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Adams is set to release his preliminary budget. Here's what happens next.

Mayor Eric Adams is expected to release his first preliminary budget on Wednesday, outlining where he wants to allocate funds to carry out his policy priorities and keep the city running. 

The current budget, former Mayor Bill de Blasio’s, stands at $106 billion — more than the state budgets of Alaska, Delaware, Idaho, Iowa, Maine, Montana, Nebraska, New Hampshire and Wyoming combined.  

The release marks Adams’ first foray as mayor in negotiating his own budget, a months-long endeavor that mainly involves the New York City City Council, culminating with a final budget — and ceremonial handshake with the Council speaker — that comes out July 1st, the start of the city’s fiscal year. 

The goal for  both sides is to determine what resources will be allocated to manage and deliver government programs and services across the five boroughs. The budget is a reflection of a city’s priorities and includes funding for salaries and services as well as afterschool programs, rental assistance, Cure Violence initiatives, and a whole lot more. 

Politics, of course, drives much of the discourse, and while much of the budget is not controversial, a few issues usually dominate any disputes between mayor and Council.

“I realized the power of using the purse to promote good public policy,” said Daniel Dromm, a former Councilmember and chair of the Council’s finance committee. “In the year when we had the ‘COVID budget,’ 2021 budget, one of the things we were proudest of is we didn’t give a cut to any immigrant organization in their funding because we knew they were the most vulnerable.” 

The size of Adams’ budget is unclear, but if his recent statements are any indication New Yorkers are poised to see a leaner spending plan. Adams has ordered across-the-board agency cuts, with possible exceptions to the NYPD given fears of increased crime, and the NYC Health + Hospitals and health department as the pandemic remains omnipresent. 

So what can New Yorkers expect during the preliminary budget process? Here’s a look at each stage during the first half of the process, with help from interviews, the New York City Charter, and the Independent Budget Office (IBO) guidebook on the budget process.

When does the budget start and end?

The Fiscal Year of a New York City budget begins on July 1st and ends June 30th the following year.

What makes up the budget? 

The budget is composed of various projected revenue streams generated through fines; business, corporate and real estate taxes; private multi-million dollar grants; and funds from the state and federal government. In some ways, the budget is a forecast; an educated guess on what actual monies are expected to come in during the Fiscal Year. 

Those pools of money become the revenue sources that power the operating and capital budgets. Monies in the expense budget are divided up among agencies, with the education department receiving about a third of the expense budget, according to the IBO. Those monies fund salaries, pensions, health insurance, office supplies, and service contracts with community groups, among the thousands of line items in the plan.

Funds in the capital budget go towards infrastructure projects. These can be as simple as a new playground to a multi-million dollar sewer project that takes years to complete. 

The budget must also, by law, be balanced, meaning the amount of money coming in has to cover the city’s expenses. 

What happens first? 

The mayor typically announces the preliminary budget in January. Think of it as the first draft, which is prepared by the Office of Management and Budget (OMB). Its director is a mayoral appointee and is often the budget’s architect. 

In the lead-up to the budget’s release, the mayor carries out several obligations, mainly a personal plea to the state Legislature for state funding the city needs to operate. OMB directs city agencies to submit their budget breakdowns, outlining what revenues they estimate receiving during the fiscal year to keep the city operating. Those projections are tacked onto the preliminary budget, breaking down expenses and capital projects. 

Because this is Adams’ first year in office, he was given an extra month to present his preliminary budget to offer him time to settle into office, hence its delivery on February 16.

So far, Adams has outlined a few priorities, including increasing the Earned Income Tax Credit, subsidies for child care and increasing bed capacity for the mentally ill. Adams has sought to invest $75 million to the Fair Fares program, offering discounted MTA rides to low-income New Yorkers. 

The mayor is also tasked with providing an update to the four-year financial plan, outlining all expenditure forecasts for the next four years. These forecasts outline revenue sources from each agency, and when new programs will be up and running. In every odd number year, the mayor must also present his 10-year capital budget plan, outlining estimated projects and costs for big construction jobs. 

Once the mayor presents his budget, it is submitted to the five borough presidents, city comptroller, City Planning Commission, and the Council. OMB posts the budget on its website for New Yorkers to see. 

What role does the NYC Council play? 

While the mayor’s office is significantly more powerful than the Council, the budget is one of the city legislature’s biggest responsibilities — and offers the Council an opportunity to act as a check on the mayor’s agenda.  Without Council approval, money can’t flow to the countless agencies and departments the mayor controls. 

The Council is tasked with combing through every line item in the budget, determining its feasibility, with help from economists at the body’s central office. While the other city entities play a role in recommending budget allocations, the Council plays the most substantial part since it’s charged with ultimately approving the spending plan.

As this is happening, the city comptroller, the city’s chief financial watchdog, releases a report outlining the “city’s financial condition,” detailing whether the city has enough money to continue paying for things, according to the City Charter. The report also includes how much debt obligation–defined as anything the city owes to outside entities –will be incurred for any pending capital projects over the next four years. 

The Independent Budget Office also weighs in, as mandated by the Charter, releasing its own analysis of the preliminary budget, determining whether certain programs are adequately funded. It also conducts its own forecast on the amount of tax revenue expected in the coming Fiscal Year. 

The borough presidents also submit their budget requests (e.g.. requests for another library) in which they’re ultimately awarded a small percentage of the capital and expense budget. The same process goes for all 59 community boards, though it’s rare these requests are directly budgeted by the mayor’s office. 

The bulk of this stage, which follows the preliminary budget, includes a series of hearings before relevant committees that have oversight over agencies. For instance, if the Council looks to examine and receive input on the city parks department budget, residents, advocates, and heads of city agencies will be invited to provide feedback. Central office assigns each committee a financial analyst to offer oversight over each agency’s budget, which Dromm said are critical to the process.

“Oftentimes the numbers don’t agree in terms of what the revenue coming in looks like, and it’s down to the wire to what is the real projected income,” Dromm said, noting that city bean counters  often have  to estimate what the state figures will look like. That’s because as the Council is figuring out how to tailor the budget, the state is also trying to figure out theirs, making it tough for the city to know just how much money it will receive. The state’s budget is determined by April 1st, ideally, meaning the city will often have to go back and tinker with its own spending plan before the July 1st deadline.   

The city comptroller is among the first called upon to testify “on the state of the city’s economy and finances.” This includes “evaluations of the city’s financial plan” detailing “the revenue and expenditure forecasts.” The Council is also carving up their piece of the budget pie, crafting their own budget it needs to submit to the mayor. 

Odd year only: Review of ten-year capital plan. 

New York City is constantly  building and changing, and that can be costly. So to give the Council a summary of what’s coming down the pike over the next ten years, the City Planning Commission offers feedback on the plan in the form of testimony. This year, the mayor doesn’t really have to worry about that. 

The testimony is submitted to the Council. 

What role can I play? 

The budget is ultimately in service to and funded by New Yorkers, and any resident can offer feedback. Suppose you find there aren’t enough city-sponsored summer job slots in your neighborhood: You can take those concerns to a joint Council hearing between the Committee on Youth Services and Finance Committee. 

Residents can sign up to testify for two minutes, offering their takes on the matter. Those comments will be placed on the record. Everyone is welcome to testify. (And as is always the case, residents can lobby their local Council member.)

The hearings are over? What does the Council do with the information? 

Usually around late March, the Council prepares its preliminary budget, outlining its priorities and questions raised during initial committee hearings. 

What lies ahead? 

The second half of the budget process will involve the release of the Executive Budget, a more detailed listing of what the city is expected to spend and take in. It’s followed by another round of hearings, followed by the proverbial “budget dance” in which the speaker, the finance chair, the Council budget negotiation team, OMB, and the mayor weigh in and hash out any remaining differences. 

In the next few weeks, we’ll revisit the budget process to cover the latter half of this detailed process. Stay tuned! 

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