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In his first budget, Adams unveils ‘radically practical’ $98.5B spending plan

Mayor Eric Adams on Wednesday proposed his first spending plan for New York City, a $98.5 billion preliminary budget that he said tracks with his political vision of prioritizing public safety, government efficiency while also directing more assistance for the poor — including a dramatic expansion of the city’s summer youth jobs program.

The latest proposal — while subject to change following a months-long negotiation process with the Council — falls under this year’s $102.8 billion budget approved and expanded under Mayor Bill de Blasio. The former mayor last year initially unveiled a $92.3 billion preliminary budget, only to significantly increase the size after the city received a windfall of federal stimulus funding.

Bolstered by better than expected tax revenues, the mayor was able to set aside more than $1 billion in reserves, bringing the fund to $6 billion, the highest level in the city’s history.

“We will make decisions that invest in our city and benefit all New Yorkers,” Adams said during his budget presentation. Promising that fiscal discipline will a “hallmark” of his administration, he added: “As I have said before, we will be radically practical.”

But according to an analysis of the preliminary budget by the Citizens Budget Commission (CBC) — a fiscal watchdog group that takes into account future expenses that the mayor did not include — Adams is in fact proposing to increase city spending by 2.3%.

Andrew Rein, president of the CBC, called the plan “a victory for fiscal integrity,” but warned of “looming fiscal cliffs” that will occur once federal stimulus dollars that are in the current budget dry up.

During a virtual address at City Hall, Adams framed his plan around his central campaign promise of improving public safety. Nevertheless, he indicated that the city’s NYPD budget, which is around $6 billion (excluding pension and fringe benefits), would remain relatively flat or decline somewhat next year.

Asked how he planned to combat rising crime and gun violence following the virtual presentation, the mayor explained that he wanted to use existing NYPD resources more efficiently.

“You can’t have hundreds of police officers doing clerical duties,” Adams told reporters. “We’re going to redeploy our manpower.”

Under his plan to combat violence, Adams has said the city would direct more officers to the subways and create a new anti-gun unit that would be dressed in plainclothes but have their police identification like name and rank clearly displayed on their garments.

Adams is seeking to shrink education spending. The Department of Education is slated to receive $30.7 billion in the mayor’s budget next year, a decrease of $964.7 million from this year’s budget. Driving these reductions are budget cuts ordered by Adams, and reductions in federal stimulus funds awarded during the current fiscal year. But it is possible the remaining funds could be rolled over into the next fiscal year.

The budget also funds social priorities, including youth jobs, childcare, home healthcare visits in neighborhoods hardest hit by the pandemic. In the most significant social policy proposal, Adams is seeking to increase city and state funding for the Earned Income Tax Credit program, a federal initiative that awards a subsidy to working low-income New Yorkers and one he pledged to boost during his campaign.

New York City has not raised its rate of contribution in two decades, even though policy experts widely credit the program for keeping money directly in the pockets of low-income working families.

The mayor has called for raising the city’s contribution from around $100 million to $350 million, and asked the state to kick in another $250 million.

“This will help low- to moderate-income families put food on the table and keep a roof over their heads,” the mayor said Wednesday. “But we need help from our partners in Albany to get this done.”

The mayor has linked public safety to social interventions, which refers to as “upstream solutions.” Towards that end, he is proposing to expand the city’s summer youth employment program, growing the number of jobs from 30,000 to 100,000 at a cost of $236 million. That announcement came Tuesday during a press conference where Adams was joined by a host of city officials, including the City Council Speaker Adrienne Adams.

In a joint statement with finance committee chair and Councilmember Justin Brannan, the speaker called the preliminary budget “promising.”

“We as leaders have a responsibility to ensure that our Fiscal Year 2023 budget advances equity, fiscal responsibility, and a strong recovery for New York City,” read their statement.

James Parrott, an economist at the New School’s Center for New York City Affairs, praised some of the spending initiatives proposed by the mayor, such as the youth jobs program, but he also expressed concern about the city’s projection that employment would not reach pre-pandemic levels until 2025.

“That reflects a really alarming economic situation,” he said.

Parrott has argued that the city needs to make greater investments in job training programs. “The economy has been transformed by the pandemic,” he said. Workers’ attitudes around work have changed. People are open to upgrading their skills to qualify for better paying jobs.”

The mayor has increasingly urged workers to return to the office, saying that they are part of a larger economic ecosystem that COVID has disrupted.

He said he spoke to business leaders on Wednesday, urging them to call their employees back. “It’s time,” he said. “I think we have to be very clear so that people understand that if you’re an accountant and you stay at home, it impacts our local diner, a local restaurant.“

“We are connected,” he added. “New York City can’t run from home.”

Adams’ presentation is only the beginning of what is expected to be a roughly five-month long process. The preliminary budget is only a first draft that incorporates funding requests to the state. In May, after the state budget is determined, the mayor will deliver a more detailed executive budget. The final version is then hashed out with the City Council before the city’s new fiscal year, which starts on July 1st.

Since taking office, the mayor has modeled himself as a fiscal hawk, and on Wednesday he touted his preliminary budget as achieving nearly $2 billion in savings. He has also said he wants to streamline the city’s workforce of more than 337,000 employees. So far, he has accomplished that without layoffs — by eliminating vacant positions, the city’s headcount is expected to drop by 3,200 in fiscal year 2022 and 7,000 in 2023. As part of the budget process, most city agency heads were asked to identify 3% in cuts in both years as long as they did not involve layoffs.

The mayor extolled the anticipated $6 billion in reserves – often used for unexpected events such as a recession – as a sign of his fiscal prudence. But the size of the savings will no doubt play a role in the city’s upcoming negotiations with labor unions, some of whom were his key supporters.

Among the labor unions whose contract is set to expire later this year is the United Federation of Teachers union, which did not endorse Adams in the Democratic primary.

“With a record $6 billion in reserves, it is impossible for the city to use poverty as an excuse to avoid investing in our children,” said Michael Mulgrew, the head of the UFT, in a statement. “The good budget news gives the Adams administration a unique opportunity to improve services to students, from building new career pathways to lowering class size.”

Sophia Chang contributed reporting.

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