Mayor Eric Adams and City Council strike $101 billion budget deal

Adams and Adams have reached a deal. 

New York City Mayor Eric Adams and City Council Speaker Adrienne Adams shook hands Friday afternoon on a $101 billion budget – their first budget in the city’s top political roles. It funds everything from schools to street redesigns, and includes a record high amount of reserves, as the city’s economy continues to grow out of the COVID-19 pandemic.

The budget deal was reached three weeks ahead of July 1, the start of the 2023 fiscal year and the de facto deadline for the council and mayor to reach an agreement. The handshake – said by the mayor’s team to be the second-earliest agreement in city history – signaled a more painless negotiating process than the city has seen in recent years, though it wasn’t without its last-minute sticking points, such as funding for public schools.

But in a packed City Hall rotunda on Friday, Speaker Adams announced a string of wins for the council, including securing $1.15 billion more than the mayor’s proposed budget to fund various council priorities, which she claimed amounted to 90% of the budget requests the body made in its April budget response to the mayor. “That is an unprecedented outcome for this council,” the speaker said on Friday.

The state can “take notes”

Both Adamses said that the early handshake deal reflected the large degree of agreement between his administration and council. “This was easy for us. When the council stated the things they wanted in the budget … I said, ‘That sounds like me,’” the mayor said. “People want to spend so much energy on where we are not aligned.”

“As far as the state is concerned, they can take notes,” the speaker said, when asked if the city’s early budget deal could set an example for the state, which passed a budget past deadline this year.

As of early Friday afternoon, no budget documents had been provided to the press. But announcements made on Friday included a record level of money in the city’s reserves – $8.3 billion – and $90 million for a property tax rebate for homeowners, a priority achieved by a bipartisan push from Democratic Council Members Selvena Brooks-Powers and Kamillah Hanks, and Republican Council Member Joe Borelli. Speaker Adams also announced a new initiative that will allocate $100,000 to each council member to be spent in their districts on community safety programs and victim services.

The $101 billion budget comes in over $2 billion more than the $98.7 billion agreement that former Mayor Bill de Blasio and the last City Council reached last year. Budgets are adjusted throughout the year, typically trending upward as the city adjusts its normally conservative revenue estimates. The city’s expense budget is required by law to be balanced, but the city has some flexibility with the numbers through mechanisms like prepaying expenses and saving money in designated reserve funds. 

The City Hall press conference was celebratory Friday, but some critics saw runaway spending. “They built up a spending base which is, in the long run, not supported by the revenue,” said Andrew Rein, president of the Citizens Budget Commission, a business-backed think tank that often advocates for fiscal restraint. “They really blew a big opportunity to make a much bigger deposit in the rainy day fund. They didn’t identify any savings to offset the cost of their new priorities.” While the upcoming year’s budget is balanced, the mayor noted that there’s an average $4 billion budget gap to be closed in each of the next four years.

A back-and-forth on affordable housing, parks, police

The city’s budget comes out in three phases – a preliminary budget proposal from the mayor, an amended executive budget from the mayor incorporating some of the council’s feedback, and the adopted budget, passed by the City Council and signed by the mayor following negotiations. Details of the final budget were agreed to in concept on Friday, It’s expected to be finalized and passed into law within the next two weeks, and represents some major changes from the preliminary budget that Adams first presented in February. 

Adams presented a $98.5 billion preliminary budget built around 3% across-the-board agency cuts as part of a citywide Program to Eliminate the Gap (PEG), something he promised to do on the campaign trail. But with the city facing an affordable housing crisis, staff shortages at multiple city agencies and the challenge of economic recovery – all amid an ongoing pandemic – the City Council pushed back on the 3% cuts in their budget response. Among the Council leadership’s specific complaints were proposed cuts to sanitation and education spending, unfulfilled promises to boost affordable housing funding and calls to spend more on mental health and other social services programs. 

A month later, Adams proposed an executive budget that he pitched as answering his critics’ complaints. It did – to an extent. The $99.7 billion executive budget – an increase thanks to higher than expected revenue projections – incorporated some of the council’s asks, including reduced cuts at some city agencies, new funding for a mental health crisis response program and some (though not enough, critics said) more money in the capital budget for housing.

But the executive budget still fell short in the council’s eyes, including when it came to that capital housing money. Adams promised on the campaign trail to devote $4 billion per year to building and maintaining affordable housing, but in the executive budget committed just over $2 billion a year. Council leadership initially signaled they would hold Adams to the $4 billion per year promise, but the final deal on the budget didn’t include any additional funds beyond what was committed when the executive budget was released – an amount the mayor still called historic. The lack of movement on capital funds for housing will likely anger housing advocates and progressive lawmakers. “This budget fails to meet the needs of this urgent moment with the level of capital funding needed for affordable, supportive and public housing,” Comptroller Brad Lander said in a statement on Friday that also included some praise for the overall budget deal.

Another promise made on the campaign trail caught up with the mayor when the initial spending proposals didn’t include a parks department budget amounting to roughly 1% of the total city budget. Though advocates had pushed for the mayor to fulfill this promise, the final budget still fell short of the 1% commitment. 

Council sources highlighted other wins, including successfully pushing back against plans by the administration to add roughly 600 new correction officers. Adams said they were needed to staff new units for city jails’ version of solitary confinement. He said Friday that “every agency must do more within their budget,” and that includes correction.

The New York City Police Department budget was far from a central focus in negotiations this year, especially compared to two years ago, when the budget process focused overwhelmingly on police spending amid nationwide protests against police brutality. Still, this year’s budget includes an essentially flat NYPD budget, but with new units of appropriation that will provide more specificity on how the department spends its nearly $6 billion pot. Asked about how the NYPD budget will produce more transparency, the mayor said the goal was more efficient deployment of officers. “Look at our books, find the problems,” the mayor said, returning to his frequent refrain that too many police officers are deployed for parades, logging overtime hours.

Information control

Until Friday, little was revealed about the state of negotiations between the council and mayor. The speaker ran a tight ship in her first budget leading the body, focused on limiting leaks. One advocate described it as a “cone of silence” over the council’s Budget Negotiating Team, as interest groups – and reporters – were given extremely limited information about the conversations. 

Privately, some on the mayor’s side of City Hall grumbled that the push and pull over a $215 million planned reduction to school budgets education funding was nothing but a last minute power play by United Federation of Teachers President Michael Mulgrew. School budget cuts weren’t even in the Council’s April budget response – though advocates say the extent of the cuts, which are tied to reduced student enrollment, were only made clear this week, when individual schools’ budgets were revealed. The final budget still includes those cuts, but both the mayor and speaker suggested that adjustments could be made in the future, reinforcing the fact that the city’s budget changes throughout the year. “The budget process is a year-round endeavor that requires our consistent attention,” the speaker said on Friday, calling this deal “the beginning of that process, and not the end.”