NYC Council averted

By Josephine Stratman
New York Daily News

(New York Daily News) — The New York City Council was slated to lay out a budget plan Wednesday that closes the city’s multibillion-dollar budget gap mostly by using money already in its’ pockets without imposing property tax hikes or drawing down from the city’s reserves.

Mayor Zohran Mamdani has proposed using the city’s rainy day fund and increasing the property tax rate to fill the estimated $5.4 billion budget hole. Although those proposals, in part, are applying pressure on the state to fork over more money, the plans have troubled the Council, as well as ratings agencies and budget watchdogs.

The Council’s plan, shared ahead of its release Wednesday, outlines revised estimates and efficiencies it says would balance the books without the measures Mamdani is talking about.

“We cannot in good conscience fund the city’s needs on the backs of homeowners or renters, by digging into emergency reserves, or by cutting essential programs,” Speaker Julie Menin said in a statement. “Our response offers a clear alternative to taking those steps, puts the City back on stable footing and invests directly in New Yorkers.”

Some of that money — as much as $3.5 billion — is already in the city’s pockets, according to the Council.

According to their estimates, $80 million in Department of Buildings permits and late fee has not yet been accounted for, $42 million in Port Authority revenue that’s not been included yet and $860 million has been budgeted for jobs that were not filled during the current fiscal year.

NYC Council averted

The mayor has also talked about reducing some of the over 13,000 vacant positions in city agencies.

The Council also proposed competitively bidding all Department of Education contacts and conducting an audit of that agency’s non-essential contracts, which they said could $175 million over two fiscal years, as well as making debt service adjustments and tapping the city’s “Graveyard Trust,” which collects older and harder-to-collect tax liens.

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Mamdani’s property tax proposal, which he framed as a threat if the state didn’t move on other revenue raisers, has mostly fallen flat, with the Council saying it’s not an option and other lawmakers broadly rejecting the idea.

His proposal to draw down from the city’s reserves has raised concern at three bond rating agencies which downgraded the city’s economic outlook, citing the plan to take from the city’s saving despite being in a period of relative economic stability. Mamdani has dismissed those outlook changes as “premature.”

The city’s budget process is playing out as the state, which has a good deal of influence over the city’s finances, continues to negotiates its budget. The assembly is considering a tax hike on wealthy New Yorkers, though Gov. Kathy Hochul has been resistant so such a move.

The state budget is technically due April 1, though state lawmakers have said not to expect a spending plan before Easter.