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NYC’s beleaguered budget

The Big Apple has faced a number of fiscal challenges in recent years. When announcing the emergency budget cuts this past November, Mayor Adams highlighted “sunsetting COVID-19 stimulus funding” and “slowing FY24 tax revenue” as two factors behind the city’s budget deficit.

Adams also blamed an influx of asylum seekers for monopolizing city resources. Since April 2022, NYC has opened hundreds of emergency shelters and provided care for more than 170,700 asylum seekers who have entered the five boroughs seeking shelter.

NYC spent more than $1.45 billion on this asylum seeker crisis in the 2023 fiscal year (FY, which runs from July 1 to June 30), and the Adams administration projected the city would have to spend a further $11 billion on the crisis over FY24 and FY25, unless the state and federal governments stepped in with significant and timely support.

Facing dire economic circumstances, Adams implemented a citywide hiring freeze in November 2023. He also demanded that city agencies cut 5% of their spending through a Program to Eliminate the Gap (PEG).

As Bronx-born Cardi B noted in her spectacular live-streamed rant, the proposed cuts would have a huge impact on hard-working New Yorkers. While the mom-of-two likely wouldn’t feel the pain of school cuts personally — as a Grammy Award-winning musician — she says she’s still “speaking truth” for the people of her home city. For instance, she said that if you cut funding for the NYPD, “crime’s gonna go through the roof!”

As for slashing funding for the city’s sanitation department — which would have eliminated trash pickup at thousands of litter baskets — the rapper said: “New York is already super f—ing dirty. I know people from California, I know people from Atlanta [and] I’ll be like: ‘New York is the greatest place in the world’ and they’ll be like: ‘New York is dirty.’ And IT IS DIRTY and it’s going to get even dirtier with this budget cut.”

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Budget cut u-turn

Somehow, just eight weeks after announcing the aggressive budget cuts, the Adams administration managed to secure “better-than-anticipated tax revenue” and a 20% cut to city contracts for migrant services — which enabled the mayor to reverse some of his cuts and restore funding for vital services.

Thanks to what Adams has described as “responsible and effective” fiscal management, NYC has brought its projected budget gap down to $5.2 billion for FY25. Adams celebrated that success “without unduly burdening New Yorkers” but warned “we’re not out of the woods.”

Even with the surplus factored in, some city officials worry it won't be enough. NYC Comptroller Brad Lander said the city’s better-than-expected tax revenues “will not be sufficient to close the budget gaps” thanks to “increasing costs for city personnel [and] chronic under-budgeting,” among other things. However, he did stress that NYC “continues to be a place where millions want to live, work, and visit.”

That is … unless Cardi B’s rat prophecy comes true.

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About the Author

Bethan Moorcraft

Bethan Moorcraft

Reporter

Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

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