NYC 2019 Budget Grows Pre-K, Housing Efforts Amid Threat Of Cuts

NEW YORK CITY HALL — Mayor Bill de Blasio's 2019 budget plan adds $1.2 billion in spending to support signature social programs without growing the city's rainy-day fund, despite fiscal threats from the state and federal governments.

The $88.6 billion preliminary budget unveiled Thursday makes what de Blasio called "strategic investments" to expand his universal preschool, affordable housing and other initiatives even as the city could take a $1.5 billion hit from Albany and Washington, the mayor said.

That hit includes cuts to federal funding for the city's public hospitals, along with other policy changes in Washington, that could trim the city's revenues by $700 million in the next year, de Blasio said. Things could get worse if the Republican leaders in Congress follow through on their threats to cut Medicare, Medicaid and Social Security, he said.

The city may also take a $750 million hit from Albany, the mayor said, as Gov. Andrew Cuomo has proposed cutting funding or shifting responsibility to the city for several programs that could cost City Hall $400 million.

If approved as presented Thursday, the first budget of de Blasio's second term would reflect a 27.1 percent increase in spending from the 2014 fiscal year, when the city spent about $69.7 billion. The Democratic mayor cast the plan as judicious, saying it takes incremental steps toward his progressive goal of making New York City fairer while anticipating external threats to its coffers.

"We believe this is the best budget to protect the strength of this city, the economic growth of this city and the needs of our people," de Blasio said Thursday in a news conference at City Hall. "At the same time, we're keeping a watchful eye on the risks that are coming our way up I-95 and down the New York State Thruway."

Gov. Andrew Cuomo's administration objects to the city's claim of threats from Albany. The governor's proposed budget would send $16.5 billion in state aid to the city, a $500 million increase from last year, Morris Peters, a spokesman for the state Division of the Budget, said in a statement.

"The state’s budget includes a $248 million increase in school aid, $212 million more for the state takeover of Medicaid, and $60 million in additional tax revenue – calling this significant increase a cut is disingenuous and the City should check its math," Peters said.

The mayor's budget would add more than 3,100 seats to his "3K for All" program offering free preschool for every 3-year-old. The program would start in four new school districts in each of the next two school years, doubling the rate of expansion, he said.

De Blasio wants to add more than $14 million in spending on affordable housing proposals, including a program to turn illegal basement apartments legal. That initiative will start in February with a pilot program in East New York and could eventually touch 5,000 apartments across the city, de Blasio said.

Another $11 million slate of proposals to expand services for incarcerated people could take 159 people out of the city's average daily jail population, de Blasio said.

The budget hikes spending on homeless shelters by $150 million, which de Blasio said reflects the expense of his plan to open 90 new homeless shelters across the city while moving homeless people out of hotels and dangerous so-called cluster shelters.

The new spending is partially offset by $900 million in savings from a hiring freeze and plans from city agencies to economize, city officials said. De Blasio wants to add another $500 million in savings by the time he submits a final executive budget in April.

Officials predict the 2019 and 2020 budgets will be balanced, with "manageable" deficits projected into 2022, said Melanie Hartzog, de Blasio's budget director.

But absent from this year's preliminary proposal is new funding for the city's reserves, which the city plans to keep at $1.25 billion, Hartzog said.

"We're not doing any big, new programmatic things, and anything we do is going to be paid for by savings, but it's not the time yet to be able to comfortably devote more resources to reserves," de Blasio said.

"I'm not ruling out adding, but we don't have a plan to right now," he added.

Senior City Council members questioned the wisdom of letting the reserves be. Deeper cuts from Washington and Albany could threaten the city's "vital social safety net programs," making a larger nest egg all the more important, Speaker Corey Johnson said in a statement.

"Safeguarding our critical city-funded programs against looming federal and state cuts requires us to take a serious look at dramatically expanding reserves for the all but certain rainy day ahead and that means identifying savings and strengthening citywide reserves," Councilman Daniel Dromm (D-Queens), the Finance Committee chairman, said in a statement.

De Blasio did not discuss the potential impact of Gov. Andrew Cuomo's proposed changes to how the Metropolitan Transportation Authority's capital budget is funded, which could shoulder the city with billions of dollars. He said he's not open to the city giving any more money to the beleaguered agency, which the state controls.

"We’re putting all the money in and we have never had the dominant say over the use of our own money," de Blasio said.

De Blasio must present his final executive budget proposal by April 26. The City Council must approve a version of the budget by June 5.

(Lead image: Mayor Bill de Blasio addresses reporters in City Hall in November 2017. Photo by Edwin J. Torres/Mayoral Photography Office)