New York State Comptroller Thomas P. DiNapoli issued the following statement regarding the agreement announced today on New York City’s adopted budget.
"The adopted budget agreement between the New York City Council and Mayor Adams shows the city has taken advantage of an end-of-year revenue windfall of nearly $3 billion by building up reserves and funding a number of the council’s spending priorities. The city still faces many risks and setting aside funds now is wise and should allow it to withstand some economic uncertainties and rising costs.
“The agreement will raise total spending for the city to $101 billion in fiscal year (FY) 2023, excluding the benefit of prepayments of expenses in FY 2022, which brings total spending to at least $106 billion. The budget funds a number of initiatives laid out earlier this year on public and mental health, childcare subsidies, employment, safety, housing programs, public spaces, human service contracts, and cultural institutions.
“The revenue windfall since April will permit the city to reach a record level of $8.3 billion in reserves and other fungible resources (including the Retiree Health Benefits Trust) as of the close of FY 2022. These unanticipated resources were used to increase a planned deposit to its recently established Rainy Day Fund (by $750 million since April, which will increase the balance to nearly $2 billion); the balance held in the RHBT (by $750 million, to $4.5 billion); and the city’s general reserve ($500 million, raising the total to $1.6 billion). The total amount in reserves of nearly $4 billion, when combined with the $4.5 billion set aside in the RHBT, would represent about 8% of projected total spending in FY 2023.
“Spending increases since April 2022 include funding for new programs, some of which are funded only in FY 2023. Spending in FY 2023 will also include a property tax rebate, the first in over a decade. In addition to these programs, the city enhanced its labor reserve since April for the potential cost of wage increases in the next round of bargaining by approximately $3 billion over the plan period, a prudent decision given potential unanticipated costs amid an environment of mostly expired contracts and stubbornly high inflation.
“The city should consider how it funds reserves on an ongoing basis, so it continues to set aside funds in good times in preparation for more difficult years. My office will release a review of the FY 2023 adopted budget and the accompanying financial plan in the coming weeks.”