
Calls for Budgetary Caution and Prioritizing Core Services
In conjunction with his remarks, DiNapoli released a new report on the impact of the pandemic on the city’s workforce, an online tool identifying key programs that face funding risks, and a series of reports examining the most significant issues facing the city’s largest agencies.
“There are some bright spots in New York City’s economic recovery, but its overall course remains uneven and has created tremendous uncertainty,” DiNapoli said. “At its foundation, the city’s recovery will depend on its ability to deliver basic services like education and public safety, while managing spikes in demand for additional services, like mental health and homelessness, without interruption. I encourage all city and state leaders to be flexible in their budgeting and prioritize the core operations of New York City. For our state to succeed, we need New York City to succeed.”
DiNapoli’s report shows the COVID pandemic brought an end to years of hiring in the city’s workforce, which rose 12.3% over eight years through Fiscal Year (FY) 2020 to reach 300,446 employees. The city’s pre-pandemic hiring was largely driven by new teachers and support staff for expanded Pre-K and police and correction officers.
Since FY 2020, however, the city has lost 16,637 employees, an overall decline of 5.5%, which brings its total to the lowest level in five years (283,809). In some city agencies, the declines, which are concentrated in public safety, education and health and welfare positions, are well above the citywide 5.5% average.
This staffing decline gives the city an opportunity to reexamine its workforce and restructure programs and services to achieve efficiencies without the need for layoffs or service cuts, and achieve the 3% cost savings directed by the Mayor. However, it could adversely impact the quality and consistency of some public services and programs. The Department of Correction and the Department of Investigation were among the 10 agencies that saw the largest decline in headcount and have noted staffing declines impacted their ability to provide certain services in FY 2021.
In FY 2021, attrition was lower than pre-pandemic averages at most agencies, but hiring was frozen for non-essential and non-revenue generating positions, which resulted in the net decline at a time when budgets were under stress.
However, attrition accelerated in the first five months of FY 2022 (July-November 2021) and exceeded pre-pandemic levels. Hiring also increased, but not fast enough to offset the losses in the city’s workforce. And since November, successive COVID variants, most notably Omicron, have further lowered agencies’ available staff. Some of the loss may be temporary, as with 3,739 teachers and paraprofessionals (e.g. teaching assistants) who were placed on leave without pay when they did not meet the deadline to show proof of vaccination.
Demand for services, combined with the temporary loss of employee availability attributed to the pandemic, contributed to a significant increase in overtime costs. Through the first six months of the current fiscal year, overtime costs totaled $1 billion, up from $385 million in the same period last year. Police, fire, corrections and sanitation workers accounted for more than 80% of those overtime costs.
The city is not likely to be able to close the workforce gap and reach its budgetary target of 309,859 employees by June 30, 2022. While the city may save more than $1 billion from lower than budgeted personnel costs, most of the savings would come from the Dept. of Education where headcount losses have accelerated in the current school year just as the city was trying to expand educational services.
It’s unclear how the city can meet its plan to add more than 13,300 teachers and support staff over the next seven months in the middle of a school year. Those unfilled vacancies may impact the need to staff new and existing school programs.
The report also notes the importance of recognizing that demand for certain municipal services may rebound to pre-pandemic levels if normal economic activity resumes. This could create challenges for short-staffed agencies. Several of these challenges are identified in DiNapoli’s city agency reports, which cover healthcare, education, public safety, social services and more.
Issues Facing City Agencies
For 14 of the city’s largest city agencies, including the Health and Hospitals Corp., Human Resources Administration, Department of Education, NYPD, and New York City Housing Authority, DiNapoli examined the most significant impacts the pandemic had on agency programs and operations, and identified major issues facing the agencies. Budgetary issues include increased demand for services, decline in revenues and staffing strains.
Fiscal Cliffs Online Tool
DiNapoli also raised concerns about the lack of transparency in the city’s financial plan related to the true recurring cost of some services, which could expand budgetary gaps if these costs are not offset. DiNapoli’s fiscal cliffs tool, which covers agencies that make up more than 90% of the city budget, shows the areas where the city plans to spend millions of dollars for programs that are not funded in future years.
These funding cliffs could impact educational programs, housing assistance, and mental health and healthcare initiatives, among other services. In addition, these cliffs create uncertainty for service providers who depend on city funding. DiNapoli recommended city stakeholders use the online tool to consider the budget policy choices they face, begin the process of effectively balancing recurring spending with available revenue, and work to minimize service disruptions and improve the city’s business climate and economic profile.
Report
Impact of the Pandemic on New York City’s Municipal Workforce
Agency Briefs
Fiscal Cliff Online Tool
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