De Blasio to city agencies: Get ready to tighten your belts
Low income taxes, fears of recession and the risk of another federal shutdown means that city agencies will have to run tighter ships in 2019.
After a volatile month of stock trading in December caused fears of another recession to resurface and the city of New York took a $300 million hit to its income tax predictions, Mayor Bill de Blasio reported that city agencies should expect across-the-board budget cuts, and soon. According to his preliminary budget plan, the city must find a way to cut $750 million from city agency budgets in the next two months.
"If we keep ourselves focused on strategic matters, then we can make the right choices and continue to sustain the progress in this city," de Blasio said. "We know that every agency does its best, but some have programs that maybe haven't been as effective as hoped."
Because of recession fears, a weakening housing market and the possibility of a second government shutdown in February, de Blasio stated the city's budget needs to accommodate for a huge amount of uncertainty. What is certain, however, is that the city announced that it could expect $600 million less from the state to pay for a variety of social services this year.
"These are permanent cuts. When the money goes away, it doesn't come back," de Blasio said.
Though de Blasio promised that "frontline" service in the areas of public safety and public education would not be affected by these budget cuts, he announced that the hiring freeze for city agencies would be expanded to include attrition hiring too. Now, not only will the city not fill new job openings, but it will also not replace any employees who leave, but the mayor promised that this is as far as he plans to go, at least for the moment.
"We are not going to undermine the most essential services," de Blasio stated. "At this point there's no discussion of layoffs."
City agencies will know just how much money they need to save at the end of the month, at which point they will have two months to make the necessary changes. If the Office of Management and Budget isn't satisfied with a plan, it will step in and make one of its own.
"We have a legal obligation to balance our budget every year," de Blasio explained, pointing out that while federal and state governments have tools to manage budget deficits, cities are not so lucky. "We're not going to do something that we would have done."
It wasn't just the city that found budget shortfalls going into 2020 — Gov. Andrew Cuomo reported that the federal tax plan passed last year burned a $2.8 billion hole in state tax revenues.
Even with the wide-ranging cuts, de Blasio promised to maintain his inaugural slogan of making New York "the fairest big city in America." And, he pointed out, things may well change or the better.
"The word preliminary is very pertinent in this case," de Blasio said. "We're dealing with some very unusual circumstances here."