After The Dance

Today begin the New York City Council’s preliminary budget hearings, in years past the traditional start of a rite of passage for new members and an annual ritual for the rest: the “budget dance.” Each March councilmembers would dig in their heels to fight for the restoration of vital services like libraries, firehouses and after school programs cut in the mayor’s preliminary budget, thus setting off a months-long tango between the city’s chief executive and its legislature.

But this year, under new Mayor Bill de Blasio, the Council will not be contending with headline-making cuts—at least not yet. In his first preliminary budget, released on February 12, the mayor baselined most of the annual cuts (known as PEGs) to key services, in essence pushing the pause button on the budget dance. As a result, this year’s preliminary budget process should be more low key than usual.

“I don’t expect it to be as contentious as it has been in the past…since the mayor seems more in line with the thinking of the Council than the previous mayor was,” said Councilman Mark Weprin.

The hearings are expected to focus on broader issues, including overall priorities and the effectiveness and efficiency of agency programs, contracts, staffing and operations, according to an emailed statement from Councilwoman Julissa Ferreras, who chairs the Finance Committee.

The preliminary process, which will last until the end of March, will not be without its challenges. As councilmembers begin to deal with the budget, they will not be playing with a full deck. The budget does not include what could end up being one of the largest expenses—money for municipal labor contracts.

“The number of outstanding labor contracts is the biggest issue in this and future budgets. Everything else is secondary,” said Councilman Dan Garodnick.

Mayor de Blasio and his team are still negotiating all 150 expired union contracts. The mayor has set no deadline to settle them, however City Comptroller Scott Stringer strongly suggested a June deadline so that the money to pay for them would be included in this year’s budget.

The mayor has been tightlipped about how much money the contracts could end up costing, maintaining that he does not want to negotiate through the media. A recent report from the Independent Budget Office puts the figure at $500 million to $7.1 billion depending on the amount of retroactive pay granted the city’s various unions.

“I think it will be a large sum of money no matter what,” Weprin said. “It is a major amount of money that will throw the budget out of whack eventually.”

With such an important missing variable from the preliminary budget, the Council will have limited options.

“We will put an asterisk on everything we are looking at today in the absence of resolution,” Garodnick said.

In years past when there was a surplus the Council would propose initiatives that would typically fund citywide or multi-district programs. Though this year the balance sheet technically shows a surplus, that extra money will more than likely have to go to fund any retroactive pay or raises higher than the 1.25 percent currently factored into the budget. 

“I don’t think anyone is going to the budget negotiations and saying, ‘We have a lot of extra money to work with.’ We do not,” Weprin said, “No matter what happens with pre-k, no matter what happens with revenues, we are under the impression we are in a deficit mode because we know we have to pay the piper eventually and make sure the working men and women who make this city great get paid a fair amount of money.”

The uncertainty in the preliminary budget does not mean Council members will be passive during this round of negotiations, however. Without the distraction of the budget dance, the Council will finally have the time to peruse all the parts of the budget.

“The budget dance, as it is known, has focused too much of the Council’s time and attention on too small a piece of this pie,” Garodnick said. “[This year] we have a chance to take a deeper dive into the broader issues like the structural deficit that has existed for many years and the anticipated deficit that is coming as soon as fiscal year 2016.”

Councilwoman Helen Rosenthal, who is on the Finance Committee and once worked as an assistant director of the city’s Office of Management and Budget, said she plans to examine agency funding.

“What I will have an eye for is cases where we are not funding things adequately,” Rosenthal said. “There are also areas where we are spending way too much money. I want to hold the administration’s feet to the fire to cut back on that.”

The Council is hoping the new administration will make it a little easier to find areas of cost savings. Bloomberg’s budget was notoriously opaque in places, with some obscure units of appropriation coming out to several billion dollars.

In the summer of 2013, Councilman Garodnick sent letters to all the mayoral candidates asking them to pledge to bring more transparency to the budget process if elected. Though Garodnick notes that Candidate de Blasio did not respond to his letter, he said he would wait until the new mayor releases his executive budget before he decides if it is necessary to sound any alarms.