De Blasio and City Council need to account for volatile financial markets

The general volatility of New York City’s financial markets is the proverbial Sword of Damocles that hangs over the head of any mayoral administration. Even with a clean bill of fiscal health, a burst bubble can turn any surplus into a deficit, as Michael Bloomberg learned in 2008.

So far, Mayor Bill de Blasio has deftly navigated a potentially precarious situation, settling the scores of expired labor contracts that his predecessor left in his lap, increasing tax revenue rolls and reducing unemployment. But as The Wall Street Journal reported on Wednesday, half of the City Council is urging the mayor to find even more savings, to the tune of 5 percent cuts for each city agency.

It’s a curious move coming from the Council, which strongly and successfully advocated for an additional 1,300 police officers during last year’s budget negotiations, even as crime rates remained at record lows. The police department is notorious for contributing to most of the city’s overtime costs, which continue to balloon year after year, as high as $1.66 billion in 2015.

The additional police officers are allegedly supposed to be offset by a cap on department overtime, but the coming release of the mayor’s executive budget will tell that story. As Maria Doulis, director of city studies at the Citizens Budget Commission, pointed out to me, the Bloomberg administration consistently identified NYPD overtime spending as part of its PEG initiative, only to see the department blow past their target.

That’s not to say that the Council is off base by urging the city to identify savings (though they should certainly account for their own $10 million increase in spending last year), and the fact that de Blasio wants to add thousands of new employees to various city agencies likely won’t alleviate overtime spending. Of course, as Doulis notes, overtime spending is not always neatly tied to increases in headcount – losses in personnel often mean that the remaining personnel have to work more hours.

Where the de Blasio administration can really identify savings is when they negotiate the next contract with city workers to account for the wage increase to $15 per hour. That pay bump should be tied to increased productivity and more efficient delivery of services that can be hammered out at the bargaining table.

The City Council is doing the right thing by holding the mayor’s feet to the fire, but both sides can do more to ensure that the city is protected in the event of a crisis.