By Forum Staff
Mayor Eric Adams on Tuesday released the City’s balanced $109.4 billion Preliminary Budget for Fiscal Year (FY) 2025. With near-record reserves despite significant fiscal challenges, the budget builds on the Adams’ administration proven track record of responsible fiscal management, while prioritizing the needs of working-class New Yorkers by restoring critical investments in public safety, public spaces, and young people.
Facing a historically high $7.1 billion budget gap due to the growing asylum seeker crisis, drying up federal COVID-19 stimulus funding, expenses from labor contracts this administration inherited that went unresolved for years, and slowing tax revenue growth, the Adams administration took action early in the budget cycle with a citywide hiring freeze and Program to Eliminate the Gap (PEG) savings program. These actions helped balance the budget and stabilize the city’s financial position without layoffs, tax hikes, or major disruption to City services — and their success, along with better-than-expected revenue, ultimately allowed for the restorations of funding for the City Police, Fire, and Sanitation Departments, as well as the three Library systems.
Adams said the City “has continued to effectively manage the asylum seeker humanitarian crisis” largely on its own without substantial federal or state aid — including getting on track to reduce city-funded spending on the crisis by 20 percent over FY24 and FY25, primarily by helping put migrants on a path to self-sufficiency and reducing the per-diem costs of providing care. To date, New York City has provided care for more than 170,700 asylum seekers, with over 68,000 currently still in the city’s care. The city has also connected school-aged children to public schools through Project Open Arms and provided case management, shelter, food, child care, and more services.
Photo Courtesy of Ed Reed/Mayoral Photography Office
Mayor Adams this week released the City’s balanced $109.4 billion Preliminary Budget for Fiscal Year 2025.
As a result of the administration’s policies — including providing 30 to 60 days of intensified case management — more than 60 percent of the asylum seekers who came through the city’s intake center have left the city’s care. Additionally, daily growth of the number of migrant households in the city’s care has slowed by nearly 60 percent since implementing these policies. Through the Asylum Application Help Center and satellite sites, the city has helped submit more than 27,000 work authorization, temporary protected status, and asylum applications — moving asylum seekers that much closer to being able to legally work and be self-sufficient.
Under the cost management efforts, per-diem care costs for migrant households will be reduced by implementing efficiencies in the service and staffing models at Humanitarian Emergency Response and Relief Centers (HERRCs), renegotiating rates and rebidding for services in shelters currently relying on for-profit vendors, and transitioning migrants from costlier HERRCs to facilities managed by a nonprofit service provider under the traditional shelter model.
With these measures, the city has reduced the costs associated with the migrant crisis from $12.25 billion to $10.6 billion from FY23 through FY25 — generating approximately $1.7 billion in gap-closing savings over FY24 and FY25.
In addition to reducing costs, the Adams administration is fighting back against Texas Governor Greg Abbott and the transportation companies he uses to transport migrants to New York City in bad faith to hurt NYC and overwhelm our social services system. Last month, Adams issued Executive Order 538 to protect the safety and well-being of asylum seekers and city employees by making it against the law to use charter buses to bring migrants to New York City without coordinating with city government. The city then sued 17 bus companies for transporting and abandoning more than 33,000 asylum seekers in New York City without paying for the ongoing costs of care for those people. The lawsuit seeks to recover approximately $708 million.
Including the $1.7 billion in asylum seeker-related savings, the PEG implemented by Mayor Adams in the Preliminary Budget achieved almost $3.1 billion in savings over FY24 and FY25, with every non-exempt agency meeting its target. Total PEG savings over FY24 and FY25 is a record nearly $6.6 billion since June 2023. The PEG minimized service reductions, with 99 percent of Preliminary Budget PEG initiatives being efficiencies or cost re-estimates that will not lead to service reductions. Additionally, the city did not lay off a single employee or raise taxes to balance the budget.
Projected tax revenues in the Preliminary Budget exceed those in the November 2023 Financial Plan tax by $1.3 billion in FY24 and $1.6 billion in FY25, due to better-than-anticipated economic performance in 2023. Tax revenue growth is expected to remain slow in upcoming fiscal years as the local economy cools — reinforcing that the city cannot rely solely on revenue growth to solve immediate fiscal challenges.
The Preliminary Budget includes a near-record level $8.2 billion in reserves — including $1.2 billion in the General Reserve, $4.8 billion in the Retiree Health Benefits Trust Fund, $250 million in the Capital Stabilization Reserve, and $1.96 billion in the Rainy-Day Fund. A combination of savings and FY23 revenue was applied to balance FY24. Outyear gaps are now $5.2 billion in FY26, $5.1 billion in FY27, and $6.0 billion in FY28.
After they met their PEG, Mayor Adams decided to exempt the city’s three library systems as well to prevent additional service reductions in the future. The New York City Department of Education (DOE), New York City Department of Social Services (DSS), New York City Department of Youth and Community Development (DYCD), and New York City Department for the Aging (DFTA) were partially exempted to minimize service disruptions.
Funding is restored in the Preliminary Budget for the NYPD to add another police academy class of 600 new recruits set to join the ranks in April 2024. This class of recruits will graduate in October and will join the three additional police classes already scheduled to graduate this year. Funding will also be restored to return a fifth firefighter at 20 FDNY engine companies and maintain 190 firefighters on payroll who are not expected to be able to return to full-duty status. The funding restorations build on successful efforts by the Adams administration to drive down overall crime, with murders down 12 percent and shootings down 25 percent in 2023.
The Preliminary Budget includes restored funding to maintain 23,000 DSNY litter baskets and allow DSNY to continue installing its Litter Basket of the Future. Funding will also be restored for the New York City Department of Parks and Recreation’s (NYC Parks) Parks Opportunity Program (POP), which gives thousands of low-income New Yorkers six-month paid opportunities and training programs each year. POP workers help maintain and operate New York City parks and facilities, and the training they receive through the program prepares them for full-time NYC Parks job opportunities.
The funding restorations build on successful efforts by the Adams administration to keep city streets and public spaces clean for all New Yorkers to enjoy — with efforts to containerize 100 percent of the city’s garbage, drastically reduce the time trash bags sit on city streets, and target hot spots for cleaning and rat mitigation within city parks during evening hours.
In the Preliminary Budget, $10 million is restored to 170 DOE community schools, which partner with community-based organizations to provide holistic support to students and their families, including providing health care, additional learning opportunities, and social and emotional counseling. The budget also includes an $80 million investment to fund DOE’s portion of the Summer Rising program — the city’s summer enrichment program for elementary and middle school students, which is jointly funded with DYCD — replacing temporary and expiring federal COVID-19 stimulus dollars used under the previous administration to make the program entirely city-funded for the first time.
“It is refreshing to see the administration acknowledge the importance of shifting contracts for asylum seeker services away from costly emergency for-profit contractors towards non-profit organizations, as the council has been advocating for many months,” City Council Speaker Adrienne Adams and Finance Committee Chairman Justin Brannan said in a statement. “While the administration has presented a balanced budget for FY25, continued challenges remain with out-year gaps, PEGs, a hiring freeze, and other issues. Education services for our children, public library services in our neighborhoods, community-based mental health, social services, and other government programs must be prioritized to ensure an equitable recovery for our city.”
