Photo Courtesy of Comptroller Stringer’s Office
“Ifthe [Federal Reserve] misjudges the timing and magnitude of interest rate increases, or if other events intervene – like a trade war – the solid footing of our economy could be undermined,” Comptroller Stringer said.
By Michael V. Cusenza
In remarks delivered on Thursday before the City Council Finance Committee, City Comptroller Scott Stringer said the NYC economy “remains strong” and that Mayor Bill de Blasio’s Fiscal Year 2019 Executive Budget includes “a number of important programs” that he supports, but also repeated his call for rigorous agency savings and greater preparedness for the possibility of tougher times ahead.
Stringer cited a robust labor market and a boost from the Tax Cuts and Jobs Act and the federal budget as reasons for the city’s solid economic footing.
“But increased federal spending and ongoing tax cuts will ultimately lead to higher federal budget deficits and rising interest rates going forward. As a result, we expect economic growth to peak this year, and begin to taper off in the later years of the financial plan period,” the comptroller noted. “Depending, in part, on how well the Federal Reserve is able to manage that transition, it should be possible to avoid a recession, and we are not projecting one as of now. But if the Fed misjudges the timing and magnitude of interest rate increases, or if other events intervene – like a trade war – the solid footing of our economy could be undermined.”
Among the programs in the $89.1 billion budget that Stringer endorsed are raising Fair Student Funding up to the highest average in more than a decade and the $418 million—including $164 million in the Capital Budget—for the Subway Action Plan.
However, the comptroller said the Fair Fares program must be funded because it will “level the playing field for low-income New Yorkers.” The proposal calls for reduced fare—or half-priced MetroCards—for residents below the poverty line.
“No one should have to choose between buying a MetroCard and putting food on the table,” Strinegr added. “Affordable transportation should be a fundamental right in this city, and Fair Fares will get us a lot closer to that goal.”
In his testimony on Thursday, Stringer also proposed a four-year savings plan with a target of adding a billion dollars this year and the next to the City’s surplus in order to reach the minimum target level of the optimum budget cushion.
“As I have said repeatedly, we must demand that our agencies work harder to identify efficiency savings. This year’s Citywide Savings Program, by our reckoning, contains only 14 percent of savings that are truly efficiencies—the rest are debt service savings, funding shifts, or spending re-estimates,” the comptroller said. “We need to raise the bar for agency savings targets. Don’t get me wrong – I’m not in favor of the heavy-handed, arbitrary, and indiscriminate application of savings targets that was too often the practice in the past, regardless of the consequences. But I am in favor of giving agencies real targets for their savings efforts, in order to push them to work harder. Over the last three years, the increase in the surplus roll has gone down each year, from $1.6 billion in 2015, to just $147 million last year. We should be growing that amount, and increasing our budget cushion. By adding $1 billion this year and next to our surplus, we could reach a budget cushion equal to 12 percent of spending by FY 2021. Doubling the agency savings target to 2 percent per year could get us half way there.”