Mayor Bill de Blasio: Thank you very much. I want to thank our Acting Chair, State Budget Director Robert Mujica, for the introduction and for the sixth year in a row I want to thank the members of this board for the work you do on behalf of our City and our State. I want to acknowledge two partners whose work is indispensable in everything we do, Comptroller of the State Tom DiNapoli, Comptroller of the City Scott Stringer, I want thank them and their staffs as well. Of course, thanks to the private members. It’s been an honor working with you, John Levin and Lawrence Golub, thank you so much. And the FCB’s Acting Executive Director Jeff Sommer, thank you for all you’ve done for many years, for all of us. The – we worked closely with the City Council and thank them for their partnership in reaching our budget agreement in June and I want to thank the members of my team who are here for the work they did in the budget process, and do every day, First Deputy Mayor Dean Fuleihan, Budget Director Melanie Hartzog, and their staffs as well.
So here’s the overview, the Fiscal Year 2020 Adopted Budget is $92.77 billion. It is balanced with record levels of reserves and manageable out-year gaps. And before I go into detail on the adopted budget, I want to talk to you about why we have put it together the way we have. I want to take us back to the beginning of this year when there was some good news, job growth was strong and the City’s unemployment rate was low, but we also saw a bigger picture and some real challenges. At that point we were in the 116th month of the longest recovery since World War II which is something to celebrate but also a reason to be hesitant about what would come next. Markets had just posted steep losses in December, the housing sector had become weaker, and we faced threats related to foreign trade conflicts. Obviously those threats have only intensified since. Many leading economists at that time forecasted that the national economy would slow. At the same time we saw tax revenue slowing in comparison to the preceding year and we faced budget hits and risks both from Albany and Washington. We responded by deepening our commitment to fiscal prudence. I set a mandatory savings goal of $750 million for the Executive Budget which included an expansion of the partial hiring freeze and this administration’s first program to eliminate the gap. We maintain that commitment over the next months as we move closer to adoption, even as financial markets recovered.
We are focused on two areas, growing our savings and increasing our already significant reserves. First our focus on savings, we have maintained aggressive savings plans during strong revenue periods and as growth has slowed. The wisdom of this approach is clear as these savings plans have allowed us to balance the budget and finance necessary initiatives. Every year OMB and city agencies work together to examine internal processes and use existing resources more efficiently, including an evaluation of personnel needs. OMB also develops initiatives to make use of shared resources and economies of scale across all of our city agencies. Now because of these efforts we achieved almost $2.9 billion in savings over Fiscal Years ‘19 and ‘20 since the last adoption. These savings were attained in part through the PEG and a permanent reduction of nearly 3,000, city-funded, personnel positions in this fiscal year, but we certainly are not done. Over the course of the year we will continue to find ways to save tax payer dollars – excuse me – while maintaining the critical services that New Yorkers need and expect.
Second, we have increased the level of budget reserves every single year of this administration so that we’re ready in the event of a downturn. We have a buffer from the unexpected. This year is no exception. We increased reserves to nearly $6 billion and that is a record level for the City of New York. This includes $1.15 billion in the General Reserve, $4.57 billion in the Retiree Health Benefits Trust Fund, and $250 million in the Capital Stabilization Reserve. Because of our yearlong savings efforts and cautious planning at the end of Fiscal Year ‘19, we were able to make a $4.22 billion re – prepayment – excuse me – prepayment on Fiscal Year 2020 expenses, leaving Fiscal Years 2019 and 2020 balanced.
I’m proud to say these efforts haven’t gone unnoticed. Our consistent focus on savings and reserves has been routinely praised by fiscal monitors and rating agencies. In March, Moody’s Investors Services upgraded the City’s GO Bond Rating to AA1, the highest level ever achieved by the City, and our first ratings increase in nearly a decade. In making the upgrade, Moody cited our strong financial management and improvements in our financial position that reflect a greater capacity to withstand an economic downturn. So that’s the level of prudent fiscal management we’ve always believed was the foundation to a progressive government. That’s what allows us to invest in the city in the responsible way we have.
And before I conclude I just want to highlight some of these investments. Much of the new agency spending in Fiscal Year 2020 went towards supporting basic City operations and mandates. This included funding upcoming elections, maintaining water and sewer services, and addressing NYPD’s critical IT infrastructure needs. Our investments are guided by a simple question I spoke about at this meeting last year. How does this help us keep building the fairest big city in America? You’ll find that this year’s plan goes a long way to further that mission. We are investing in health care as too many New Yorkers lack access to affordable, quality coverage.
At the State of the City, we announced NYC Care, part of our plan to guarantee health care access for 600,000 uninsured New Yorkers. We enhanced efforts to boost MetroPlus, New York city’s public option. At full ramp up, this investment will total $100 million per year. We are investing in mental health care as well, especially for younger New Yorkers. This year we will place 200 additional social workers in our public schools including mental health specialists working within the Thrive initiative. We will continue to invest in affordable housing which is so critical for vulnerable New Yorkers, and we are protecting this city and all New Yorkers from the impact of climate change. As part of NYC’s Green New Deal, we invested $60 million to retrofit City buildings with green technology, reflecting our ongoing focus on energy efficiency.
We are making sure as well that every New Yorker is counted in the 2020 Census. In partnership with the City Council, we invested $40 million to fund outreach staff and a public awareness campaign to make sure that New York is counted and we get our fair share in federal funding and federal representation.
And of course, nothing is more central to a fair New York City than bringing equity to our schools. That’s where we are continuing to invest in education which my administration has been focused on since day one. This year we expanded 3-K For All by funding 1,900 new seats in the Bronx and Brooklyn. This investment brings 3-K to 12 districts and 20,000 children this September. The quality of our pre-K and 3-K initiatives depends on recruiting and retaining quality, early childhood educators and last week I am proud to say DC1707 and the Daycare Council of New York City ratified an agreement that honors that commitment we made at adoption to develop a pathway to pay parity for our early childhood educators. We will add related funding in the fall and this agreement will serve as a model for the remaining certified providers going forward.
Similarly in recognition of the critical role legal defense attorneys play in the justice system, the City will continue conversations with providers to effectively address recruitment and retention issues in that sector as well.
Finally I’ll note that in April we released the $116.9 billion, ten-year capital strategy that details the City’s infrastructure plan. Our investments support expanding and enhancing school facilities, making repairs and safety improvements to roads and bridges, and building and preserving record levels of affordable housing. 75 percent of all capital funds are invested in maintaining or improving the City’s capital asset base, reflecting a continued focus on state of good repair. And as we have in the past, we have debt service payments below 15 percent of our City tax revenue, the bench mark for responsible capital financing.
To conclude, as always, I want to thank the Financial Control Board for your work. This partnership makes New York City stronger and this year’s budget continues to make the case that our administration has made for years now – that prudent financial management and big progressive change are not mutually exclusive. That we can be guided by fiscal responsibility and make the investments we need to build a growing, thriving city in every single borough. We have more work to do but these investments in our people and our city will continue to push us towards a future where fairness is a defining part of life in New York City. Thank you very much, Mr. Chair.
