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The near-term state of City finances is sound. The City is experiencing a historically high cash position. Private sector employment is back to pre-COVID-19 levels. Personal income tax revenues are well above 2019 levels and property tax collections in the past fiscal year were up 7.1 percent versus the prior year (non-property tax collections were up 4.1 percent).
And something I’m particularly pleased with is the strong New York City pension fund returns of 8%, that will enable the City to reduce its contributions by $330 million over the financial plan. While yearly performance can be influenced by market conditions, and we focus on long-term results, this is still great news for City retirees and the City’s fiscal health.
To be sure, though our economy is on strong footing in many ways, there are still serious long-term challenges that New York City faces. Outyear budget gaps, housing affordability, and the cost of shelter for asylum seekers are three of the most pressing issues.
My office has consistently advocated for strong fiscal stewardship to address budget gaps and to protect the City against serious economic downturns in the future. We need to transform the City’s Programs to Eliminate the Gap from short-term exercises into a regular feature of our budgeting process. Additionally, agencies should be accountable for claim settlement payouts, payroll operations should be modernized, and the City needs systems to improve grant revenue and expense tracking.
To solve the crisis of affordability, especially housing affordability, we need an ambitious deal at the State level to expand housing supply across all incomes while simultaneously protecting tenants from eviction without good cause. Part of this deal should be a new multifamily tax framework that replaces 421a, like the proposal our office put forward.
At the City level, we need to revive HPD’s capacity to get housing deals moving and launch a modern-day version of the Mitchell-Lama program to provide permanently affordable cooperative homeownership opportunities to working class families currently being priced out of the city.
More broadly, New York City needs competent and compassionate government in rising to the challenges we face. We should apply this framework to the dramatic increase of people seeking asylum. The issue is not the arrival of people here – immigrants have long been drivers of this city’s economic growth. However, providing so many of them with shelter is operationally demanding and very expensive.
Rather than seek to overturn the right-to-shelter, the City should work to clarify that this responsibility, grounded in the New York State Constitution, applies to all 62 counties in the state, not only to the five boroughs. Albany and Washington must do more to help. One wise thing New York City could do on our own is scale up the assistance we are providing to help people apply for asylum, and then to obtain work authorization six months later.
Finally, as the Governor and Mayor’s “New” New York Panel argued last year, securing our economic future as a place of density, diversity, and creativity will require new investments in child care, mental health, transit, and climate readiness. These revenues should be both progressive and effective, coming from high-income residents and the owners of high-value real estate, without further burdening low-income or middle-income New Yorkers.
Our report on New York City’s Fiscal Year 2024 Adopted Budget assesses these and other themes at greater length and offers insight into the City’s latest budget. I hope you will find it useful.
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