Despite strong economy, de Blasio unveils cautious budget

January 22, 2016 By Jonathan Lemire Associated Press

Bill de Blasio. AP Photo/Seth Wenig, File

Share this:

Despite the city’s roaring economy, Mayor Bill de Blasio outlined a cautious budget, one that largely forgoes splashy and expensive new projects and instead focuses on funding previously announced programs that further his administration’s stated mission to combat inequality.

The $82.1 billion preliminary budget, which de Blasio unveiled Thursday at City Hall, included a modest 0.5 percent spending increase and set aside billions of dollars for the city’s reserves in case of an upcoming economic downturn. And while the city has added 200,000 new jobs since January 2014 and the economy’s strength allowed the city to reap almost $1 billion more in revenue than the administration predicted, troubling fiscal signs elsewhere mandate a wary approach, de Blasio said.

“Despite our discipline, we’re facing some major challenges,” said de Blasio, a Democrat beginning his third year in office. “We in New York City have to protect ourselves.”

The proposal maintains the city’s reserve funds and devotes an additional $600 million a year its pensions. De Blasio said the city would meet its obligations to its five pension systems with the goal of 100 percent funding by 2032.

But the budget was by no means all austerity.

It does not contain any tax hikes or agency spending cuts, and it includes more than $700 million in additional spending on city programs, including several that have become central to the administration. The mayor is earmarking more money for affordable housing, mental health programs, a new Staten Island Ferry and increased park security in the weeks after a young woman reported being gang-raped by teenage boys at a Brooklyn playground.

The budget also adds more than $50 million to the city’s ongoing struggle to combat homelessness, which has dominated headlines and driven down the mayor’s poll numbers in recent months.

The proposal also reflects, yet again, the complicated relationship between de Blasio and Gov. Andrew Cuomo, a fellow Democrat. When the governor unveiled his state budget plan last week, he proposed shifting Medicaid costs back to the city and forcing it to pay more for the City University of New York, which in total could add $1 billion to the city’s bottom line.

After de Blasio and others balked, Cuomo appeared to back off the idea.

“I am taking the governor at his word, and I am holding him to his word,” de Blasio said Thursday. “We cannot accept a cut. It would have had a very negative impact on the city.”

A spokeswoman for the governor simply referred to Cuomo’s statement last week when he said his budget “won’t cost New York City a penny” but the city needed to find some inefficiencies.

Thursday’s presentation is just the beginning of the city’s budget process. The City Council, which is overwhelmingly Democratic, will soon commence hearings and make its own recommendations. The mayor will then offer a revised proposal this spring, and the budget will be adopted before the new fiscal year begins July 1.

Some fiscal watchdogs expressed concern that de Blasio was not doing enough to slow spending in case of an economic slump.

“The economy is doing well, which bodes well for city tax revenues and giving breathing room for the mayor’s priorities in the budget,” said Maria Doulis, vice president of the nonpartisan Citizens Budget Commission. “But the savings program is weak, and he’s not doing enough to bolster reserves to ward off a recession.”