Dear New Yorkers,

This is a long email, but important! Yesterday, I testified to the New York City Council on Mayor Adams’s FY 2025 Preliminary Budget.

A few important points I covered in my testimony were transparency in the budget process (or, more precisely, the lack of it), cuts to critical services, and inadequate affordable housing policies. My full report on the FY 2025 Preliminary Budget provides clarity about the state of City finances.

Here's the bottom line:

Rather than the Adams Administration’s unpredictable approach to the budget process, sound management and strategic investments are required to face the City’s fiscal challenges, confront the affordability crisis, and ensure strong economic growth in the years ahead.

Lack of transparency in City finances

There are two ways in which the Adams Administration’s approach has unhelpfully muddled the budget process. For starters, there’s been a lot of unnecessary budget whiplash in the last few months.

Last June, at the time of the FY 2024 budget adoption, the Administration presented the FY 2025 budget gap at $5.1 billion. In November, it increased that projection to $7.1 billion, even after one round of proposed cuts. Then just a few weeks later, in January, the FY 2025 budget was presented as balanced.

These shifts are caused in part by the administration’s swinging cost estimates for asylum seeker services. Last June, it projected the cost at $3.91 billion. Just two months later, it increased that projection to $10.82 billion. More recently, it got lowered to $9.09 billion. We've got to get this under control.

Secondly, the significant underbudgeting of many predictable expenditures, particularly special education Carter Cases and uniformed overtime, further clouds the picture. This pattern of underbudgeting expenses is a routine part of the City’s budgeting—and it’s not a good practice. Additionally, the Mayor has not been clear on which Federal Stimulus funded programs will continue at current levels or face reductions as these funds expire.

Where does this leave us? All in all, the Comptroller’s Office projects a budget gap of $3.30 billion in FY 2025 – with more outyear gaps on the horizon.

Stronger fiscal management will reduce the need for big cuts 

How should the City approach these budget gaps?

We shouldn’t respond with shortsighted, drastic cuts to vital City services and programs like CUNY, libraries, alternatives-to-incarceration, and more. Instead, we should work harder to cover outyear budget gaps through stronger fiscal management.

We can achieve long-term savings by reeling in areas of overspending, like uniformed overtime. We can reduce pricey Carter Case settlements by providing better special education services in our public schools, as my office has previously suggested. By making agencies responsible for car crash claim and settlement payouts (as recommended in our report on traffic collisions), we could further increase our savings.

We can also save money with stronger management of emergency procurement. In a report released last week, my team found that the Adams Administration's haphazard approach to emergency contracting (and its failure to compare or control prices) resulted in City agencies overpaying MILLIONS of dollars to staff asylum seeker services. We compared the City's top 4 emergency contracts for staffing asylum seeker facilities, like welcome centers and HERRCs, and found drastic discrepancies in pricing. In one comparison, compensation ranged from $58 to $201 for the same service.

Finally, rather than evicting asylum seekers and families from shelter just 30 or 60 days after they’ve arrived, we should invest in legal services, case management, and assistance to obtain work authorizations. This is the most cost-effective, compassionate approach to helping immigrants get on their feet, move out of shelter, and find employment.

Affordable housing should be the #1 priority this year

Everywhere across the City, rent remains incredibly high, burdening New Yorkers. Unfortunately, the FY 2025 Preliminary Budget does not do nearly enough to finance the production and preservation of truly affordable housing—one of the most powerful tools the City has to stabilize neighborhoods and protect low-income and working families from displacement.

We urgently need a deal in Albany that increases housing supply across income levels, with a focus on affordability, good cause protections, and housing vouchers to help people escape homelessness and secure permanent housing.

We also need much larger City investments in deeply affordable, community-controlled rental and limited-equity cooperative homeownership housing. All the while, we must ensure that the Department of Housing Preservation and Development has additional resources to clear its backlog of affordable housing projects, develop and train new staff, and expand the City’s social housing footprint (as covered in our recent report, Building Blocks of Change).

Our short-term budget decisions must not short-change New York’s future. With sound management and strategic investments, we can tackle outyear budget gaps, confront the affordability crisis, and ensure strong economic growth in the years ahead.

Read my full report on the FY 2025 Preliminary Budget.

Thanks,

Brad