1. New York City
“Budget 360” Overview
FY 2014 through FY 2017
November 2013
Prepared for
1
2. Budget Questions
1.
2.
3.
4.
5.
As this period of transition begins for the new Mayor, what do you
wish for New York City? How can the Mayor help achieve that?
If you could have the Mayor add anything to your community to
make it better, what would it be? And knowing that resources are
scarce, what would you be willing to trade to make it happen?
How would you suggest the Mayor raise more funds in order to
meet the needs of the City? Do you support raising taxes?
If you had $100 million of the City budget to spend as you saw fit
for the public, what would you prioritize?
How much do you think a fire engine costs? What do you think
costs more: a fire engine, or an after school program? Do you
think that's a meaningful comparison or fair question?
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3. Where Does The Money Come From?
Estimated Revenues NYC Budget 2013 Total $69 billion
Federal Categorical Grants
10%
Property Tax
27%
State Categorial Grants
17%
Other Non-Tax Revenues
10%
Personal Income Tax
12%
Other Taxes
5%
General Sales Tax
9%
Business Income Taxes
8%
Real Estate-related Taxes
2%
SOURCES: IBO
3
4. Where Does The Money Come From?
Estimated Revenues NYC Budget 2013 Total $69 billion
State and
Federal Aid
27%
Taxes
63%
Other Non-Tax
Revenues
10%
SOURCES: IBO
4
5. Where Does The Money Go?
Estimated Spending NYC Budget 2013 Total $69 billion
General Government
8%
Debt Service
9%
Education
28%
Pension & Fringe Benefits
17%
Recreation & Cultural
1%
Health, Sanitation &
Environmental Protection
6%
Social Services
19%
Police, Fire & Corrections
10%
Transportation & Housing
2%
SOURCES: IBO
5
6. The Capital Budget: Where Does the Money Go?
Capital Commitment Plan 2013 – 2016 (All Funds) Total $34.4 billion
Transportation
15%
Education
26%
Sanitation
4%
Public Safety
6%
Parks, Libraries & Culturals
8%
Environmental Protection
20%
Housing & Economic
Development
9%
General Services
8%
Health and Social Services
4%
SOURCES: IBO; Fiscal Year 2013 Capital Commitment Plan (October 2012)
NOTE: Plan categories defined by IBO. General Services includes public buildings and real estate, and citywide equipment purchases.
6
7. New York City Charter prescribes a process
and due dates for producing the upcoming
fiscal year’s budget
January
February
March
By January
16th
First
Hearings
By March
25th
•The Mayor
must
submit a
Preliminary
Budget to
the City
Council
•It is
customary
for newly
elected
Mayors to
be afforded
additional
time to
produce
their first
financial
plan, often
2 additional
weeks.
•The City
Council
holds public
hearings on
the
Preliminary
Budget
and represe
ntatives
from the
Borough
Boards as
well as any
member of
the public
who wishes
have the
opportunity
to submit
testimony
•The Council
issues a
report on
its findings
and
recommend
ations
April
By April 26th
•The Mayor
must
submit a
proposed
Executive
Budget to
the Council
and also
provides a
Budget
Message to
share high
level
comments
May
Second
Hearings
•The City
Council
again
conducts
public
hearings
June
July September
Negotiations
By June 15th
Next Five
Days
•The
Mayor’s
Office of
Manageme
nt and
Budget and
the City
Council's
Finance
Division
negotiate to
come up
with an
agreed
upon
balanced
budget
•The Council
votes on
the budget
and any
proposed
recommend
ations by
the Borough
Presidents
•The Mayor
has the
opportunity
to veto any
increases, a
dditions, te
rms or
conditions
the Council
has made to
the budget
but cannot
alter any
decreases
the Council
has made to
the budget.
The Council
can
override a
mayoral
veto by a
two-thirds
vote of all
Members
October
After the
five days
•The budget
becomes
the
Adopted
Budget
November
In November
•In addition
to the
chartermandated
process, the
Mayor, in
most
years, prod
uces a
public
budget
modificatio
n in
November
to move
money
between
agencies
and make
other shifts
in revenues
and
expenses as
needed
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8. Goals of the “Budget 360”
Review the Mayor’s budget and financial plan for
FY2014-2017 & analyses by key institutions to get a
360-degree view of the City’s financial condition,
including:
Projected gaps/surpluses for each year
Drivers of projected gaps/surpluses for each year
Identification of additional budget risks
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9. Roles of Institutions Surveyed
NOTE: City Council is not included due to its charter-mandated institutional role in the budget process (see budget calendar)
• State Comptroller
• Mayor’s Office & Office of
serves as the State’s chief fiscal
Management and Budget (OMB)
and auditing officer
produces and updates
Preliminary, Executive, and Adopted • Financial Control Board
reviews New York City financial
budgets
plans since created in 1975 by
• City Comptroller
an act of state legislature
serves as the City’s chief fiscal and
• Citizens Budget Commission
auditing officer
provides the public with
• Independent Budget Office (IBO)
nonpartisan analysis of New
provides nonpartisan information
York City and State financial
about the city budget and tax revenues
management
as an independent city-funded agency
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10. The Mayor cites the following budget drivers with
general agreement from institutions surveyed…
• Tax Revenue Estimates
– Highly dependent on economic forecasting
• Increased Spending on Education
– A combination of higher government priority & city supporting higher percentage of total
cost
• Debt Service
– Debt service growth is projected to outpace growth in local tax revenues; estimated increase
from 12.8% of local tax revenues in FY 2013 to 15% by FY 2017
– Increased by $2.2 billion, or 59%, since 2002
• Non-controllable Expenses
– Primarily made up of pensions, fringe benefits, and Medicaid
– Grown by $13.3 billion, or 133%, since 2002, compared to controllable expenses (excluding
Education) which have grown by $4.3 billion or 37%, at the rate of inflation
– Estimated increase from 44% of city revenues in FY 2013 to 48% by FY 2017
– Health Insurance and Pensions greatly increasing
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11. …But budget projections differ between the
Mayor’s 4-year plan vs. other institutions surveyed
FY 2014 - 2017 Projected Gap or Surplus
NOTE: Gap estimates do not include labor negotiation risk estimates (removed from City Comptroller’s estimate)
1,500
1,000
Dollars In Millions
500
0
(500)
(1,000)
(1,500)
(2,000)
(2,500)
(3,000)
FY 2014
FY 2015
FY 2016
FY 2017
$0
($1,965)
($1,769)
($1,382)
Independent Budget Office
$476
($930)
$157
$1,065
City Comptroller
$624
($1,736)
($986)
($205)
State Comptroller
$238
($2,290)
($2,054)
($1,707)
Financial Control Board
($102)
($2,579)
($2,379)
($2,032)
Mayor
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12. Differences in Economic Forecasting & Related Tax Revenues are
the Primary Drivers of Differences Between Mayor's Projections
vs. the IBO & City Comptroller
$3,000
$2,500
In Millions
$2,000
$1,500
$1,000
$500
$0
-$500
City Cmpt '14
Property Tax
IBO '14
Personal Income Tax
City Cmpt '15
Business Taxes
IBO '15
Sales Tax
City Cmpt '16
IBO '16
Real-Estate-Related Taxes
City Cmpt '17
IBO '17
All Other, Audit
12
STAR
13. Other Sources of Differences between the Mayor & Institutions Surveyed
(Excluding Tax Revenue)
400
200
Dollars in Millions
0
-200
-400
-600
-800
City Cmpt State
'14
Cmpt '14
FCB '14 City Cmpt State
'15
Cmpt '15
FCB '15 City Cmpt State
'16
Cmpt '16
FCB '16 City Cmpt State
'17
Cmpt '17
Taxi Medallion Sale
Agency Actions
DoE Medicaid Reimbursement
Uniformed Service Overtime
Overtime Expenses
Police Overtime PEG
Judgments and Claims
Debt Service
Pension Asset Gains
FCB '17
13
14. Settlement of labor contracts could
increase projected costs substantially
14
19. Sources of Differences between the Mayor & Institutions Surveyed
(Excluding Tax Revenue)
In Millions
19
20. Risks to Taxi Medallion Revenue Assumptions
• New York City plans to increase mobility for disabled residents and
everyone traveling outside the central business district in Manhattan
– 2,000 new taxicab medallions for disability accessible cabs
– up to 18,000 new hail licenses allowing livery cars to make street pick
ups, 20% for accessible vehicles
• These plans were ruled constitutional by the New York State Court of
Appeals on June 6, 2013 after a year-long legal battle
• There are requirements the City must meet, including an
environmental review and submission of a disabled accessibility plan
which could delay or derail these sales
• The nearly $1.5 billion the Adopted Budget assumes in revenues over
the next four years may be at risk ($300 million in FY 14, $400 million
in FY 15, $360 million in FY 16, $400 million in FY 17)
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