Mayor de Blasio briefs Council members on his FY17 budget (William Alatriste)

On Tuesday, the City Council will hold the first of many preliminary budget hearings on Mayor Bill de Blasio’s initial fiscal year 2017 spending plan, part of a months-long negotiation process that will end in June when the City Council and the Mayor must agree upon a budget for fiscal year 2017.

First in general terms, then agency by agency, the Council will ask de Blasio administration representatives to explain spending and programmatic choices. Council members will examine overall budgeting principles, looking at savings from prior years and money socked away in case of an economic downturn, as well as how clearly the administration is showing what money is being allocated for. Throughout the weeks of hearings, members will also push for their individual funding priorities, such as summer youth employment and efforts to fight gun violence and rape.

General Budgeting & Savings
Mayor Bill de Blasio released an $82.1 billion preliminary budget on Jan. 21, which he described as “boring” and short on “splashy new” initiatives, instead stressing fiscal responsibility and building reserves, with increased “targeted investments” to address the homelessness crisis, fund pension obligations, and reduce school overcrowding, among other priorities.

Signs of an imminent economic slowdown after years of growth and the specter of losing state aid loomed over de Blasio’s budget address, yet the preliminary budget set aside less money in savings than budgets have in previous years. The administration says they have unprecedented reserves, but watchdogs say that the “budget cushion” is not as deep as it should be.

The preliminary budget contains about $740 million in new agency spending, a relatively modest amount, including $62 million for ThriveNYC, the city’s multifaceted plan to increase access to improved mental health services and $53.7 million more on programs to address homelessness. With the City Council, de Blasio has increased the city budget significantly since taking office, largely due to the settling of many municipal labor contracts that were left expired at the end of the Bloomberg years. But, there have also been large increases in agency spending, including the addition of 2,000 new officers to the NYPD and billions more toward affordable housing development and homelessness-fighting.

The mayor’s preliminary budget did not account for the proposals in Governor Andrew Cuomo’s budget that would change the way CUNY and Medicaid are funded, which would cost the city nearly $1 billion starting in fiscal year 2017. Cuomo has since backtracked on the proposed cuts, saying they “won’t cost New York City a penny,” and that he wants to collaborate to find efficiencies and savings in the programs. There have been no signs of any conversations to that effect, though, and questions around how the city is accounting for these potential losses in state aid, and others, are sure to come up during preliminary budget hearings.

Council members, city Comptroller Scott Stringer, and the Citizen’s Budget Commission have all called on the mayor to find more recurring savings in the budget and to build up reserves to safeguard against a financial downturn.

A majority of City Council members sent a letter to Mayor de Blasio on Dec. 31 calling on the mayor to instruct all city agencies to find five percent in potential savings in their budgets. The letter, spearheaded by Council Member Dan Garodnick, was signed by 26 of the 51 Council members, including chair of the finance committee, Julissa Ferreras-Copeland. Ferreras-Copeland will be center stage for budget hearings, especially Tuesday’s kickoff where de Blasio’s budget director, Dean Fuleihan, will testify.

Though the letter did not explicitly say so, Council members were asking the mayor to institute a PEG, or Program to Eliminate the Gap, a cost-saving practice used by previous administrations that Mayor de Blasio did away with after taking office in favor of a Citywide Savings Program (CSP). A CSP encourages agency commissioners to find savings, but does not set a percentage.

Mayor de Blasio did not include a PEG in his preliminary budget, though he has since said that a PEG is something he is “seriously considering” for the executive budget and is sure to be discussed during the upcoming budget hearings. After several weeks of hearings, the Council will craft its official preliminary budget response, then de Blasio will put together his executive budget, before another round of hearings and continued negotiations leading to a June deal.

Comptroller Stringer has echoed the Council members’ call for implementing a PEG, and released an analysis of the mayor’s preliminary budget on Feb. 10 which pointed out several areas of concern amid an overall positive financial outlook for the city. Stringer has said the “budget cushion” Mayor de Blasio has allocated is not enough to adequately prepare for an economic downturn, and that the comptroller’s office expects larger budget gaps in the coming years than the mayor’s plan accounts for.

The Citizens Budget Commission (CBC) has also called for more savings, and has said the Citywide Savings Program is too small, does not include enough efficiency initiatives, and cannot sufficiently offset the costs of new initiatives or build up reserves. As the CBC points out, the planned savings in the preliminary budget amount to $1.9 billion in savings over fiscal years 2016 to 2019 - 0.6 percent of total city-funded spending.

The CBC has urged Mayor de Blasio to direct his agencies to “identify operational efficiencies that provide recurring savings” ahead of his executive budget proposal which would not only increase the budget cushion, but also make agencies run more efficiently. The mayor has indicated that he may go further than the current savings plan and will look at increasing agency savings before releasing the executive budget, due in late April or early May.

Ahead of the first preliminary budget hearing on March 1, Gotham Gazette spoke with Council members about their priorities and concerns for the upcoming FY17 budget. Securing funding to expand the city’s Summer Youth Employment Program, speaking out against the proposed funding cuts to CUNY and Medicaid, and advocating for greater savings in the budget appear to be some of the Council’s top priorities.

Council Member Ferreras-Copeland, chair of the finance committee and one of the key figures in the budget negotiations, said she aims to “use the process to ensure we are being transparent and fiscally prudent as a city, while mitigating any potential risks the State budget might pose to the city.” Ferreras-Copeland has also previously expressed that the Council is keen to evaluate how the preliminary budget addresses healthcare and pension costs, and that the Department of Education capital plan will be an important issue as many districts struggle with school overcrowding.

Last year, Ferreras-Copeland led the first budget hearing by pushing de Blasio budget reps on “units of appropriation” in the budget, meaning that she and her colleagues want to see more carefully laid-out line items in agency spending, not lump sums. That could be a source of tension again this year.

Specific Priorities
In a statement to Gotham Gazette, Ferreras-Copeland said that she will be paying “special attention to the Council’s priorities, which include the Health and Hospitals financial plan, as well as how to better support youth jobs during the summer and throughout the school year.”

Supporting youth employment is also a priority for Council Member Jumaane Williams, among others. On Feb. 24, Williams, joined by the Community Service Society and several of his colleagues, called on the city to support 100,000 summer jobs by April 1, which would require an additional $95 million in funding, and to enhance the current model of the Summer Youth Employment Program in order to better connect summer jobs to school experiences and ensure better quality programming.

According to a report released by the Community Service Society, summer youth employment reduces risky behavior and has a generally positive impact on academic, behavioral, and employment-related outcomes for children. Over 100,000 youths in New York City have applied for the Summer Youth Employment Program, yet the City has only funded 55,000 program slots.

Williams told Gotham Gazette he believes “there is a lot of push throughout the Council for [youth employment] to be one of the top priorities,” and also wants to see funding allotted to pilot a new model of the summer jobs program in a limited number of high schools, and increased funding to double year-round youth employment, an initiative that is spearheaded by Ferreras-Copeland.

Funding for summer after school programs for middle school students is another issue to watch as budget talks begin. Mayor de Blasio's preliminary budget eliminates the funding for the programs which serve about 34,000 middle school students.

Last year, de Blasio’s preliminary budget cut funding for afterschool programs, only to restore funding in the executive budget after Council members and advocates criticized the administration for eliminating the programs and pushed for the funding to be restored.

This year, Mayor de Blasio has said that while “the summer programs are a very good thing, we just don’t feel we can afford it at this point. We’ll take another look going into the executive budget.”

“But this time,” the mayor added, “we’re saying no, we’re not going to fund that. People should not assume it’s coming. They should not prepare for it.”

As chair of the Committee on Housing a Buildings (for which the preliminary budget hearing is March 3), Williams will also be looking to make sure “everything housing related is properly funded with groups that are able to help prevent displacement,” and wants to make sure “that Housing Preservation and Development and the Department of Buildings have the assistance they need, particularly technology-wise and for hiring additional staff for things like inspections.”

Preventing displacement is one of many important aspects to remedying the city’s homelessness crisis, however, regarding Mayor de Blasio’s proposed increased spending on programs to address homelessness, Comptroller Stringer says spending money more efficiently is needed.

During the comptroller’s preliminary budget analysis presentation, Stringer pointed out that the city is committing $1.7 billion on homeless services across three agencies - a 46 percent increase over two years - and said more coordination and better management must happen for the city to get the optimal return on the investment.

Council Member Ben Kallos, chair of the Committee on Government Operations, told Gotham Gazette that during the upcoming budget hearings, “the first item that folks can expect to see is following up on waste in government contracting. In my first year, I identified $4 billion in potential contract overruns.” Kallos added he looks forward to “getting to the bottom of that waste.”

Given the likelihood of an economic downturn, Kallos said he is “concerned about the city’s capital reserves,” and will be advocating to increase the amount of money put aside in the Capital Stabilization Reserve Fund, which received $500 million last year.

Regarding his goals as committee chair (the government operations preliminary budget hearing is March 14), Kallos said he’ll be looking at “outsourcing and provisionals,” and estimated there are roughly 21,000 provisional employees in the city - civil service positions that are filled non-competitively.

“We need to crack down on provisionals. That falls under the Department of Citywide Administrative Services, which I oversee,” Kallos said. Thousands of provisional employees were hired during the Bloomberg years, creating something of a city workforce crisis under de Blasio, with questions about which managerial-level city workers have to take civil service exams and make their employment fit requirements.

“I’m focusing on removing outsourcing where possible,” Kallos added, referring to the hiring of outside contractors and consultants by the city to do work that could be done by government employees.

With four election dates scheduled this year, Kallos will also “focus on making sure the Board of Election has all the funding they need…this is going to be the most expensive year for the Board of Elections.” Millions could be saved by consolidating election dates to hold the state primary on the same day as the congressional primary, which Kallos has called for in a resolution.

For Council Member Vanessa Gibson, chair of the Committee on Public Safety, top priorities include securing more support “in terms of financing and resources” for the city’s district attorneys, evaluating the needs and effectiveness of the special narcotics prosecutor in terms of handling K2 (synthetic marijuana) and opioid abuse issues in the city, increasing support for the Mayor’s Office to Combat Domestic Violence, and investing more in anti-gun violence efforts.

“I’m very supportive of anti-gun violence programs,” Gibson said, “I’m grateful the mayor has included in his budget an expansion of ShotSpotter, it’s extremely helpful to detect gunshots in our communities.” Gibson, whose committee’s preliminary budget hearing is March 8, will be looking to expand upon the “incredible investment we’ve already made of about $11-12 million” for initiatives to combat gun violence. Continuing and expanding on trauma services and victim services for those impacted by gun violence is also of importance to Gibson, as is redoubling investments the Council has made in those summer youth employment programs.

The number of reported rapes taking place in New York City has increased in recent years, and advocates and counselors who help victims of sexual assault are eager to see if Gibson and the Council will stick to its word about providing more resources to rape crisis centers.

Gibson told Gotham Gazette she thinks “increasing access for us as a Council to rape crisis centers and counseling and mental health professionals” is a necessary response to the increased number of rapes and sexual assaults. “I know the advocates have talked to us about rape crisis centers and how we need to beef up the borough-wide services because in some boroughs it’s not equal in terms of access, and that’s important for us as well.”

One area of concern for Gibson and others is the state’s proposed Medicaid and CUNY cuts. “The state support from Albany is going to probably be the thing that we’ll talk about with Dean Fuleihan,” Gibson said, referring to de Blasio’s budget chief, “the cuts are not acceptable, and we need to make sure that we do get support from Albany.”

Samar Khurshid contributed reporting.