NYC's $125 Billion Budget Faces Long-Term Risks

0:00 Speaker 1 Well, fourth of July weekend, two hundred and fifty years. Let’s go to New York City Andrew Ryan. Andrew Ryan is the president of the citizens Budget Commission. And there’s a rumor that we have a mess in our hands.

0:15 But I’m gonna let Andrew Ryan to tell us how the budget is. I get the budget was supposedly signed off and we’re ready to go, but everybody’s yelling at everybody. And well, Andrew Ryan, president of the City Budget Commission, tell us what’s going on.

0:34 Speaker 2 Okay, So the mayor and the Speaker came to agreement, as they do every year, and they agreed to a balance budget. But let’s kind of peel away what happened. Let’s just spend back to January for a second. The mayor spoke the truth. He told everyone clearly the city has a huge structural budget problem, and then he went

0:54 to attack it and closed up budget up and now he did some good things. He appointed these chief Savings Officers that went into each agency and he’s found some savings and that’s the right approach, and frankly needs to do much more of that. But the reality is, we have a huge structural budget problem and the budget agreement.

1:09 The one hundred and twenty five billion dollar budget agreement does not solve that budget problem. Next year is balanced, We shouldn’t be under any we shouldn’t leave anybody the wrong impression. Next year is bounced. But the way he closed that budget gap was with five billion dollars in one shots, short term savings and shifting costs his future taxpayers.

1:29 And when you use a one shot, that’s just the patch, that’s one time money. It leads the hole to the open next year. So he’s left the city next year himself as mayor with a gaping hole next year of six point four billion and increasing fiscal stress in the years after that budget gap goes up to eight point

1:45 five billion. But that’s actually what we see on paper. It doesn’t include the next round of raises for city employees, and it does include his very ambitious agenda. Remember, he wants to fund universal childcare, it’s not in the budget yet.

1:58 He wants to fund three buses in the budget yet, so there’s more money that he wants to spend. So we’ve got a problem right as it is, and it grows over time.

2:08 Speaker 1 Understood, Now, is the problem in any particular spot.

2:16 Speaker 2 You know, you can look at it in specific places and overall overall and let’s just spend back. We have for the last decade layered on more and more programs into the city. And some of these are good programs, but we haven’t had any of the discipline. And frankly, when revenues are coming in hand over fist and we

2:31 get a lot of federal and state aid, you know, during COVID, money is layered on programs are without any serious effort to say, hey, what are we doing that we shouldn’t be doing, what’s actually not helping New Yorkers?

2:43 How are we running more efficiently? We haven’t had a serious effort to ask or deal with any of those questions. So we have an overall problem that we’re just spending more than we take in. Then you look at specific choices.

2:54 Our school system has you know, shrunk around one hundred and fifty thousand students over the last ten years, and while charter schools have gone up around sixty thousand. But as we’ve reduced as enrollment declines, we’ve been holding individual schools harmless and we give them the same amount of money, which makes no sense. We now have two hundred schools

3:13 with under two hundred kids. So we are spending literally four hundred million dollars a year to give schools the same money that they used to get when they had more students. That money is not well spent.

3:25 Speaker 1 Understood now, is it over? Is the budget closed or is there a system to go back and try to make adjustments.

3:35 Speaker 2 Well, the way the city budget works, just structurally is every quarter there is an update, so we get to see how things are going, how the revenues are going, how the spending is going, and then the budget is locked and adopted for this year. We might see some adjustments because listen, we got to watch the economy. If

3:52 it’s good, we’ll have more money and we need that. Quite frankly, that’s good for everyone. But if there is some slowdown or adjustment, we need to deal with that. But the issue is the effort to save money to increase efficiency can never be over. And for his credit, the mayor said no and the first step and your mayor,

4:09 i heard him last night on TV say no, we need to continue with the chief Savings officers identifying savings. The reality is they’ve identified a billion dollars of savings each year in the future. But that should double, that should triple. In two years, that should quadruple, and that effort should not stop because we need an efficient government,

4:27 we mean a higher quality government. Part of what the problem in New York. It’s always going to be expensive. But if we’re not getting value for those dollars, that’s where it becomes a real problem for all different New Yorkers.

4:37 It’s not whether you’re rich, reports are you getting the value you need to have a city that is worth you staying here, and that effort has to continue.

4:47 Speaker 1 Andrew Ryan, President of the Citizens Budget Commission, thank you for bringing all New Yorkers up to date because how New York City goes is how the whole region goes. And have a happy for in the happy two hundred and fifty years.

5:01 Speaker 2 Thank you so much, Thank you so much for having me