Thursday, January 26, 2017

CITY BUDGET CALLS FOR INCREASED SPENDING BUT CITY COULD SOON CRY POVERTY

On Tuesday, Mayor de Blasio released the fiscal year 2018 budget. It has huge reserves. The budget calls for almost $85 billion in spending, which is an increase over this year.

This is from the Mayor's Fact Sheet on the budget:

The City does recognize the need to be cautious in the face of uncertainty. As a result, this administration has put a record amount of funding in reserves. Specifically:
  • The General Reserve is at $1 billion in FY18 and every year of the financial plan, compared to the traditional $300 million.
  • The Retiree Health Benefits Trust Fund is at $4 billion, $3.3 billion the result of this Administration.
  • The Capital Stabilization Reserve that was established under this Administration in FY16 has been modified to include $250 million in every year of the four-year plan, compared to the one-time $500 million previously established.
As a result, independent monitors and rating agencies continue to affirm the City’s strong budgetary management.

The Administration is also managing out-year gaps and continuing to find savings across City government. As of the Preliminary Budget, agency and debt savings will reduce expenses by $1.1 billion in FY17-18. This is addition to the $1 billion found in the FY17 November Plan and with more to come in the Executive Budget this spring.

It looks like the city is flush with cash however when President Donald Trump announced yesterday that the federal government could cut funding to sanctuary cities, the Mayor came out fighting. De Blasio now has an issue to claim the city might be broke and he also has his de facto adversary for reelection: Trump.

Here is part of de Blasio's reaction to Trump's Executive Order on sanctuary cities from Politico New York.

"President Trump issued an executive order today and it's purported purpose was to enhance public safety, but here in New York City and in cities across this nation this executive order could in fact undermine public safety," de Blasio said during a quickly arranged press conference at City Hall, as the New York Police Department Commissioner James O'Neill and a dozen other senior city officials stood at his side.

De Blasio argued that the "potential funding cuts suggested in the executive order would first and foremost fall on the NYPD," and that "the executive order on its face contradicts its stated purpose," which is to help keep Americans safe. 

Look for the Mayor to blame Washington for whatever problems the city may have. It is a smart reelection strategy.

When municipal labor contracts come due, expect the city to scream that it is broke.

18 comments:

Bronx ATR said...

When the citizens of NYC are impacted, even slightly the tide may turn against deBlasio. These fines are not slight - they will have a major impact. He needs to tread carefully, explain and carefully consider all ramifications. It's easy for some to beat a drum sipping a Starbucks, but are those same people willing to make sacrifices to their quality of life for their ideals? And what about those New Yorkers who agree with Trump? Should they be punished with the drummers? I admire deBlasio for this, but it could backfire big time.

JR said...

So get ready for more 1 percent raises, which would be a victory, of course.

Highly Effective King Clovis said...

Or .2 percent raises but we must work triple shifts.....also a victory!

Bronx ATR said...

1% or .2% is very optimistic. The fines and/or lack of federal funding could spell layoffs across city agencies, including education. If Trump follows through, I'd pull all security and police from Trump Tower. Trump should remember what we try to forget - he's a New Yorker.

Anonymous said...

Thank God for LIFO. Hate to say that but in these uncertain times it is true.

Anonymous said...

Diblahsio would be a complete fool not to comply with the federal government. First of all not every New Yorker agrees with his stance on sanctuary cities. Secondly, he would be derelict of duty to lose billions of dollars to help run this city over his own personal ideology. What a big dope.

Unitymustgo! said...

You are all missing the bigger point. The city will cry poverty exactly as our next contract is due for negotiation and exactly as the larger arrears payouts begin. The mayor will be attacked that it is fiscally irresponsible to pay out all this bonus. Then Mulgrew and his super Unity party negotiators will sweep in and get us a swell deal. Something really good like half. Really great, Right!?, No more waiting!! No more fear of dying or being fired. You can finally move if you want. Of course only after you get your smaller than expected check will they explain that it was only half of what had accrued so far, not half of what was left in the BS piggie bank from that misleading chart they made when selling our lousy deal in the first place. Got to love the UFT.

Anonymous said...

Only an F*ing idiot could look at that piggy bank and 1. not be insulted 2. vote for the contract (ooh right, the 1k bonus was a distraction)

Ooh right, what was it, over 70% apparently approved of the piggy bank graphic and what it sold us. Oink Oink

James Eterno said...

Unity Must Go-I have nothing but the deepest respect for you but here I must take issue. I think it is not in our interest to say how Unity will give away half our money. If this rumor spreads and if Unity doesn't give away what we are contractually entitled to, they will claim victory by getting us nothing.

I never said the UFT would sell out the ATRs with a time limit to get a new job or be fired because I knew it was something Unity would not give away because other public unions would kill them for it. I was right but UFT claimed a totally undeserved win when they didn't totally sell out the ATRs in 2014 because so many people thought they would. Our job is to raise expectations, not lower them. We deserve so much better than what Unity has done to us.

In a recent post, someone asked the IBO how much the arrears will cost the city and it isn't that much. The arrears will come whether the city cries poverty or not. If I'm wrong, I will be the first to admit it.

Anonymous said...

The root of the problem can be summed up in one word: MULGREW
We so obviously have a corrupt leader on our hands who has his own self interest first and the members a distant second.
Corruption takes root from leaders when those under them are not paying any attention, or worse are apathetic.
And there's no mistaking that 70% of this unions membership has their head up their asses.

Harris L. said...

There are hundreds of thousands of people in this City tonight who fear for their lives at the hand of The Tyrant and the only thing that my colleagues, teachers of some of the children who fear for their safety, can think about is whether the Mayor and the City will lose some money that might otherwise put a few pennies into their pockets.

Well done!

Bronx ATR said...

Harris L,
Those are my exact sentiments. Trump has created an ethical and moral test for this city and for us as individuals, but many teachers appear too shallow to preceive it.

Anonymous said...

The city is going to cry poverty no matter what is going on in the world. It has happened with every contract, so why pretend something different is going to happen?

Anonymous said...

Illegals are illegally here! Enough is enough! My tax dollars pay their medical care, they overcrowd our schools, steal from our system, etc. my retro, that I worked for and earned is worth more than every illegal in America, as I followed the rules and played by the rules!

Anonymous said...

If we are gonna be getting only.5% raises then I want 2 OBSERVATIONS AND MY PARKING PERMIT BACK!!!

Unitymustgo! said...

YES, parking permits back! Amazing what you forget about. James, I completely agree with you. I hesitated when writing it. I know not exactly your point but it's sad to me that I felt hesitant even expressing my view out of fear it might spark some thought in UFT Unity. We are living in some strange times. Let's all cross our fingers.

James Eterno said...

Unitymustgo! is my favorite name here. It says it all.

Harvey Smith said...

Well, some cities are expecting for tough financial times and they need financial assistance to be able to cover the necessary expenses. They have the budgets and the money for these budgets but it seems that they are getting in trouble. I am afraid that it can end up with poverty in the cities. It’s necessary to find an effective solution urgently! However, I don’t know where the local government can get the money. I would suggest to get loans online fast but I think that they need more money for the city budget.