City Hall is using a billion-dollar gimmick to obscure the true depths of the Big Apple’s budget crisis, a fiscal watchdog group argues in a new analysis.
Mayor de Blasio’s budget depends on scoring $1 billion in recurring savings from the city’s labor unions — though he has not yet achieved those concessions or presented a plan in public that would hit the goal, the Citizens Budget Commission said.
“I look at this as a fake part of the budget. This $1 billion in labor savings is a fiction until they come up with a plan,” said Andrew Rein, the head of the CBC.
“Fictional savings in the budget is masking the depth of the problem.”
Hizzoner needs the $1 billion in savings not only to keep his $92.3 billion budget for 2022 in the black, but his administration is banking on the savings to help check the Big Apple’s massive deficits over the following years, according to the CBC’s analysis.
Without the labor cuts, City Hall’s deficit in 2023 grows to $5.3 billion, the CBC found. That’s up from the currently projected $4.3 billion. The pattern repeats for 2024 and 2025 as the budget gaps could easily exceed $5 billion, according to the analysis.
Budget watchdogs like Rein have pushed de Blasio to tackle the city’s payrolls as the the Big Apple’s financial situation deteriorated amid the coronavirus pandemic and efforts to score federal aid stalled for months in Washington.
Instead, City Hall struck a series of agreements with municipal unions that simply deferred $722 million in labor costs from the 2021 budget to 2022, in exchange for short-term guarantees to avoid layoffs.
New York’s mounting fiscal woes are caused in large part by the massive declines in property tax revenues, typically generated from skyscrapers, as offices across the city emptied following the outbreak of the pandemic.
That tax base is usually the city’s most stable — but receipts are expected to plummet by $2.5 billion in 2022 alone and it is unclear when they will recover.
That blow was partially offset this year by an unexpected $1 billion in city income tax revenues.
“In the face of declining tax revenues and billions in unplanned spending to fight the pandemic, we balanced the budget, remained focused on saving taxpayer dollars, and reduced the City’s payroll without laying off a single employee,” said City Hall spokesman Mitch Schwartz, in a statement.
“All the while, we’re expanding our vaccination efforts and proving that we’re going to rebuild this city with a recovery for all of us.”