When New York City Mayor Bill de Blasio first presented his $92.2 billion preliminary budget proposal for the next fiscal year, he framed it as a plan draped in economic uncertainty and called for his administration’s first austerity measures across all agencies to achieve $750 million in savings.
In his executive budget presentation on Thursday, the mayor continued to issue fiscal caution while he outlined a $92.5 billion plan that achieved a higher savings target with a modest increase in spending.
From the outset, the mayor praised city agencies and his own Budget Office for embracing his first so-called PEG, which stands for “program to eliminate the gap.” PEG programs were routine under the Bloomberg administration where agencies would be charged with cutting a straight percentage. De Blasio opted for a more tailored approach, where each agency was charged with finding a set dollar amount of savings.
“This was an agency by agency targeting process,” de Blasio said praising the “creativity” of each agency. His latest proposal boasts $916 million in total savings including $629 million from the PEG program—up from an initial target of $545 million.
The biggest PEG reduction was at the Department of Education which cut $104 million, including nearly $20 million used to pay for extended learning time at certain struggling schools. The city also eliminated 1,600 vacant positions for a $116 million in savings.
Another notable cut that hit this year’s budget was a $9 million shave from the First Lady’s signature mental health program Thrive. The program faced sharp scrutiny from the City Council and City Comptroller’s office in recent months that sought more tangible information about the returns on the city’s hundreds of millions in investment.
At the same time the city looked to scale back, the state budget also raised new budget challenges. The mayor said the city faced $600 million in “unfunded mandates” from the state. But slathering praise on Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins, the mayor said the city was able to beat back half of those obligations, leaving it with a mere $300 million in state-shifted costs to cover.
Those include $125 million: financial assistance to families in need (TANF), $96 million: unfunded election reform mandates, $59 million: vital health services for vulnerable New Yorkers, including services that help combat measles and $25 million: education funding shortfall.
Despite the note of caution, the mayor did outline some new spending. The city plans to add $22 million dollars towards its outreach for the 2020 Census, which the mayor initially allocated $4 million. An accurate count is crucial to determining federal funding for public education, for public housing, for Medicaid, senior centers and more. The count is also used to determine the number of congressional districts in the state.
The announcement comes as the Supreme Court weighs whether the government can add a question about citizenship status to the census, a move that advocates say will lead to lack of participation among immigrant communities.
Still, despite logging almost $1 billion in budget cuts, some fiscal watchdogs said they were concerned the plan didn’t go far enough to keep New York City on economically steady ground.
“Mayor de Blasio's stay-the-course budget does not take the steps needed to preserve services or forestall tax increases in the eventual hard times,” said Andrew Rein, president of the Citizens Budget Commission.
In a statement, the City Council also expressed disappointment in the mayor’s executive budget, noting that they provided a budget response that also found nearly a billion dollars in savings and yet few of their budget priorities were included in his plan.
The Council pushed for including higher levels of reserve funds, pay parity for a range of city workers including pre-K instructors at community-based organizations and an additional $14 million for the 2020 Census.
The mayor’s latest proposal kicks off another round of budget hearings with the City Council. A final budget agreement is due June 30th.