New York City Comptroller Brad Lander released his office’s Fiscal Year 2024 Executive Budget Analysis and will testify to the City Council on New York City’s economy and City finances today.
“While fiscal challenges and economic uncertainty remain on the horizon, New York City stands on solid economic footing. We do need a serious, long-term savings plan to address outyear gaps, but cutting supportive housing, CUNY, and meals for home-bound seniors is shortsighted. New York City must remain a place that people want to grow families, build businesses, and create new ideas – and the City can ensure that by investing in the essential services and infrastructure that make the five boroughs an affordable, safe, and thriving place to live,” said Comptroller Brad Lander.
New York City’s Economy and City Finances
The Mayor’s FY 2024 Executive Budget totals $106.69 billion, an increase of $4.03 billion over the Preliminary Budget, but $2.22 billion less than the $108.91 billion currently planned for FY 2023; with much of the difference stemming from the drop-off of Federal COVID-19 aid. The City’s tax revenues for FY 2023 through April are 5.8% above those for FY 2022, and the Comptroller’s Office projects a $1.7 billion surplus in FY 2023 to close the FY 2024 gap. The Comptroller’s office projects that tax revenues will dip slightly in FY 2024 before regaining growth in each successive year of the plan.
While revenues are above expectations and the budget is balanced this year, large gaps remain in the outyears. The Comptroller’s Office projects that, before accounting for the risk that the cost of services to asylum seekers will grow even beyond the Administration’s projections, outyear gaps will be $2.1 billion in FY 2024, $6.4 billion in FY 2025, $9.0 billion in FY 2026, and grow to $10.4 billion by 2027 accounting for risks, underbudgeting, and the drop-off of federal stimulus funds.
Asylum Seekers
The ongoing cost of providing shelter to asylum seekers (including whether and when the federal government will step up to reimburse a meaningful share of these costs) is the largest unknown in the budget planning process. The City projects that the cost of providing shelter and services to households seeking asylum will reach $2.9 billion in FY 2024, with the City paying $1.7 billion of that cost. Based on a variety of scenarios of the flow of new arrivals and daily costs, the Comptroller’s Office estimates providing services could cost an additional $1.15 billion in City funds in FY 2024, growing to $2.94 billion in FY 2025, and $3.65 billion in FYs 2026 and 2027, particularly if additional State and Federal funding does not materialize. If this were the case, the overall budget gaps could grow to $3.29 billion in 2024 ($1.6 billion after the rollover of FY 2023 surplus) and just over $14 billion (12.9% of budget) in FY 2027.
Over 99% of the City’s spending on asylum seekers has been for emergency shelter, and less than 1% on legal and support services. Comptroller Lander and Council Member Shahana Hanif sent a letter earlier this month asking the administration to add at least $70 million in funding for legal services to assist new arrivals to meet the one-year deadline to apply for asylum and get work authorization applications filed that will allow them to work legally and move out of shelter into permanent housing.
Savings and Cuts
Despite the uncertainties and risks in the budget, the Comptroller contends that the Administration is making a strategic misstep by cutting critical services, including supportive housing rental assistance, CUNY, public libraries, meals for homebound seniors, and therapeutic and post-incarceration programs for detained individuals. Comptroller Lander calls for a more strategic and long-view approach to achieving savings through attrition and efficiencies, and proposes agencies be accountable for reducing claims by making settlement payouts from the responsible agency’s budget rather than the City’s general fund.
New Revenues
With looming outyear budget gaps and the need to maintain essential services, the Comptroller argues that a savings program alone, while necessary, will not enable the City of New York to make the ambitious investments required for New York City to remain a place where people both want and can afford to grow families, buy homes, launch new businesses, and create the ideas and culture that drive our economic success. New revenues will be required, and therefore Comptroller Lander released Raising Revenues, an analysis of proposed tax changes for high income earners and high value properties that could provide progressive sources of additional revenue to fund new investments in the infrastructure and services for New York City’s future.
The Comptroller’s testimony as prepared for delivery is available here.
The Comptroller’s Office’s FY 2024 Executive Budget Report is available here.
The Comptroller’s revenue proposals and analysis are available here.
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