Mayor Eric Adams on Monday ordered all city officials — including the NYPD — to begin cutting spending and tightening their belts for years due to stock market losses, “increased inflation” and the potential for a devastating recession.
The blanket 3% guideline was conveyed in a somber memo from the mayor’s Office of Administration and Budget, which said Adams was “implementing a program to eliminate the gap” that would require spending cuts in fiscal 2023, which started July 1st and ends June 30th.
Adams is also calling for a 4.75% reduction in fiscal 2024, “and beyond,” OMB director Jacques Jiha wrote.
No agencies will be exempted due to “the magnitude of the threat to our financial stability,” he said.
Jiha also warned, “If PEG targets are not met, OMB will identify savings opportunities.”
Adams’ move came amid a spike in serious crime, which rose by an average of 35.3% citywide as of Sept. 4 compared to the same period last year.
In a Monday memo, first reported by Politico Pro, Jiha outlined a “partial list of challenges” facing the Big Apple.
“First, the stock market was down significantly in fiscal 2022. As a result, the city is required to offset investment losses by significantly increasing annual pension fund contributions beginning in fiscal 2024,” he wrote.
“Second, most of the city’s employment contracts have expired or [are] nearing expiry and we have started discussions with the unions.”
Jiha also cited “rising healthcare costs, high energy prices and increased inflation” as well as “mandated new needs such as housing for asylum seekers” and the loss of federal stimulus funds triggered by the COVID-19 pandemic.
“These additional costs will add billions of dollars to the gaps from the budget,” he wrote.
“To make matters worse, an economic slowdown could lead to falling tax revenues.”
Plans to meet the immediate 3% cuts are due to OMB by September 30, and Jiha said they “cannot be achieved through layoffs or new fines and charges.”
“We encourage you to find innovative and creative PEG savings opportunities,” he wrote.
“Examples of acceptable initiatives include improving productivity through restructuring, identifying areas where funding exceeds programmatic needs, and identifying new or additional grants.”
In a statement, Adams said he is committed to “public safety and fiscal discipline,” but the Big Apple faces “new costs that will add billions of dollars to the city’s obligations.”
“This program austerity plan to address the gap is a strong and decisive action that protects both the city’s financial prospects and funding for critical programs and services, promotes efficient government processes, and safeguards the city’s long-term financial stability,” he said.
A 3% cut in NYPD spending would total more than $157 million from its fiscal 2023 budget of $5.2 million.
In 2020, former Mayor Bill de Blasio and the City Council slashed the NYPD’s budget by $1 billion amid “defund the police” protests over the killing of George Floyd by Minneapolis police officers while he was being arrested for he allegedly had used a counterfeit $20 bill to buy cigarettes from a grocery store.
The Department of Education will have to cut more than $435 million from its $14.5 million budget — even as it allocates funds to meet the new class size limits.
Adams has said it will cost $500 million a year for elementary schools alone to meet the requirements of a law signed into law by Gov. Kathy Hochul last week.
The president of the independent Citizens Budget Commission, Andrew Rein, called the threatened spending cuts “a prudent and fiscally necessary move to stabilize New York City’s budget over the long term.”
“In June we called for a 3%-5% PEG and the fiscal outlook has deteriorated since then,” he said in a prepared statement.
https://nypost.com/2022/09/12/mayor-eric-adams-orders-nyc-to-cut-spending-3-over-inflation-looming-recession/ Mayor Eric Adams orders NYC to cut spending by 3% because of inflation as recession looms