New York City Mayor Bill de Blasio presented an $82.1 billion preliminary budget for the city's 2016-17 financial year on Thursday, noting the city's strong economic position but striking a cautionary note over the economic outlook.
New York City, which sits at the center of one of the biggest regional economies in the world, has seen strong growth since the recession that followed the 2007-09 financial crisis. That has allowed officials to build budget reserves, but doubts remain whether that growth will continue.
"There are lots of real challenges that are coming through to make us uncertain about what our economic future is," de Blasio said during a presentation at City Hall. "We as New York City have to protect ourselves."
The mayor highlighted concerns over China's economy, question marks over global growth, the current plunge in the U.S. stock market and terrorism as threats to the city.
The city added 213,000 jobs in 2014 and 2015, the strongest two-year gain in recent history. The number of jobs are at an all time high of 4.2 million. Yet de Blasio said the economy may be overdue for a recession and pointed to the devastating effects of the last recession.
The budget has nearly $5 billion in budget reserves, including $3.4 billion for retiree health benefits and $1 billion in general reserves in case the city has to "go it alone" during a recession, de Blasio said.
The total budget represents a small increase over the previous year's $81.7 billion.
De Blasio, a left-leaning Democrat who took office at the start of 2014, highlighted signature programs such as raising the minimum wage to $15 per hour for all city workers, an initiative that will cost the city $115 million when fully implemented.
He also outlined plans to tackle the city's homelessness problem through millions of dollars for shelter repair, prevention initiatives and programs to move people out of shelters to permanent housing.
Dean Fuleihan, the city budget director, said the budget was balanced in the current and coming financial year. He said $1 billion in savings in the 2016-17 budget will come from reductions in debt service and savings in agency spending.
The city's public pension system will consume a larger chunk of revenues as increased mortality projections mean the city will have to pay an additional $600 million. That brings the city's total annual pension bill to $9.4 billion.