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City Council’s massive budget ignores reality and inflation

Last month, Mayor Eric Adams proposed a $101 billion city budget for the fiscal year that starts in July, about 1% more than de Blasio’s final budget. Now the City Council is rewriting the document. The council’s massive proposed spending increase shows that if the mayor isn’t living fully in the reality of high inflation, the council is fully in fantasyland.

Adams’ fiscal year 2023 proposal is what passes for a fiscally conservative budget in New York City, especially with inflation running close to 8%. The mayor put out a prudent enough document, asking city agencies to save money and reduce headcount as his commissioners figure out how their departments actually work.

The council, though, wants to increase spending by another $1.3 billion.

The numbers show the council’s newfound aggression. During Mayor Bill de Blasio’s first budget season, the council $257 million in its own programs, less than half a percentage point of spending funded with tax dollars.

This council wants to add 1.8% to tax-funded spending. (City tax and fee dollars constitute about $71 billion of the city budget; the remainder comes from federal and state sources.)

The council is particularly bold when it comes to social services. It wants $800 million annually in added spending on “affordable, supportive and public housing.”

But Adams already budgeted more than $2 billion a year for such spending. Even at the height of the de Blasio era, we spent “only” about $1.5 billion annually on such projects. There’s no evidence that, without cost controls, we can wisely double that.

Same with new homeless spending. The council wants $115 million to expand “safe haven” shelters with on-site health services, as well as drop-in centers. The money would pay for 2,376 such beds, including 490 the mayor is already creating — because the number 2,376 “align[s] with the number of unsheltered homeless individuals” each night.

But it’s not as if the city has been scrimping here. Five years ago, the city spent $1.1 billion a year on homeless services. Today, excluding extraordinary COVID spending, it’s $2.2 billion.

Eric Adams
Mayor Eric Adams proposed a $101 billion city budget for the fiscal year starting in July.
ZUMAPRESS.com

Funding beds all at once for every single individual sleeping on the street or subway makes no sense until we learn how many such people will agree to stay in such shelters. “Safe haven” is still a communal shelter, which many street dwellers resist.

The council also wants $50 million to convert hotels to homeless housing. There’s no doubt that the owners of shabbier hotel properties, who can no longer get away with charging high rack rates to naïve European tourists, would love this city bailout.

Other ideas are just boondoggles: $59 million for “restorative justice coordinators” in 250 schools, as well as for “restorative justice” training.

Some stuff is small, but still, $5 million is $5 million — instead of spending it to “support communities affected by hate crimes,” why not hate crimes?

Finally, notwithstanding The Post’s exposé on the uselessness of oversight “monitors,” the council wants $12.3 million to enable the Board of Correction to do more investigations of Rikers Island.

Eric Adams
Mayor Eric Adams making a social services announcement at City Hall.
ZUMAPRESS.com

We know that Rikers Island is screwed up. Time to get real with the real impediments, including union rules, to fixes. Do give the council some credit, at least: It knows the Rikers problem isn’t a lack of money and doesn’t offer any more money for jails.

How will the council pay for all this? By conjuring money out of thin air. The council says tax revenues will be $4.4 billion higher than expected over the next 15 months (it proposes to put the balance in rainy-day funds).

Maybe taxes will come in higher, maybe not.

There’s one certainty the council all but ignores, though: The fact that unions are going to be asking for huge wage hikes to account for inflation. An 8% wage hike would cost $4 billion per year.

Noting that the city hasn’t budgeted for any raises for the next two years, the council observes that “it is unlikely that the city’s unions will settle. . . for this.”

Indeed. Until both the council and the mayor grapple realistically with inflation, the budget is a fictional document.

Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.

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