By Forum Staff
Mayor Eric Adams on Saturday announced several steps to stabilize the city’s finances given the convergence of circumstances threatening NYC’s financial stability.
Because the city has been forced to bear most costs of the asylum seeker humanitarian crisis at a time when revenue growth is slowing and COVID-19 stimulus funding is sunsetting, the city faces substantial fiscal disruption if circumstances do not change.
Since the beginning of the asylum seeker crisis, the administration said, the City has taken urgent action, opening more than 200 emergency shelters for the more than 110,000 migrants who have arrived in the five boroughs seeking shelter. Today, with approximately 10,000 asylum seekers still arriving each month, the city estimates this mounting crisis will cost taxpayers $12 billion over three fiscal years — an amount that will continue to grow without federal and state intervention and support. In an effort to maintain the city’s fiscal strength, the Adams administration is actively working to reduce housing and other costs by transitioning migrants out of the shelter system and humanitarian emergency response and relief centers to more cost-effective shelter, in addition to looking closely at other ways to reduce the costs of caring for the asylum seekers. The administration will also be taking additional actions to control spending and promote budget savings that will be announced in the near future. Mayor Adams has been clear, however, that these costs may affect every city service. As such, earlier today, he directed every agency to implement a 5 percent reduction in city-funded spending in each year of the financial plan through a Program to Eliminate the Gap (PEG) as part of the upcoming November Plan, Preliminary Budget, and Executive Budget. The administration will seek to minimize disruption to programs and services, and there will not be layoffs.
“This administration was elected with the task of making the tough choices today to ensure a better tomorrow for our city,” said First Deputy Mayor Sheena Wright. “These PEGs are vital to protect the city’s financial future and our ability to deliver for New Yorkers. What has not changed is our clear call to action. New York City cannot and should not navigate this asylum seeker crisis on our own, and we need support across every level government.”
Last month, Mayor Adams unveiled an updated forecast for asylum seeker costs, showing that the asylum seeker population has grown faster than previously anticipated and that absent additional state and federal support, the crisis could cost the city more than $12 billion over three fiscal years. This figure represents almost triple the city’s previous $3.9 billion estimate for two fiscal years, which was funded in the city’s financial plan. This means that, without additional state and federal support, the city will need to add another $7 billion to the financial plan over this year and the next to meet rapidly expanding needs.
If Albany and Washington, D.C. provide significant and timely financial support and reduce the strain on New York City, and if the city recognizes better-than-expected revenue, the Adams administration will reevaluate the need for substantial cuts to city-funded spending.
