New York Mayor Bill de Blasio intends to offer a record $84.7 billion spending plan as he seeks re-election, proposing record spending as the most populous U.S. city enjoys its eighth-consecutive year of economic growth.
The budget for fiscal 2018, which begins July 1, provides for more than $1 billion in new spending, sweeping aside for the moment the mayor’s concern that federal aid could be cut due to Donald Trump’s election as president and Republicans’ control of Congress. The U.S. government accounts for more than 10 percent of the city’s annual spending.
For the mayor, a Democrat who is already campaigning for a second term in a citywide election in November, the budget is his fourth since assuming office in 2014, and it’s 14.6 percent higher than the $73.9 billion spending plan the city enacted in May that year.
The city’s diverse and large economy makes it uniquely able among U.S. large cities to create jobs and generate tax revenue, Moody’s Investors Service said in a report Monday. One measure of its robustness, the $1 trillion value of its real estate, exceeds that of Los Angeles, Chicago and San Diego combined, and allows the city to reap about $24 billion in property taxes this year, the report said.
“New York City’s vibrant and diverse economy attracts top employers and a highly educated workforce that makes it the global leader in finance, media, technology and medicine,” said Moody’s, which rates the city’s credit at Aa2 with a stable outlook. “Still, while moderate relative to other cities, fixed costs for debt service, pensions and retiree health care are increasing and healthy economic growth is needed to keep them affordable.”
The budget, which must be passed by the City Council before the June 30 end of this fiscal year, would pay for already approved additions in police personnel and programs developed in the past year to address increased homelessness and failures in the city’s Administration for Children Services, which have included incidents of fatal child abuse and neglect in families under agency supervision.
New initiatives include a plan to spend $1 billion for 700 new roofs in public housing, and for 300 additional part-time school crossing guards and supervisors, said Freddi Goldstein, an administration spokeswoman.
The Trump administration’s support for repealing the health insurance program enacted under former President Barack Obama is a top concern for de Blasio, who has estimated that it could cost the city’s cash-strapped public hospitals $2 billion, enough to cripple the system.
The cost of providing 24-hour police protection to secure Trump Tower, the president’s midtown Manhattan residence and business headquarters, has exceeded $35 million since the Nov. 8 election — expenses for which the mayor has not obtained any assurance of full federal reimbursement.
While the city remains a global financial center, the securities industry has lost some economic clout, Moody’s reported. It now accounts for 19 percent of all city wages compared to its 2007 peak of more than 25 percent. Yet, even the decline has a silver-lining, the company said, because other industries such as technology, education, tourism and health care have been adding jobs at a faster rate, and will be sources of employment growth in future years.
(c) 2017, Bloomberg · Henry Goldman