April 26, 2016
Good afternoon, everyone.
This is the third Executive Budget that I have had the honor to present to the City Council and the people of New York City.
I want to acknowledge the deep partnership we have had with the City Council throughout this and all our budgeting processes, and I thank them for their work to strengthen every corner of our city.
A budget is much more than a book or a presentation. It’s our roadmap for lifting up communities.
After more than two years in office, our vision for the city, the strategic investments we have put to work in every neighborhood, and our disciplined fiscal management are producing real results.
Communities across the city are experiencing: historic lows in crime; an unprecedented number of affordable apartments being built or preserved; a high school graduation rate of over 70 percent for the first time; and real financial relief for hardworking families thanks to things like Paid Sick Leave and Paid Family Leave.
Our Fiscal Year 2017 Executive Budget is $82.2 billion, and it builds upon our progress.
It continues the trajectory of progressive, responsible and honest budgeting we have established since assuming office.
We believe disciplined spending is the basis for a city that will be economically stronger, more inclusive and more competitive globally.
In this budget we have made investments with our long-term fiscal health in mind.
Since we last gathered in January for the Preliminary Budget, we have found ways to save $1.25 billion by the end of Fiscal Year 2017.
These savings in the Executive Budget will pay for nearly all of its investments.
And this is in addition to the more than $1 billion in savings we previously identified in the Preliminary Budget.
Taken together, the Preliminary and Executive Budget Savings for FY16 and FY17 total more than $2.3 billion.
That makes our Citywide Savings Program the largest spending reduction program in the last 5 years.
And it’s not done yet – because I am instructing OMB, agencies, and all Deputy Mayors to find hundreds of millions more in savings in time for the budget modification in November.
We are also adding to our substantial reserves to be ready in case of an economic downturn.
And we are carefully budgeting in an environment where partnership with other levels of government is more uncertain than ever.
On the State level, aid to New York City as a percent of the City’s revenues has consistently declined from a historical average of 20.5 percent since 1978 to an average of 16 percent over the last five years.
Since 2010, over $2 billion has been withheld from the people of NYC because the State eliminated its “Aid & Incentives for Municipalities,” or AIM, program, for New York City alone.
It’s an alarming decision considering that New Yorkers comprise more than 43 percent of the State population.
But we will continue to fight for our people in light of continued cuts that may come our way.
This afternoon, I want to first talk about the current economic situation in the city, the country and around the world.
Then I will describe the investments we’re making in our Fiscal Year 2017 Executive Budget, and then I’ll take on-topic questions.
Before I go any further, let me thank the many people whose hard work went into this Budget:
Dean Fuleihan, Director of the Office of Management and Budget – and his extraordinary team at OMB;
First Deputy Mayor Tony Shorris;
Deputy Mayor for Strategic Policy Initiatives Richard Buery;
Deputy Mayor for Health and Human Services Herminia Palacio;
Deputy Mayor for Housing and Economic Development Alicia Glen;
Emma Wolfe, Director of Intergovernmental Affairs;
and Jon Paul Lupo, Director of City Legislative Affairs.
Day in and day out, our economy is driven by the hard work and entrepreneurial spirit of New Yorkers.
The job of government is to ensure that our people are living and working in a safe, strong city that both grows and attracts the best talent.
That’s exactly what we are seeing today. Our population and local economy are growing – not just in Manhattan and its glossy office buildings, but in every single borough.
When a city works, people want to be there. And over the past 5 years, our population has grown at the fastest rate since the 1920s.
In fact, New York City has turned a demographic corner in recent years, reversing a 70-year trend.
For the first time since the late 1940s, we are experiencing net-positive migration.
Simply put, that means since 2010 more people have moved here than have left.
We also see that population growth is happening in all five boroughs.
And the Bronx, Brooklyn and Queens are leading the way!
As the city’s population grows, so does the economy.
We continue to break our own records for job growth.
New York City is home to an all-time high of nearly 4.3 million jobs.
This includes 249,000 jobs added in the past two years – which is a record for any two-year period in city history.
When you compare just New York’s five boroughs to the country’s largest metro areas – meaning city plus suburbs – we still come out ahead in job growth.
So it’s no surprise that New York City has outperformed the United States in job growth, too.
But it’s not enough to have a massive quantity of jobs.
we are seeing positive change in the quality of the economy – it continues to diversify, showing growth across multiple significant industries.
I want to specifically point out that the City is seeing meaningful employment growth in manufacturing for the first time in 25 years.
Manufacturing looks different than it did 50 years ago.
But it has consistently provided a path to the middle class for New Yorkers.
As of 2014, a year’s salary for an average manufacturing worker was about $54,000.
In 2015, as in 2014, every borough saw employment growth, with Queens, the Bronx and Brooklyn continuing to lead the way.
We’ve talked a lot about building a 5-borough economy, and this tells us that we’re now seeing results.
We’ve made meaningful change – but there is still more work to do.
NYC has experienced some wage growth in the past couple of years, but we still haven’t caught up to our pre-recession peak.
And the New Yorkers primarily benefitting from that income growth are the highest-paid among us:
Our top 1 percent of earners took home almost 40 percent of our income.
New Yorkers are doing everything they can – working hard, innovating and creating job and wage growth.
Yet, at the end of the day, it just isn’t enough for far too many of us.
And if too many New Yorkers are struggling in a relatively strong economy, it’s troubling to think what might happen if economic difficulties around the country and the world came to rest here.
Economic indicators for the United States are worrying.
Current estimates of GDP growth for the first quarter of 2016 are below 1 percent.
Economists are lowering growth expectations.
And corporate profits are falling.
First quarter revenues at the major investment banks dropped 19 percent in 2016 compared to a year ago.
These aren’t just numbers on a spreadsheet.
New Yorkers feel the impact of this when they open their retirement fund statements and see a number smaller than last month’s.
International economic indicators are also concerning.
Global equity markets are way down.
Brazil and Russia are in recession, and the European, Canadian and Japanese economies are sluggish.
And growth is also slowing elsewhere around the world.
Meanwhile, here in the city, the declining world economy and its effect on our financial services community is reducing our tax revenues.
We expect tax growth to be around 3.6 percent in FY16 and just 1.9 percent in FY17, after having averaged nearly 7 percent for the past five years.
And New Yorkers know how easily things can turn if our economy hits a recession.
We are determined to keep doing everything in our power to protect NYers from those effects should a recession hit.
That’s why we are once again adding to our reserves.
This year, we will add $250 million to the Retiree Health Benefit Trust Fund – which pays for retired employee healthcare – to bring it to a total of $3.7 billion.
For the first time, the City has added to the Retiree Health Benefit Trust Fund three years in a row.
We’re also maintaining the General Reserve – the City’s precautionary savings for expenses – at $1 billion annually.
Traditionally, this reserve was held at less than a third of that.
And we’re now in the second year of the City’s first-ever Capital Stabilization Reserve of $500 million.
This reserve protects our ability to make capital investments, and allows us to retire debt in a downturn.
We’re also taking important steps to mitigate risk and uncertainty.
We made critical progress on this by settling labor contracts with 95 percent of our workforce.
We’re carefully managing our out-year gaps.
And, as I noted, we will save an additional $1.25 billion across government by the end of Fiscal Year 2017.
This is on top of the unprecedented healthcare savings we’re achieving.
We have already met both our Fiscal Year 2015 healthcare savings target of $400 million and our Fiscal Year 2016 target of $700 million.
In Fiscal Year 2017, we will achieve our goal of $1 billion in healthcare savings.
Ultimately, we’ll see guaranteed savings of $3.4 billion through Fiscal Year 2018 and $1.3 billion in savings every year thereafter.
So, as we watch volatile global trends, and take every prudent step to shore up our finances in the face of an unexpected downturn.
We recognize that we must be ready for whatever fiscal challenges we may confront.
We’ve seen consistently declining support from both the Federal government and the State government in recent years.
The latest State Budget initially included dangerous cuts and cost shifts.
These would have imperiled key City services, and squandered real opportunities to fight inequality and lift up working people.
But after working in earnest in Albany, we managed to avoid proposals that would cut hundreds of millions of dollars of State funding for CUNY and Medicaid.
I want to thank every legislator who spoke up for the City’s interests, especially Speaker Carl Heastie and the Assembly Democratic Conference for doggedly defending the people of New York City.
In the enacted budget, our public schools will see an increase in funding that will help raise achievement.
And the State will once again fund New York City’s high-quality, full-day universal pre-kindergarten program.
We thank the State for both of these investments.
Education is a place where they are largely doing the right thing.
However, there is still a State shortfall of $1.6 billion with respect to Campaign for Fiscal Equity Funding.
This is the funding the Courts ruled was necessary to ensure that city children get – and I quote – a “sound, basic education.”
The State must meet this obligation.
They must also release the $220 million they previously committed for critical homelessness programming.
And real hurdles for New York City remain in the Fiscal Year 2017 State budget.
For example, the Governor has pledged to simply take part of the City’s sales tax revenue over the next 3 years to help the State settle unrelated debt.
There is no justification for this action, which does a real disservice to City taxpayers, costing them $600 million over three years.
This is just one instance of what we have been seeing for years now:
On issues as wide-ranging as Homelessness, Education, Transportation and Healthcare, the State has consistently attempted in ways large and small to cut or reduce its traditional support for its largest city.
So while we avoided the worst consequences this year, we cannot be sure we’ll be so fortunate next time.
Many believe this pattern will continue, giving rise to future uncertainty. We’ll have to keep fighting to protect New York City.
On the Federal level, we are currently facing a rocky road as well. After months of lobbying, this winter Congress passed a 5 year Transportation Bill with the first meaningful funding increase since 2009.
This gives us critical infrastructure resources we need in a city where more than 160 of our bridges are over 100 years old.
I want to thank our Congressional delegation for their hard work and commitment in this effort.
This was important progress, but remember that it took 6 years to get there.
And on other critical fronts, such as counter-terrorism funding, we face considerable risk.
Right now, we are lobbying against a dramatic proposed cut to the Urban Area Security Initiative, or U-A-S-I, which is vital to our ability to prevent and respond to terror.
The UASI grant was recommended at $330 million in the President’s request for Fiscal Year 2017, after being funded at $600 million in Fiscal Year 2016.
New York City’s UASI allocation could be halved.
And we’re not sure what level of Federal support we’ll be facing come November.
For 8 years, we’ve had a Democratic president, and that may not be the reality in the years ahead – and we need to be fiscally ready for that.
Even in the face of uncertainty, it is our obligation to continue making crucial investments that fight inequality and improve quality of life.
I now want to talk about new investments in this budget, and I want to begin by highlighting public safety.
The job of government, first and foremost, is to protect its people.
And today, the city is safer than ever.
The first quarter of this year saw the lowest number of shootings and homicides of any quarter in recorded history.
That is due to the tremendous work of the men and women of the NYPD.
We’re proud to have provided the resources in previous budgets to get the job done.
This budget deepens our commitment to the safety of our communities.
I am proud to announce we will invest $70 million to build a new police precinct in southeast Queens.
The 1-1-6 will cover the southernmost portion of the area currently served by the 1-0-5.
The 1-0-5 is one of the city’s biggest, most spread-out precincts – and for decades, residents have wanted to see a precinct closer to home.
Previously, we invested in a “satellite station,” with supplementary personnel and resources to serve the area.
Now, the neighborhoods of Laurelton, Rosedale, Brookville and Springfield Gardens will finally get the full precinct they’ve wanted.
And that will mean even faster response times and improved crime-fighting in the area.
We will work with the community and the NYPD to find the ideal location for the new precinct as soon as possible.
We are also augmenting the safety of New Yorkers by increasing funding for Emergency Medical Services.
Beginning in January, we’re adding 50 new ambulance tours to ensure faster response times to life-threatening emergencies – including 34 new tours in Queens and 16 in the Bronx.
We’ll be funding the tours through a $5 million investment in Fiscal Year 2017, and $9.8 million in Fiscal Year 2018.
This budget continues our work to create a culture of safety for inmates and Corrections staff at Rikers Island.
First, $170 million will be invested to fulfill our obligation to create an alternative facility for the incarcerated adolescents currently housed at Rikers.
Second, we will allocate $91 million to create more space at Rikers so that every adult inmate in the general population can have 5 hours of programming per day – including workforce training, substance abuse treatment and education classes.
We are also investing resources to take on a terrible scourge in our city: opioids.
As a city, we are losing more people to opioids than to crime or to traffic crashes.
We began taking aggressive steps last year to fight opioids, including:
Allowing more than 650 pharmacies citywide to dispense naloxone, a medication that can reverse overdoses;
Creating the NYC Support hotline, which, beginning in mid-October, people can call for a full range of support services and follow-through; and adding substance abuse specialists in schools across the city.
Now we’re investing $5.5 million more into the fight for:
More training of medical professionals to reduce overprescribing of opioids;
More distribution of naloxone;
And more seats in treatment facilities.
Now I want to talk about the investments we’re making in the next generation.
Our Equity and Excellence agenda will help put every child on the path to college.
This is critically important: consider that a college graduate earns $1.1 million more over the course of a lifetime than someone with only a high school diploma.
We began laying down the stepping stones to college for more of our kids with Pre-K, and now we are adding to that, investing in:
Reading support so every 2nd grader is reading on grade level;
Algebra for All 8th and 9th graders;
AP Classes for All our high schoolers, as well as individualized college counseling for high school students.
For decades, there was a dynamic in our system where many schools serving the children of the poorest neighborhoods received less funding than schools that serve better-off areas.
We are working to right that wrong.
We are making a major investment – more than $160 million a year – to raise the funding to all of our schools to an average of 91 percent of the Fair Student Funding standard.
We have already raised all our Renewal and Community Schools to 100 percent of that standard.
And we will ensure no school is funded at less than 87 percent.
If we get a similar increase in aid from the State next year, we will grow that commitment to $310 million.
This would raise the average again, to 92.5 percent by Fiscal Year 2018, with no school receiving less than 90 percent of the Fair Student Funding standard.
Next I want to talk about the major new investments this budget makes to forcefully confront two longstanding structural issues.
Homelessness and supporting our Public Hospital system.
These are challenges that have persisted in our city for decades.
They are the next fronts in fighting inequality and protecting our financial health.
Let’s begin with the crisis of homelessness.
Two weeks ago we announced a new vision for addressing homelessness, detailing how we will invest $66 million to help implement this vision in Fiscal Year 2017.
That investment is offset by $38 million in savings from efficiencies that result from uniting the Department of Homeless Services and the Human Resources Administration under one Commissioner of Social Services: Steve Banks.
I’d like to give a brief overview of the problem, and our new approach.
On the first day of the Giuliani administration, there were 23,500 New Yorkers in shelter.
On the first day of my Administration, it was over 50,000.
Today, there are some 58,000 men, women, and children in shelter.
Prior to announcing our new plan, we implemented major efforts to prevent homelessness, move NYers out of shelter, and more.
And we’ve projected that without those efforts, there would be over 71,000 people – instead of 58,000 – in shelter.
This is a problem we experience on the streets and in the shelters of New York City, but in fact, the Federal and State governments have played a part as well.
This year alone, we received $120 million less in Federal funding for NYC’s core affordable housing programs than we did in 2010.
And in 2011, both the State of New York and the City of New York decided to completely eliminate the Advantage program.
This program provided rental subsidies to help New Yorkers exit shelter and get into permanent housing.
The effects of ending these subsidies were undeniable.
As of 2013, nearly half of all Advantage families whose subsidies were eliminated returned to the shelter system.
That’s more than 30,000 NYers – 18,000 of them children.
Today, we are waiting for the State to make major decisions on Supportive Housing, and on Homeless Assistance and Prevention.
And we hope that they will join us in the effort to End the AIDS Epidemic with HASA for All.
The Assembly is there on most of these issues – we simply need final and timely action from Albany.
Now I want to talk about another status quo that is broken – and that we are committed to fixing.
And that’s the situation with NYC Health + Hospitals.
Health + Hospitals is the largest municipal hospital system in the nation.
It is the foundation of our entire healthcare delivery system.
In 2014, our 11 hospitals, more than 70 community-based clinics, and other facilities were visited nearly 5 million times.
Almost 1 in 6 New Yorkers were treated – many of whom rely on Medicaid, or are uninsured altogether.
We believe there must be a public healthcare system in New York to ensure that all New Yorkers, regardless of income or immigration status, have access to the high-quality care they need.
Health + Hospitals is at the center of that commitment.
Unfortunately, Health + Hospitals is being stretched to the breaking point.
The system is facing a projected operating gap of $1.8 billion by 2020.
We are taking action that will close this gap through $700 million in expense savings and $1.1 billion in new revenue.
Health + Hospitals has been buffeted by a perfect storm of changing healthcare economics. And it must adapt to survive.
First, Health + Hospitals continues to treat more uninsured New Yorkers than anyone else in New York City, even as Federal funding for treating the uninsured continues to fall.
Second, important reforms like the Affordable Care Act have succeeded in insuring more Americans, but immigrant populations without insurance and barred from Medicaid have been left out of the equation.
Third, our system is not equipped to provide the outpatient care more and more New Yorkers require.
Health + Hospitals is not alone in facing significant challenges – the healthcare industry is in transition across the country.
When I presented our Preliminary Budget in January, I promised to come back to you with a plan for Health + Hospitals and that is what I am doing today.
And in this I give great credit to Dr. Ram Raju, President and CEO of NYC Health and Hospitals, for his leadership at this difficult time.
He is a well-known reformer who knows how to fix troubled systems.
Nothing short of system-wide transformation is required to protect health care in our city.
Health + Hospitals is going to be more efficient, more integrated with the rest of New York City’s healthcare delivery system and – as a result –will provide better care.
I want to say from the outset: Our plan does not require the closing of hospital facilities. And we are not laying off healthcare workers.
Our plan, Health Care for Our Neighborhoods, has four primary elements:
First, we must stabilize funding by insuring more New Yorkers – and by getting a fair share of State and Federal funding for the uninsured care we so often provide;
Second, our system must expand the community-based preventive, primary and outpatient care that represents much of the future of American health care delivery;
To this end, we’ll continue creating places like the new Vanderbilt Clinic we’re building on Staten Island;
Third, we have got to improve the system’s quality and efficiency – whether in our hospitals or in our community-based outpatient facilities.
We’ll use our buying power to reduce the cost of supplies;
We’ll educate patients on the importance of preventive care as a way to avoid costly Emergency Room visits;
We’ll consolidate services, generating more revenue and better patient outcomes;
And yes, we’re going to have to match our workforce to patient needs using attrition, retraining and collaboration with labor.
Fourth, we must remodel care to reward outcomes rather than services.
The status quo provides financial incentives for more treatment, not for healthier people.
We will instead provide incentives for better, evidence-based treatments that lead to a healthier population.
We will invest $160 million in the current year to start this transformation, and $180 million in Fiscal Year 2017.
Let me be clear: our public hospital system is facing a profound threat to its future.
Our work to solve its deep-rooted challenges won’t be completed overnight.
We started this journey two years ago: Fighting for additional Federal support; providing Health + Hospitals with the technology it needs; assuming hundreds of millions in labor costs; and investing in new community-based facilities like the one I opened just a few days ago in the Bronx.
But what lies ahead is a time of intense transformation.
We will use every tool we have to reorient and protect a system that is a true lifeline for New Yorkers across our five boroughs.
Now I’d like to turn to an investment that will improve quality of life for New Yorkers.
Last winter, places like Queens, the Bronx and Staten Island experienced record snowfall.
These are areas where there are a lot of small streets that our fleet had trouble clearing.
After Winter Storm Jonas, we immediately began working with the community and evaluating our own processes to find ways to improve our snow-clearing.
Today we are making a $21 million investment so that we do better on these streets in the future.
We’ll acquire “little plows for little streets” – additional equipment that will help us get onto narrow roads, sidewalks, bus stops – especially during extremely heavy snow.
Our bridges are also essential to New Yorkers’ ability to get around.
I mentioned earlier that we are finally receiving critical Federal funds to shore up our transportation infrastructure.
We will also invest $276 million of our own resources for bridge repair and reconstruction.
That includes $244 million for the Ed Koch Queensboro Bridge, where we will replace the bridge deck and alleviate stress on structural components that are over a century old.
Another $32 million will be put to work on the Brooklyn and Manhattan Bridges for ongoing structural rehabilitation.
We’ll also invest an additional $186 million to repave 1,300 lane miles of our roadways in Fiscal Year 2018.
This will keep up the tremendous pace we are setting in Fiscal Year 2017.
The 1,300 lane miles we will resurface in the coming year are the most of any single year in over a decade.
We are building up water-based transportation, too – our Citywide Ferry System – in this budget.
$42 million will be used to purchase and upgrade ferries, and to outfit the Brooklyn Navy Yard as the system’s homeport where vessels will be stored and repaired.
That will bring 155 new jobs to the Navy Yard.
Next, I want to talk about the investments we are making in a different kind of water infrastructure – the vast system that delivers potable water to our homes and businesses.
I want to make it very clear that we fund our water system whenever it is required.
We have never delayed investment to the system because of concerns about water rates or anything else.
And we have found ways to keep water expenses low for homeowners.
Just yesterday, I announced that as long as I am Mayor of New York, the City will no longer charge homeowners for the water rental payment.
This is righting a wrong that’s burdened property owners for too many years.
Citywide, it will save homeowners a total of $244 million in Fiscal Year 2017 and $268 million the year after that – and there will be more savings every year following.
I’m also proposing a one-time $183 credit on water and sewer bills for more than 664,000 homeowners citywide.
If approved by the Water Board, this would be a 17 percent savings for a typical single-family household and a 40 percent savings for 150,000 homeowners, mostly seniors.
This is one way we are working to keep increases in water and sewer rates at the lowest levels in over a decade.
Now, our proactive investments in our water infrastructure include immediately directing $21 million to disinfect and fill the Brooklyn-Queens leg of Water Tunnel #3 by the end of 2017.
When complete, the tunnel will be ready to deliver potable water within 48 hours should it become necessary.
At the same time, we will add another $305 million in this budget, for a total of $657 million, to fully fund and accelerate construction of two shafts that will bring water from Water Tunnel #3 to Brooklyn and Queens.
This work will start in 2020, a year earlier than previously planned.
And we will invest an additional $7 million to construct a connection between Water Tunnel #3’s Brooklyn-Queens section and the Richmond Tunnel to Staten Island.
This budget also invests even more in our $20 billion-dollar-plus climate resiliency plan.
It funds two critical projects:
First, it includes $335 million in Federal dollars we secured for the East Side Coastal Resiliency Project.
This is a flood protection system that runs along the eastern shore of Manhattan from 23rd St. to Montgomery St., just above the Manhattan Bridge.
We’ll be breaking ground on this project next year.
And we will complement these Federal funds with $170 million for stormwater management infrastructure in Lower Manhattan.
Second, we will direct an additional $176 million in Federal funds for flood protection from Montgomery Street around the southern tip of Manhattan to Battery Park City.
And we’ll add $27.5 million more of our own resources to this project, on top of more than $100 million we committed last year.
There’s another investment in our budget that gets to our most basic right as New Yorkers and Americans: our right to fair and functional elections.
Following the problems that NYers experienced in last Tuesday’s presidential primary, we have created what is in effect a challenge grant for the Board of Elections.
I want to be clear that the Board of Elections is not a City agency.
However, the City of New York funds the Board – and our Executive Budget covers the basic expenses of running the three additional elections in 2016.
But we need the BOE to adopt a more professional approach so people don’t encounter machine breakdowns, misinformation, location changes, or other problems.
And we’re using our resources to incentivize these changes and help bring the city’s voting processes up to par.
We will also be lobbying to Albany to make legislative changes to the Board of Elections.
Before concluding, I want to take a moment to express my appreciation to City Council Speaker Melissa Mark-Viverito, Finance Chair Julissa Ferreras-Copeland, and the entire Council.
They are our constant partners in making investments that lift up New Yorkers.
In this budget, I’m proud to deepen that partnership by funding a number of key Council priorities.
This includes: increased Parks staffing; increased funding for the Beacon community centers in our public schools: investment in social workers who provide support to tens of thousands of our seniors; and the largest investment ever in our animal shelter system to open two more full-service shelters in the Bronx and Queens.
What I’ve outlined this afternoon are the specific, strategic, bottom-line actions that will lift up our communities in the coming year – and beyond.
The numbers add up. The goals are clear.
Using our resources wisely, and continuing to work for our neighborhoods every single day, we will keep moving forward – together.
Now a few words in Spanish before we begin on-topic Q&A.