Several Points of Funding Contention for City Budget Negotiation
February 28, 2017
By Samar Khurshid
The city’s annual budget season kicked off on January 25 with the release of Mayor Bill de Blasio’s $84.7 billion preliminary budget for fiscal year 2018, which begins July 1. Starting Thursday, the City Council will hold weeks of hearings to examine the financial plan, listening to testimony from city officials and gauging the needs and allocations of city agencies. As usual, stakeholders across the board -- City Council members, other city elected officials, nonprofit organizations -- are making their budget priorities known, pushing for funding for the next fiscal year. Negotiation will continue until a new budget deal is reached between de Blasio and the Council sometime in June.
As the major areas of contention become clear, some remain from recent years, while others are new, and questions loom over the city budget cycle due to uncertainty in Washington, D.C., state funding shifts being proposed by Gov. Andrew Cuomo, and a slowing city economy. Along with a debate over how much the city should be putting aside in savings, additional funding is being sought for initiatives like free universal school lunch, reduced-price MetroCards for low-income New Yorkers, the Parks Department workforce, and more.
After it holds a round of hearings, the City Council will release an official response to the mayor’s preliminary spending plan. Then, the mayor will release his executive budget, kicking off another round of Council hearings before the two sides move to closed-door negotiations and come to a final agreement. All the while, elected officials, advocates, service providers, and others will be lobbying, holding press conferences and rallies, writing op-eds, and seeking to influence the budget process to their desired outcomes.
As with last year’s budget cycle, de Blasio has tried to ensure that city agencies are creating larger savings and reserve funds are being set aside for rainy day spending. The city has strong reserves that have been accrued even as the city budget has expanded rapidly under de Blasio and this City Council, thanks in large part to a booming city economy and strong tax revenues. Still, City Council members, Comptroller Scott Stringer, and fiscal watchdog groups have all called on the mayor to do more, particularly since the city is beginning to feel the effects of a widely predicted economic slowdown and also faces the threat of potential funding cuts from the federal government.
“While the Mayor’s Preliminary Budget increases real programmatic savings, there is room to find additional, lasting savings across all agencies,” said City Council Speaker Melissa Mark-Viverito and Council Member Julissa Ferreras-Copeland, chair of the finance committee, in a joint statement after the mayor released his preliminary budget. Mark-Viverito and Ferreras-Copeland will head the Council’s budget negotiations with the administration.
Stringer, the city’s chief fiscal officer, echoed the call for increased savings. “City agencies must do more to scrub their budgets and operations to identify more savings and efficiencies to help address our risks,” he said when presenting his analysis of the preliminary budget on Feb. 15. He pointed out that agencies have contributed an average of 1 percent to the city’s savings under Mayor de Blasio, as opposed to 2.7 percent before 2014. He also pushed for increasing the city’s budget cushion from the current 10 percent ($8.5 billion) for fiscal year 2018 to anywhere between 12 percent and 18 percent.
The Citizens Budget Commission, a nonprofit fiscal watchdog, has similarly stated that agencies should “identify agency improvements” to find an additional $500 million in savings which the mayor promised would be included in his executive budget. “Reducing unnecessary spending allows the City to direct resources effectively and build larger reserves as New York City’s economy shows signs of slowing and uncertainty remains around the future of federal funding,” wrote Riley Edwards, CBC research associate, in a blog post.
While the city relies on about $7-8 billion in federal funding annually, it is unclear how President Donald Trump and the Republican-led Congress will approach upcoming budget negotiations and funding for New York City. Trump has threatened to pursue funding cuts for so-called sanctuary cities, which are those like New York that welcome and protect undocumented immigrants.
The proposed preliminary budget contains $1 billion in new spending, but elected officials and nonprofit groups have identified a number of priorities they would like to see funded in the next fiscal year. Certain budget requests have even persisted from last year, for instance nonprofit human services organizations that contract with the city are calling for increased funding yet again, and Council members are pushing for full funding for the Summer Youth Employment program. A closer look at those and several other points of significant funding debate:
Human Services Nonprofit Funding: City-contracted nonprofits provide a range of human services such as homelessness prevention, mental health care, after-school programming, to mention a few. These organizations and their employees have been facing economic challenges due to funding levels. In the preliminary budget, de Blasio proposed 2 percent annual wage raises for the next three years for 90,000 nonprofit employees. However, these nonprofits have been underfunded for years under prior administrations and are calling on the de Blasio administration to increase their contracts by 12 percent across the board, for a $500 million price tag, to fully cover programmatic and overhead costs.
Summer Youth Employment Program (SYEP): Last year, at the urging of Council members, the city baselined $39 million in funding for 60,000 slots for SYEP, which provides six weeks of paid work to people 14- to 24-years-old. This year, the preliminary budget includes another $9.3 million to baseline another 5,000 slots. But Council members are disappointed with that number, particularly since a task force created last year to study the program has not issued its recommendations yet. The members want those findings to have bearing on the final funding in the executive budget, with the ultimate goal of reaching 100,000 slots in the program.
“Fair Fares” Funding: Council Member Ydanis Rodriguez, transit advocates, and nonprofit groups are calling on the mayor to fund the “Fair Fares” proposal, which would provide half-price MetroCards to low-income New Yorkers. The proposal would cost about $200 million and affect around 800,000 commuters. The mayor has called it “a good meaningful proposal” but insists that the city cannot afford it and funding must come from Albany since the MTA is a state-run agency.
Universal Free School Lunch: Advocates and elected officials have been pushing Mayor de Blasio to follow through on a 2013 campaign promise and provide universal free lunch for all of the city’s 1.1 million public school children. According to the United Federation of Teachers (UFT), about 47,000 more children would get free lunches if the program became universal, and 92 percent of the cost would be covered by the state and federal governments. Proponents of universal free lunch argue that it would remove the stigma associated with the current program, which gives free lunches to low-income and homeless children.
“I am also deeply disappointed that once again, the Mayor has failed to fulfill his campaign promise to provide universal free lunch,” said Public Advocate Letitia James, in her response to the mayor’s preliminary budget. “No matter how much we do for our schools, if our students aren’t well-fed, they won’t be able to learn. To truly give our children endless opportunities, we must give them the best tools to succeed.”
Liz Accles, executive director of Community Food Advocates, and leader of the Lunch 4 Learning campaign, said in a press release, “Hungry children face great disadvantages academically. By breaking his word and excluding Universal Free School Lunch from the preliminary budget again this year, the Mayor has made it clear that educational equity and economic inequality are not priorities, after all.”
Public Housing Investment: Mayor de Blasio allocated $1 billion in capital funds in his revised capital spending plan towards roof repairs at 729 NYCHA buildings, putting a dent in the $17 billion in capital needs at the public housing authority. However, Council Member Ritchie Torres, who chairs the Council’s public housing committee, and others believe the city should be investing more. “A 10-year $1 billion commitment to public housing might sound substantial but it represents crumbs,” Torres told the The Daily News. “The city should be stepping up. If the city can invest $2 billion in an elaborate street car, surely it can invest more in public housing,” Torres said, referring to the mayor’s BQX streetcar plan.
Expanding Citi Bike: Council members and transit advocates rallied outside City Hall in January calling on the mayor to provide public funds for a citywide expansion of the Citi Bike program. “Though the bike sharing program has been a runaway success in some parts of the city, it has also left the outer boroughs and many low-income neighborhoods significantly underrepresented,” said Council Member Mark Levine, in a press release.
The program, which is currently completely privately funded, is expected to expand to 12,000 bikes by the end of the year, but would need between 70,000 to 80,000 bikes to cover the entire city, according to estimates from the Department of Transportation. Installing 2,000 new bikes costs about $12 million, AM New York reported.
Council Member Rodriguez, chair of the Council’s transportation committee, has called for public investment in Citi Bike, but the mayor has said he has no plans to do so at this time. At a press conference alongside Rodriguez, the mayor did say that budget negotiations are just beginning, though. “It’s a discussion we’re always willing to have with the folks who run Citi Bike,” de Blasio told Gotham Gazette at a recent news conference, “about how we can work with them in terms of their future and allowing it to be strong and hopefully continue to expand, but we have never committed public funds, and we do not have plans to.”
Rodriguez, who was also at the news conference, then said, “I hope that the conversation will continue. I believe that we can look at possibilities at some point to bring the public dollars though. So this is something that the private sector, they had to do more in order to bring Citi bike through the whole five boroughs.”
Expanding Homebuyer Loan Program: Council Member Rafael Espinal has called on the mayor to increase city help for those looking to make a home purchase. Espinal wants the city to double New York City Housing Preservation and Development’s HomeFirst Down Payment Assistance Loan Program and to raise the cap of the loan from $15,000 to $30,000 at minimum. “As property values continue to spike, this program must reflect those increases to actually enable homeownership,” Espinal said in a statement.
Homecare Services Funding: AARP New York and LiveOn NY, two of New York’s largest senior advocacy organizations, were disappointed with the mayor’s preliminary budget for its “status quo” funding of $4.3 million for senior homecare services. These services have been underfunded for years, they say, noting that the waitlists for senior home care increased by 15 percent in the two months after last year’s budget was adopted.
“Homecare services are a win-win for all; they help New Yorkers age with dignity in their own homes - where most want to stay - while helping avoid even more expensive, taxpayer-funded institutional care settings,” said Beth Finkel, state director of AARP New York, in a statement. The two organizations say the $4.3 million should be baselined, and further funding allocated, to ensure adequate services for a senior population that is expected to increase by 40 percent between 2010 and 2040.
Parks Department Funding: Council Member Mark Levine, chair of the Council’s parks committee, criticized the mayor’s preliminary budget for yet again excluding funding for 150 parks workers, pointing out that the Council had to fund these positions in each of the last two years. “A thriving park system isn’t just a luxury in a dense city of 8.5 million people. It’s essential to livability,” Levine said in a statement, noting that these workers are critical for the city’s Park Equity Agenda that aims to improve long-neglected parks in low-to-moderate-income neighborhoods.
Lynn Kelly, executive director of New Yorkers for Parks, said in a statement that the mayor should baseline the funding. “Parks are critical pieces of infrastructure, as essential to the health of our city as quality roads, schools and sewers,” Kelly said. “Infrastructure isn’t just bricks and mortar; it’s also the dedicated maintenance staff who keep it up and running.”
Funding Curbside Pickup Program: Last year, the city funded a pilot program in Staten Island, proposed by Council Member Steven Matteo, allowing residents to request curbside pickups of electronic waste for recycling. Matteo pledged on Twitter last month that he would make it a priority this budget season to push for permanent funding for the program.
Veterans Department Funding: The Department of Veterans Services, which was fully established as a standalone agency last year, saw a planned $318,000 reduction in the preliminary budget from $3.95 million to $3.63 million. The reduction came from one-time costs incurred in setting up the department, but veterans advocates and elected officials were nonetheless dissatisfied and called for not only restoring the funding but expanding it further.