Final NYC Budget Cut Over $4B Amid COVID-19 Crisis
This week, the New York City Council and Mayor de Blasio agreed on an $88.2 billion budget for the fiscal year that began July 1. The budget is 5% lower than last year to reflect an anticipated $9 billion loss of tax revenues due to COVID-19. It includes a mix of agency cuts, labor savings and tapping into reserve funds. The city hopes to receive federal stimulus funds to avoid additional reductions.
The biggest controversy is over a $1 billion cut to the New York City Police Department, that was demanded by protestors who camped outside City Hall during the past week.
Nearly $800 million in savings was achieved by:
- Cancellation of a cadet and an academy class
- Transfer of school security, traffic agents, and homeless outreach staff to other city agencies
- A reduction in planned overtime spending
Other cuts included:
- Elimination of some Department of Education outside contracts
- Curtailing overnight service on the Staten Island Ferry
- Reduction in the affordable housing capital budget
- Reduction in garbage collection
The mayor also tapped into $4 billion of the city’s reserve funds for the first time and assumed $1 billion in savings can be achieved through future negotiations with unions representing city employees.
The mayor has sought permission from the New York State Legislature to borrow up to $7 billion to avoid further cuts. New York City Comptroller Scott Stringer and the Citizens Budget Commission (CBC), a nonpartisan think tank, opposed borrowing, given the uncertainty of when the economy will recover.
The city comptroller estimated that residents could owe up to $550 million annually over 20 years if the city were allowed to borrow $7 billion. 
If the city is unsuccessful at labor negotiations and does not receive additional federal stimulus or the power to borrow, the mayor has said he will be forced to lay off 22,000 city workers in October. The CBC has suggested some reduction in headcount, especially since the city has added more than 30,000 municipal employees during de Blasio’s tenure. 
At the City Council’s urging, the budget restored funding for some programs that the mayor had proposed to cut including:
- summer employment programs for youth
- guidance counselors and social workers in schools
- new funding for COVID-related needs such as health care and food programs
Photo: Zack Frank/Shutterstock
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