Comptroller Stringer Presents Analysis Of New York City’s Preliminary FY 2017 Budget

(New York, NY) – On Wednesday, New York City Comptroller Scott M. Stringer presented his analysis of New York City’s Preliminary Fiscal Year 2017 Budget, which highlighted why the City’s continued recovery from the Great Recession hasn’t reached all New Yorkers and the steps it must take to prepare for future economic challenges.

“New York City has seen a slow, but steady economic recovery from the Great Recession,” said New York City Comptroller Scott M. Stringer. “While the recovery has benefited the City and its budget, not all New Yorkers have shared equally in those gains. With a more uncertain economic future, the Administration must ensure its financial footing is stable so that it can respond to growing challenges like homelessness, affordable housing and stagnating wages to give every New Yorker a fair and fighting chance to make it in this City.

The analysis examined the state of the City’s economy and the Comptroller’s independent review of the budget Preliminary FY 2017 budget:

State of New York City’s Economy

Job Creation and Wage Growth

• Since 2009 through 2014, the private-sector in New York City has created 525,000 jobs.
• Over the last six years, the fastest-growing job “super-sector” was retail (30% growth), followed by Technology, Advertising, Media, and Information (TAMI) (23% growth), “Eds & Meds” (20% growth), business (10% growth), and industrial (3% growth).
• While real wages for high earners have grown by more than 10 percent from 2009 to 2014, wages for low-income workers dropped by over 3 percent.
• Across the five boroughs, from 2009 to 2015, real wages have fallen in every other borough but Manhattan.
• Over that same time period, unemployment has gone down in every borough, with the largest decrease in the Bronx (-4.2%), followed by Brooklyn (-4.0%), Manhattan (-3.6%), Queens (-3.3%) and Staten Island (-2.4%).

“More New Yorkers are working than ever, but we haven’t experienced the same success in the growth of our paychecks. Wage stagnation for workers in low-wage industries means that these New Yorkers are making less, relative to inflation, than they were five years previous. Raising the minimum wage is one of the most important steps we can take to help reverse this trend and give everyone a fair and fighting chance,” Comptroller Stringer said.

New York City’s FY17 Preliminary Budget

Risks and Offsets

• For the first time in at least two years, the Comptroller’s analysis found outyear budget gaps to be increasing compared to the Administration’s estimates. Total gaps are forecast to be $2.7 billion in FY 2018 and $3.8 billion in both FY 2019 and FY 2020. By the end of the five-year financial plan, the Comptroller’s office estimates budget gaps will be $1 billion larger than the City’s.
• The Comptroller’s higher estimated budget gaps were driven in part by removing $731 million in potential revenue for taxi medallion sales that will likely not occur, anticipating higher overtime costs of about $200 million annually and projecting higher expenditures in support of Health + Hospitals and homeless shelters along with lower DOE Medicaid reimbursements over the course of the five-year financial plan.

Creating a Strong Budgetary Cushion and finding Efficiencies

• With economic uncertainty on the horizon, the Mayor’s budgetary plan should be preparing for a potential downturn. Using a measure of resources available for current and future budget relief developed by the Comptroller’s office known as Prior-Year Accumulated Resources and Reserves (PARR), at the start of FY 2016 the City remained between $1 to $6 billion below the recommended range of 12 and 18 percent of the adjusted operating budget.

Funding for Homeless Services

In a first-of-its-kind analysis, the Comptroller’s Office extracted expenditure data from the budgets of the Department of Homeless Services, Human Resources Administration, and Department of Youth and Community Development to reveal a more complete picture of the City’s spending on homelessness. Findings include:

• In FY 2014, the City spent $1.175 billion on homelessness. By FY 2016, that amount is budgeted to be $1.715 billion, an increase of 46 percent.
• Between FY 2014 and FY 2016, spending on prevention, diversion, anti-eviction, and after-care programs is projected to increase 216 percent to $259 million.

Addressing NYCHA’s Pressing Budget Needs

• NYCHA faces $17 billion in capital needs to address leaky roofs, mold, and other major building repairs.
• Beginning in 2014, the Comptroller has called for directing $400 million in excess funds over the next ten years from the Battery Park City Authority to NYCHA, a policy that has the support of Governor Andrew Cuomo but needs the vote of Mayor Bill de Blasio to be implemented.

“With large outyear budget gaps and an uncertain economic forecast, we need action today to start closing those gaps to ensure that vital services aren’t cut when the next crisis hits. Measured, careful management of our finances will ensure that we can continue to implement initiatives that invest in our citizens,” said Comptroller Stringer.

To view the complete presentation, please click here.

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