Adams will release its preliminary budget. Here’s what happens next.


Mayor Eric Adams is expected to release his first preliminary budget on Wednesday, outlining where he plans to allocate funds to meet his policy priorities and keep the city running.

Former Mayor Bill de Blasio’s current budget is $106 billion — more than the federal budgets of Alaska, Delaware, Idaho, Iowa, Maine, Montana, Nebraska, New Hampshire, and Wyoming combined.

The release marks Adams’ first foray as mayor in negotiating his own budget, a months-long endeavor involving mostly the New York City Council, culminating in a final budget –– and a ceremonial handshake with the council speaker — to be approved on May 1. coming out in July. Beginning of the municipal budget year.

The goal for both sides is to determine what resources will be dedicated to the management and delivery of government programs and services in the five districts. The budget reflects a city’s priorities and includes funding for salaries and services, as well as after-school programs, rent subsidies, anti-violence initiatives, and more.

Politics, of course, drives much of the discourse, and while much of the budget is non-contentious, some disputes between the mayor and council tend to dominate.

“I saw the power of using the purse to promote good public policy,” said Daniel Dromm, a former councilor and chair of the council’s finance committee. “The year we had the ‘COVID budget’, Budget 2021, one of the things we were most proud of was that we didn’t cut any immigrant organization’s funding because we knew they were the most vulnerable .”

Adams’ budget size is unclear, but if his recent statements are any indication, New Yorkers are poised to see a slimmer spending plan. Adams has ordered across-the-board cuts to the agency, with possible exemptions for the NYPD over fears of rising crime, and for NYC Health + Hospitals and the Department of Health as the pandemic remains pervasive.

So what can New Yorkers expect during the preliminary budget process? Here’s a look at each stage during the first half of the process, using interviews, the New York City Charter, and the Independent Budget Office’s (IBO) Guide to the Budget Process.

When does the budget start and end?

The fiscal year of a New York budget begins July 1 and ends June 30 of the following year.

What is the budget?

The budget is made up of various forecast revenue streams generated by fines; trade, corporate and property taxes; millions of dollars in private grants; and state and federal funds. In a way, the budget is a forecast; an educated guess as to what actual funds are expected during the financial year.

These pools of money become revenue streams that drive operating and capital budgets. The spending budget funds are divided among the sponsors, with the education department receiving about a third of the spending budget, according to the IBO. These funds fund salaries, pensions, health insurance, office supplies and service contracts with community groups, among the thousands of line items in the plan.

Funds from the investment budget flow into infrastructure projects. These can be as simple as a new playground for a multi-million dollar sewage project that takes years to complete.

In addition, the budget must be balanced by law, which means that the income must cover the city’s expenses.

What happens first?

The mayor usually announces the preliminary budget in January. Consider it the first draft being prepared by the Office of Management and Budget (OMB). Its director is a mayoral appointee and often the architect of the budget.

Leading up to the budget release, the mayor fulfills several obligations, primarily a personal plea to the state legislature for the state funding the city needs to operate. OMB instructs city authorities to submit their budget breakdowns and how they receive revenue during the fiscal year to keep the city running. These projections are pinned to the preliminary budget, with a breakdown of spending and capital projects.

As this is Adams’ first year in office, he was given an extra month to present his preliminary budget to give him time to settle into office, hence his February 16 surrender.

So far, Adams has outlined some priorities, including increasing the Earned Income Tax Credit, subsidies for childcare and increasing bed capacity for the mentally ill. Adams has sought to invest $75 million in the Fair Fares program, which offers discounted MTA rides to low-income New Yorkers.

The mayor is also tasked with updating the four-year financial plan and outlining all spending projections for the next four years. These forecasts describe each agency’s revenue streams and when new programs will be launched and run. Every odd-numbered year, the mayor is also required to submit his 10-year capital budget plan, which outlines estimated projects and costs for major civil works.

Once the mayor has presented his budget, it is presented to the five district presidents, the city controller, the city planning commission and the council. OMB posts the budget on its website for New Yorkers to see.

What role does the NYC Council play?

While the mayor’s office is vastly more powerful than the council, the budget is one of the city’s legislature’s biggest responsibilities – and affords the council the ability to act as scrutiny of the mayor’s agenda. Without the approval of the council, no money can flow to the countless offices and offices that the mayor controls.

The council is tasked with combing through each budget item and determining its feasibility, with the help of economists at the body’s headquarters. While the other city entities play a role in recommending budget allocations, the council plays the most important role as it is tasked with ultimately approving the spending plan.

As this happens, the City Comptroller, the city’s chief financial watchdog, releases a report outlining the “city’s financial condition,” detailing whether the city has enough money to continue paying for things under the city charter. The report also includes how much debt obligation — defined as everything the city owes to outside entities — will accrue over the next four years for upcoming capital projects.

The Independent Budget Office also weighs, as required by the charter, and publishes its own analysis of the preliminary budget to determine whether specific programs are adequately funded. It also makes its own forecast of the amount of expected tax revenue in the coming fiscal year.

The district presidents also make their budget proposals (e.g., requests for an additional library), in which they are ultimately awarded a small percentage of the capital and expenditure budget. The same process applies to all 59 community committees, although it is rare for these requests to be budgeted directly by the mayor’s office.

Most of this phase, which follows the provisional budget, involves a series of hearings before the relevant committees that oversee the agencies. For example, if the council wishes to review and receive input from the city parks department’s budget, residents, advocates and city officials are invited to provide feedback. Headquarters assigns a financial analyst to each committee, who provides oversight of each agency’s budget, which Dromm says is critical to the process.

“Often the numbers don’t match what the revenue looks like, and it comes down to actual projected income,” Dromm said, noting that city bean counters often have to estimate what state numbers will look like. Because while the council is figuring out how to tailor the budget, the state is also trying to figure out its own, making it difficult for the city to know exactly how much money it will receive. The state budget is ideally set by April 1, which means the city often has to tinker with its own spending plan before the July 1 deadline.

The City Comptroller is among the first to be asked to testify “on the state of the city’s economy and finances.” These include “Evaluations of the City’s Financial Plan,” which detail “the revenue and expenditure projections.” The council also carves up its piece of the budgetary pie by creating its own budget, which it must submit to the mayor.

Odd years only: Review of the 10-year capital plan.

New York City is constantly building and changing, and it can be costly. So, to give the council an overview of what’s in store for the next ten years, the Urban Planning Commission is providing feedback on the plan in the form of testimonies. The mayor doesn’t really have to worry about that this year.

The testimony is presented to the council.

What role can I play?

The budget ultimately serves and is funded by New Yorkers, and every resident can provide feedback. Suppose you discover that there aren’t enough city-sponsored summer jobs in your neighborhood: You can bring those concerns to a joint council hearing between the Youth Services Committee and the Finance Committee.

Residents can register to testify for two minutes and give their opinion on the matter. These comments will be included in the minutes. Everyone is welcome to testify. (And as always, residents can lobby their local council member.)

The hearings are over? What does the Council do with the information?

Normally, at the end of March, the Council prepares its preliminary budget, outlining its priorities and issues raised during the committee’s first hearings.

What lies ahead?

The second half of the budget process will include the release of the executive budget, a more detailed listing of what the city expects to spend and earn. Another round of hearings follows, followed by the proverbial “budget dance”. the Speaker, Treasurer, Council Budget Negotiation Team, OMB and Mayor weigh and resolve any remaining differences.

Over the next few weeks, we’ll revisit the budget process to cover the second half of this detailed process. Stay tuned!


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