De Blasio Unveils Budget With Downturn in Mind

New York City Mayor Bill de Blasio unveiled a $77.7 billion executive budget proposal Monday that he said will protect against economic downturn, while investing in public safety and programs that aid the needy.

De Blasio stressed that his plan sought to prepare for tighter times by paying off a $1.8 billion hole, reducing out-year budget deficits and annually adding $750 million to the general reserve for the next four years.

However, some fiscal experts said the progressive administration should be more prudent, particularly by not calculating its budget using projected tax revenue increases and freeing up revenue to bolster the city during recessions or unforeseen crises.

The mayor emphasized that economic growth may not continue in coming years because the expansion of the national economy has continued for longer than the average length of expansion seen since World War II. Although de Blasio's budget calls for increasing expenditures, it still amounts to less than last year’s $78.5 billion fiscal plan, which included federal funding for Hurricane Sandy recovery work and homeland security grants.

“Economic expansions do not go on forever, and we have to prepare for when things turn,” de Blasio said. “We’re going to make some very targeted and specific investments.”

De Blasio summarized many of these investments as initiatives meant to promote public safety and curb the widening income gap. He said the city was taking advantage of some $3.4 billion in healthcare savings culled from negotiating expired contracts with 71 percent of its workforce. 

City & State columnist Nicole Gelinas, a fellow with the conservative-leaning think tank the Manhattan Institute, said de Blasio was right to hone in on economic risk. But, she said he could have better prepared for tough times by not counting on a roughly $2.7 billion increase in tax revenue over the next four years, on top of low interest rates and a steady stock market.

“If he’s really expecting a downturn, keep tax revenue forecasts the same. Then he gives himself more room, if things don’t turn out well,” Gelinas said. 

She also called the negotiated contracts touted by de Blasio the “original sin” of his administration for committing the city to billion dollar payments for years to come.

“We’re still stuck with those things even if we have a downturn,” Gelinas said.  

The Citizens Budget Commission, a nonpartisan group that evaluates city and state budgets, also urged de Blasio to amass savings and focus more on finding efficiencies.

“You want to decrease your expenditures,” said the commission’s director of city studies, Maria Doulis. “That is preferable to being in a situtation where the economy tanks and your revenue is falling and you have to find ways to pay for things.”

But, James Parrott, deputy director and chief economist at the left-leaning Fiscal Policy Institute, described the proposal as financially viable. 

“The city continues to do well in terms of tax collections and interest rates have stayed low, so there’s debt service savings,” he said. “All of that combines to create a pretty sound financial plan with some resources to fund various initiatives.”

Many of these investments targeted public safety. De Blasio said he planned to spend $18 million on ambulance tours and EMS dispatchers to trim emergency response times, $11.5 million for replacing the NYPD’s bulletproof vests, $10 million for expanding the Police Cadet Program and $3.2 million for hiring paralegals and attorneys to handle frivolous lawsuits against police. 

Another $35.5 million was earmarked for reducing correction offficers’ use of force and improving the department’s application and recruitment processes, de Blasio said. 

Some of the other initiatives singled out by the mayor included a $28.4 million rental assistance program to help families move out of homeless shelters, $8.6 million for initiatives meant to keep New Yorkers in their homes and money for drop-in centers that serve those living on the streets.

His administration also announced $11 million would go towards training at the Administration for Children’s Services, which has been criticized over children’s deaths. 

And the municipal ID program that has been struggling to keep up with surging demand will receive $5 million for hiring 188 people.