NEW YORK (1010 WINS/WCBS 880) — Ahead of budget hearings at City Hall this week, the New York City Council released a report that says Mayor Eric Adams’ Office of Budget and Management (OMB) underestimated tax revenues for the current and upcoming fiscal years by $3.3 billion.
The new estimate applies to FY24 and FY25, with even more additional tax revenue expected in the outyears, according to the Economic & Tax Revenue Forecast produced by city council.
If correct, these projections would leave a budget surplus of $1.3 billion for the current fiscal year and $3.53 billion in FY25.
According to the report, the difference is driven by “stronger personal income, business, property, and sales taxes.”
“This means we can and should be making some different budget decisions, protecting the priorities of New Yorkers,” Speaker Adrienne Adams and Finance Chair Justin Brannan said in a statement. “From 3K to CUNY, libraries, and our cultural sector, stronger than expected tax revenues allow us to restore the blunt cuts that weren't necessary in the first place.”
The additional money could be used to restore funding to emergency services, education and libraries after a series of controversial Adams administration budget cuts last year that he attributed to migrant-related costs.
Some of these cuts to city agencies like the NYPD, FDNY, DSNY and NYC Parks were reversed earlier this year due to the city making “fiscally prudent” cuts to migrant services.
An anticipated third round of city budget cuts was suspended by Adams in late February due to revenues surpassing expectations and a 10% spending cut on migrants.
“It's vital that we continue prioritizing essential and targeted investments that promote health, safety, and opportunity for all New Yorkers,” Adrienne Adams and Brannan said.
“I wouldn’t say that happy days are here again quite just yet, but we’ve got plenty to restore all the blunt cuts that had a real disproportionate negative impact on the programs that New Yorkers rely on,” Brannan told 1010 WINS/WCBS 880.
The council estimates a 3.3% growth rate for the city’s tax revenue, surpassing the 2.2% rate the OMB predicted. But despite higher projections, the report still expects growth levels to be weaker than the previous decade.
It also warns that while employment outlooks have improved, job growth remains below pre-pandemic levels, and the lagging effects of higher interest rates are keeping economic growth below its average.
“Despite facing a perfect fiscal storm … the Adams administration was able to make the strong fiscal decisions to navigate us to prosperity,” a spokesperson for City Hall said in a statement to 1010 WINS/WCBS 880.
The statement did not acknowledge the city council’s report directly, but instead focused on “the administration’s tough but necessary fiscal management decisions” that it said were necessary to balance the budget.