NYC Council grills Adams admin budget director on proposed cuts

New York City Council members are fired up about budget cuts from Mayor Eric Adams’ administration, and a City Council hearing on Monday gave them a chance to make their opposition crystal clear. Council members packed into chambers to blast sweeping cuts to an array of city services, from parks, to senior centers, to composting, libraries and preschool.

“The city is facing tough economic headwinds in the coming years that we must confront, but our approach must be surgical and strategic, prioritizing the investments that we need to safeguard for New Yorkers,” City Council Speaker Adrienne Adams said. “Cutting every agency’s budget indiscriminately will disproportionately impact everyday New Yorkers.”

Last month, the Adams administration released an updated financial plan that included across-the-board 5% cuts to city agencies – sometimes referred to as Programs to Eliminate the Gap – cuts that the city has warned will have to be repeated for most agencies next year if the federal government continues to come up short on funding to help manage the influx of asylum-seekers to the city. The administration argues that if it weren’t for the influx of tens of thousands of asylum-seekers, the city’s budget gaps would be more manageable.

The City Council rejects the administration’s assertion that this level of cuts is necessary. They’ve also argued that the budget gaps cannot be solely attributed to the migrant crisis. Members doubled down on this assertion Monday, arguing that expiring federal COVID-19 relief funding and dropping city revenues in outyears are also at fault for the city’s fiscal woes. 

And while council leaders agree that the city’s budget deficits are real, an updated tax revenue forecast that the council released on Sunday paints a slightly rosier picture than the city has, anticipating $1.2 billion more in revenue this fiscal year than the city has projected. (The city is traditionally more conservative than the council with these revenue estimates.)

Council leaders have pushed this general argument in the weeks since the mayor released his updated financial plan. Earlier on Monday, the City Council Progressive Caucus rallied alongside union leaders, advocates and other lawmakers in opposition to the cuts. But Monday’s hearing not only gave members an opportunity to put that opposition on the record, but also to question Office of Management and Budget Director Jacques Jiha on everything from the nitty-gritty details of cuts that will delay expansions of curbside composting and a mental health response program, to the city’s spending on contracts to provide services to asylum-seekers. The across-the-board nature of the cuts has been the focus of much of the council’s ire. Members pointed out the disproportionate impacts on city agencies, arguing that a 5% cut to an agency like the Department of Parks and Recreation, which accounts for less than 1% of the city’s budget, will be disproportionately damaging.“It may seem like OMB is being merciful by assigning the same amount of pain to every agency, but equal cuts don’t equal equitable cuts,” Council MemberJustin Brannan, who chairs the Committee on Finance, said. 

The Adams administration has faced harsh criticism over not only these latest cuts, but their handling of the asylum-seeker crisis. On Monday, Jiha echoed a theme often espoused by the mayor – in his case, about the asylum crisis – that they’re open to hearing better alternatives from their critics. “We don’t have a monopoly on wisdom,” Jiha said, advising council members to share suggestions on how the city should handle budget issues.

The council has presented some alternative ideas that they argue could work toward closing looming budget gaps and prevent the need for the broad cuts that the administration is pursuing. Those options include dipping into the city’s budget reserves, collecting unpaid fines and fees, and evaluating whether existing tax breaks should remain in place. 

Jiha said that the city plans to use some annual budget reserves to help close a projected $7.1 billion budget gap for fiscal year 2025 with the release of that preliminary budget in January. A separate bucket of reserves called the rainy day fund was intended to be used in a recession, Jiha said, explaining that they won’t dip into that. But that still leaves a large deficit to fill, he said. “We need other things to do,” Jiha said. “PEGs on the agency, PEGs on the asylum-seekers – we need other tools to deal with a problem of this size.”

The city’s Independent Budget Office also released its fiscal outlook report on Monday, estimating a much smaller budget gap for fiscal year 2025, at $1.8 billion. The IBO anticipates a budget surplus this year that would help prepay expenses next year.

The nonprofit watchdog Citizens Budget Commission urged the City Council and the Adams administration to prioritize services with the most impact while also increasing their efficiency. Dipping into the city’s reserves would be unwise as it would only serve to “kick the can” on tough budget calls, according to Ana Champeny, vice president for research at the organization.

“The city cannot provide everything to everyone, but it can thrive and help our most in-need neighbors if it prioritizes key services, relentlessly manages them to get results, and operates effectively and efficiently,” Champeny said in a prepared testimony. “It is not the time to raise taxes, which would weaken New York City’s competitiveness, or dip into reserves, which would weaken the city’s ability to withstand any future recession.”

In addition to cuts at city agencies, Adams has ordered a 20% cut to city spending on shelter and services for migrants. City officials have provided few specifics about how they intend to achieve those savings beyond saying they intend to reduce the number of asylum-seekers in the city’s care and by cutting staff and services. Pressed by council members over why the city has invested so disproportionately in costly contracts with for-profit organizations like DocGo instead of with nonprofits, Jiha said the administration is looking into moving migrants to smaller HERRCs and hotels as it shifts toward a more nonprofit model. That would be good news for a bulk of the council who have long been urging the city to pursue such partnerships. “I would love to see DocGo go away,” City Council Member Gale Brewer said, referring to the for-profit medical services company that’s been accused of not providing adequate services to migrants and is now under investigation by the state attorney general’s office.

Recent polls suggest that budget cuts are not only unpopular with most council members, but also with the public. A Quinnipiac Poll released last week found that 83% of voters surveyed were either very concerned or somewhat concerned that the cuts will affect their daily lives. The mayor has been scrutinized from all sides lately, and has pinned the need for repeated cuts on the lack of sufficient federal government response to the migrant crisis. “A lot of the things we’re doing, we don’t like them either,” Jiha said Monday.