More details have emerged about the new round of budget cuts Mayor Adams announced over the weekend — with a hiring freeze, overtime reductions and the suspension of temporary city contracts appearing to be almost certain in the months ahead.
The austerity measures will include a 5% mandated reduction to all city agency budgets in the the city’s November budget modification, as well as likely 5% reductions in both January and April, which would bring the total projected cuts to 15% if those additional Programs to Eliminate the Gap, or PEGs as they’re known, are implemented.
The new mandate comes less than a week after Adams predicted the migrant crisis would “destroy” New York City and as he continues to call on President Biden and Gov. Hochul for additional relief in helping the city pay for the $12 billion the city projects it will spend on asylum seekers over the next three years.
In a Sept. 9 letter sent out to city agency heads, Adams’ budget director, Jacques Jiha laid out the city’s latest austerity plan.
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“The amount of aid we have received from the federal government and the state has been grossly inadequate and there has been no progress on a statewide or national decompression strategy,” he wrote. “The city can no longer continue to shoulder these skyrocketing costs and balance the budget without making very difficult choices.”
That letter, which was first reported by Politico and confirmed by the Daily News, notes that as of Oct. 1 the city will implement a “full hiring freeze … until further notice, with exceptions only for those critical positions that support public health, public safety, and revenue generation.”
According to Jiha, the mayor will also issue an order directing uniformed agencies — which include the NYPD, FDNY, Department of Correction and the Sanitation Department — to submit plans to reduce overtime costs.
“Each uniformed agency head will identify a deputy commissioner (or equivalent) who is responsible for compliance with keeping overtime spending targets,” Jiha wrote.
Jiha’s letter, however, does not outline specific cost reduction goals for those agencies.
Cutting police OT has been a controversial issue for years, with budget hawks demanding it be pared down and the police union saying such a measure would be highly problematic without hiring more cops.
In 2022, the NYPD’s overtime costs were the highest of any city agency, according to the city, with uniformed cops costing $670 million in OT for that fiscal year — nearly double the $354 million allocated in that year’s adopted budget.
On Monday, Police Benevolent Association President Patrick Hendry said cutting overtime now would be “impossible” under the current circumstances given what he described as a staffing shortage.
“It is going to be impossible for the NYPD to significantly reduce overtime unless it fixes its staffing crisis. We are still thousands of cops short, and we’re struggling to drive crime back to pre-2020 levels without adequate personnel,” Hendry said in a statement. “If City Hall wants to save money without jeopardizing public safety, it needs to invest in keeping experienced cops on the job.”
In addition to OT cuts, Adams is planning to mandate a halt to most out-of-town travel on the taxpayer dime, as well as freezing the use of all temporary service contracts and the renewal or extension of contracts with consultants. Jiha said in his letter that the city is also “actively working to reduce shelter and other costs by transitioning migrants out of the shelter system and humanitarian emergency response and relief centers.”
But the primary thrust of the new directive lies with the PEGs.
The cuts to November’s budget modification are set in stone, according to Jiha’s letter, and while those proposed for January and April are likely, they are not yet spelled out as requirements. Even if they are implemented, Jiha maintained in his letter that they would not fully cover the expanding costs of the migrant crisis.
“The cumulative impact of these three PEG exercises will only cover two-thirds of our projected asylum seeker costs,” he wrote.
Aside from the huge financial outlay associated with the migrant crisis, the city has other fiscal obligations putting a strain on its coffers. Those include new and more expensive labor deals hammered out during Adams’ tenure, the eventual conclusion of federal COVID relief money coming to the city and pension costs.
On top of all of that, many have argued that to address a homeless and housing crisis that’s been exacerbated by the influx of migrants, the city needs to invest more money — not less — into creating affordable housing.
For months, advocates have called on the mayor to ramp up getting people out of homeless shelters and into affordable housing as a way to relieve pressure from the city’s shelter system, which has come under increased strain due to the 110,000 migrants who’ve streamed into the city and the nearly 60,000 who remain in the city’s care.
Fiscal watchdogs like the Citizens Budget Commission praised the administration’s decision to institute the new fiscal measures on Monday, but also warned that Adams’ team should be mindful of applying those measures as “blunt instruments,” especially when it comes to the city’s housing and social services needs.
“It’s the right step. We have to start now to address this fiscal problem,” said that group’s president, Andrew Rein. “[But] there is a real risk — if all this comes to pass and the city does this with blunt instruments — that they can hurt services. The hiring freeze described in the letter, I think is too blunt. There are places where the city needs to hire now.”
With Rocco Parascandola
Adams’ expected cuts to NYC budget include overtime, out-of-state travel and temporary contracts
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