New York City begins its months-long budget review process as Mayor Bill de Blasio released his initial fiscal year 2017 budget alongside complaints of state overreach.
As the Gotham Gazette reported, de Blasio released an $82.1 billion preliminary budget that the mayor himself called “boring.” The proposal places an emphasis on fiscal conservancy and revenue building, in lieu of new objectives. However, the mayor’s proposal did call for increased spending to address homelessness, school overcrowding and the city’s pension obligations.
All told the proposal includes about $740 million in new spending, the Gazette reported, including $62 million for ThriveNYC, a new mental health services initiative, and $53.7 million for homelessness prevention.
The initial budget proposal also included setting aside funds for the city’s general reserve, though the Gazette noted these savings were not as substantial as in previous years. Several city council members have already called for de Blasio to increase recurring savings and build up additional reserves before final approval of the budget is granted.
Council members have asked the mayor to implement a Program to Eliminate the Gap before issuing his finalized executive budget. Previous administrations have utilized a PEG to create specific spending reduction guidelines and goals for individual city agencies. Though de Blasio did not implement such a program with his initial proposal, the Gazette reported the mayor has stated he is seriously considering doing so moving forward. New York Mayor Richard de Blasio’s initial budget includes funding to address homelessness and school overcrowding.
Tensions with the state
One thing the mayor’s initial budget did not include was an acknowledgment of changes to the city’s funding obligations as outlined in New York Gov. Andrew Cuomo’s proposed state budget. Under Cuomo’s proposal, state budget cuts would leave New York City responsible for providing more funding for both state Medicaid programs and for the City University of New York. As Yahoo News reported, Cuomo’s proposal has led to tensions between the governor’s office and city officials, including New York City Comptroller Scott Stringer, who said the governor was taking advantage of the city’s budgetary surplus and economic growth.
“Funding cuts in the governor’s budget proposal could cost the city $4.8 billion.”
“Some upstate legislators just don’t get it,” Stringer said. “They see New York City as their piggy bank.” According to Bloomberg Politics, State Comptroller Thomas DiNapoli sided with the de Blasio administration, saying the governor’s budget poses the biggest threat to New York City’s finances and could cost the municipality $4.8 billion in the next four years.
DiNapoli also cautioned that while the mayor’s office reported a surplus for fiscal year 2016 and presented a balanced preliminary budget for 2017, the state comptroller’s office is still forecasting a $2.3 billion deficit for the city in 2018. That deficit, linked to the possibility of economic slowdown due to global market volatility, is estimated to increase to $2.9 billion in 2019, without factoring in the governor’s funding changes.
How Questica can help
Public sector budgeting requires not only balancing current spending and revenues, but also making educated assessments of a municipality or state’s future financial needs. For a city that needs to balance funding for new initiatives and citizen priorities with fiscal conservatism and state obligations, being able to accurately forecast beyond the current fiscal year can help to weather economic setbacks.
With Questica, cities can utilize an all-encompassing public sector budgeting platform to manage, balance and plan complex budgets through web-based software. In addition to providing a streamlined, comprehensive and real-time solution to inefficient spreadsheets, Questica offers several analytical tools that provide for sounder budgetary decisions.
Through its Operating and Capital Budget platforms Questica allows for unlimited multi-year hypothetical budgeting that help cities to prepare for changes in fiscal obligations or revenue. Additionally, Questica’s Salary / Position Planning module allows municipalities to accurately forecast all costs associated with positions and employees. Finally, through the Performance Platform, cities can set quantifiable goals for initiatives that are being prioritized to ensure spending is being utilized effectively.
Municipalities finalizing their budgets for their upcoming fiscal year should contact Questica today to learn how flexible and comprehensive budgeting software aids in accurate fiscal planning.