“New York City released its Fiscal Year (FY) 2023 Executive Budget today, totaling $99.7 billion, allocating funds to newly announced agency initiatives and addressing a number of risks in the budget.

"The city’s short-term finances have improved dramatically from budget adoption and still has room to improve before the end of the year.

"This improvement reflects the city’s economic resilience and savings generated mostly through staff vacancies from earlier this year, which helped the city generate a nearly $5.3 billion surplus in FY 2022. After adjusting for the surplus transfer, total budgeted spending in FY 2023 is expected to near $105 billion.

“The Executive Budget mitigates some fiscal cliffs that emerged from planned federal aid spending, continuing a trend started in the Preliminary Budget released in February. The budget funds targeted investments across a variety of service areas, including economic and workforce development, transportation, homelessness, youth development, mental health and sanitation. In all, agency expenses would grow by $2.2 billion in FY 2023, more than 40 percent of which would be recurring through the end of the financial plan period.

“While the vast majority of unanticipated revenue and spending reductions will be used to fund these efforts, the city also acknowledges potential economic disruptions, amid current inflation, and takes a step towards managing repercussions by adding a half percentage point to its labor reserve (from 0 percent) in each of the first two years of the current round of collective bargaining (which began for many civilian employees in May 2021) and depositing an additional $200 million to its rainy-day fund, bringing the anticipated total balance to $1.2 billion by the close of FY 2022.

“My office anticipates revenues will further improve by at least $750 million before the end of the year, offering another opportunity to prepare for uncertainty. The city should consider further formalizing its reserve policies to guide its actions for setting reserve levels amid an unsettled global economic picture and significant spending uncertainty in the financial plan outyears.”