Comptroller warns city to steer clear of 'fiscal cliff'

The city’s looming budget crisis isn’t due to just increased spending associated with the migrant crisis – it’s also because of a growing number of unfunded city programs, State Comptroller Thomas DiNapoli wrote in a recent op-ed.

In the op-ed, which was co-authored by Andrew Rein, president of the Citizens Budget Commission, he and DiNapoli note that the city’s budget gap could grow to $9.9 billion – and as much as $13.8 billion – next year. Although 42 percent of the budget gap in Fiscal Year 2025 is related to the expense of helping asylum-seekers, much of the gap stems from a growing number of programs. City-funded spending has ballooned by more than 50 percent over the last 10 years, DiNapoli noted, with programs such as 3K expanding in recent years.

“The major underlying cause of the budget gap comes from years of added and expanded city programs that — at best — were supported only for a short time by non-recurring revenue or — at worst — not funded at all,” the comptroller and Rein wrote last week. “Despite the urging of our offices, few efforts have focused on increasing efficiency or shrinking lower impact programs, which could have allowed ongoing revenue to be sufficient to avoid future cuts.”

The city is facing a mandate to reduce class sizes in city public schools, which the Independent Budget Office has estimated will cost between $1.6 billion and $1.9 billion annually.

DiNapoli and Rein also attributed the gap to growing personnel costs, including the costs of the city’s labor agreements with District Council 37, the Police Benevolent Association and other unions.

“The city and its unions agreed to reasonable raises for city workers, but did not identify how the $16 billion they added to the budget will be funded,” the authors noted.

Overtime spending was also a factor for the budget gap: in Fiscal Year 2023, the NYPD alone spent $871.2 million on overtime, according to the Mayor’s Management Report.

DiNapoli and Rein praised the programs to eliminate the gap implemented by the Adams administration, in which city agencies must reduce spending by 5 percent as part of the November budget plan and must also slash another 5 percent as part of January’s preliminary budget and an additional 5 percent by April’s executive budget deadline. The city has also enacted a hiring freeze, although positions that support public health, public safety and revenue generation have been exempted. But they cautioned that the cuts would be “futile” if the city continued to add to its spending, and called for the city to end programs that were meant to be temporary.

“This is not easy, and must be done right to minimize impact on critical services,” they wrote.

The comptroller and Rein also called for the city headcount to be “managed smartly.” 

“Certain areas need more staff to get the job done. Less discussed have been the operations that have sustained staffing losses but are, or can be, managed well with leaner teams,” they wrote. “The mayor’s office should take a hard look at staffing and performance, and make nuanced decisions to ensure city government can function well.”

Robert Croghan, chairperson of the Organization of Staff Analysts, believed the city was at a point where the fiscal crisis “could become real, but it may not,” particularly if the city receives increased federal funding to aid asylum-seekers. 

He noted that the city wasn’t seeking to cut back on law enforcement, which was “probably among the most expensive areas – and I’m not saying they should – but it makes me wonder how seriously they’re interested in making cuts,” Croghan said.

But he raised concerns about whether the city could manage to maintain services amid the cuts and staffing shortages.

“We’re all in favor of efficiency, doing more with less. But there’s extreme dangers that they won’t be maintained at all – look at the welfare areas, food stamps [processing times] have already been seriously impacted,” Croghan told The Chief.

We depend on the support of readers like you to help keep our publication strong and independent. Join us.