Dear New Yorkers, 

New York City’s economy has proven resilient despite the disruption of the pandemic and tighter monetary policy. While there’s still a lot of uncertainty, our updated economic forecast projects a “soft-landing.” 

This week, I was joined by our Executive Deputy Comptroller Francesco Brindisi and Deputy Comptroller for Budget Krista Olson to testify to the NYC Council Finance Committee on the Fiscal Year 2024 Preliminary Budget. 

This year we have about a $1.3 billion gap, which is only about 1.5% of the Mayor’s proposed Preliminary Budget for $102.7 billion. That's manageable. But by Fiscal Year 2027, we're looking at gaps of as much as $11.6 billion – more than 10% of expenditures and that doesn’t include approximately $2 billion in costs shifts that the State is trying to impose, like making the City pay another half a billion dollars for the MTA and another billion in rent for charter schools. 

On the positive side, the city’s economy is actually in pretty good shape. 

We're back to 98% of the jobs we had before the pandemic and Fitch Ratings recently upgraded the City of New York’s General Obligation bonds, which fund our capital program, to AA, citing our strong recovery and the long-term reserves the City funded at my urging last year. 

While our economists are more optimistic about our chance of avoiding a recession, we also face many challenges and uncertainties. 

Cost of living, and specifically housing affordability, is pushing families out of NYC. After a dip at the beginning of the pandemic, asking rents rose to above their previous peak averaging $3,500 over the last few months. 

Local inflation has risen 12.8% since January 2020, while the minimum wage has not grown since 2019 – a strong rationale for raising the minimum wage. Which has not grown since 2019.

On Monday we released a new report, Understaffed, Underserved, that identifies areas where direct services to New Yorkers and the City’s long-term planning and risk management are being affected by high vacancy rates. The FY 2024 preliminary budget includes the impact of several rounds of savings initiatives, primarily through blunt vacancy reductions.

Among the 15 agencies with the highest vacancy rates, we found that the Department of Small Business Services, Department of Health and Mental Hygiene, and Housing Preservation and Development are falling farthest behind on the critical indicators they set for themselves in the Mayor’s Management Report.    

The Department for the Aging is seeing poor performance on home-delivered meals and case management services. The Department of Finance is taking longer to process SCRIE and DRIE applications. NYC Emergency Management is conducting fewer emergency preparedness drills and tabletop exercises, and the Parks Department is completing fewer capital projects on time.  

While an annual review to identify efficiencies is a necessary component to budgeting, I believe that the across-the-board, eliminate-half-the-outstanding vacancies approach adopted by the Administration is a penny-wise, pound-foolish approach, particularly at agencies where staff reductions are having a demonstrable impact on critical services. 

The best path forward is to build a city that spends wisely and prudently on staff and services, that sets aside adequate resources for a rainy day, and that invests in the future that New Yorkers deserve, this year, and for the years to come.  

Brad