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Transcript: Mayor de Blasio Presents the Fiscal Year 2020 Preliminary Budget

February 7, 2019

Mayor Bill de Blasio: Good afternoon, everybody. This is the sixth time I have had the opportunity to provide an update to the people of New York City on the preliminary budget for the upcoming year. I want to say at the outset, the word preliminary is very, very pertinent in this case. Never has the word preliminary been so appropriate in my previous five years because we're dealing with some very unusual circumstances here, which I'll go into. So, this is our effort at this moment in time to say how we will proceed as a city against an uncertain backdrop. Clearly we'll be back in a couple of months with the executive budget, hopefully having a lot more solid information at that point to act upon.

But the reason for the uncertainty, there's three specific challenges we face. The first and the greatest is our overall economic situation. The national economy is at a point that is uncertain. We are seeing the impact of that reality on our revenue already. Most notably, the volatility in the stock market is affecting revenue in real time. And we are very concerned about where that may take us, but we're much more concerned about the bigger trajectory of the economy and what that could mean for New York City and for our budget.

Second – decisions in Albany, I'll go over them in a moment but very specific proposals already before us that would have a very substantial negative impact on New York City, and the situation Albany is getting tougher as we go along in terms of the fiscal situation.

And then third – uncertainty emanating from Washington that – some of that is on the policy front – for example, the trade issue – but some of that is a more immediate, the possibility of yet another shutdown and what that would mean for us. No one is predicting it, but it is a live and real possibility.

So, those are the kinds of things that are coming together to create an unusual level of uncertainty that we're doing our best to address in this preliminary budget. Now, depending on how each of these realities develop, we well may have to limit some of our investments or slow down some of our investments or in fact cut some programs and some investments outright. We have some tough choices up ahead under any scenario. We will be guided by the need to make hard choices, to find savings, and then when we have to choose we will favor the priorities we believe are most strategic and high impact.

And if a program is nobly intended but not as strategically central or not as valuable, that's where you will find the cuts. So let's talk about some of these pieces. The first and most important, again, major uncertainty is the economy.

More and more observers, more and more key players in our national economy, particularly in the business community are seeing signs of a recession. There's a pretty strong debate right now about whether a recession is coming in 2019 or 2020, but there is a very high likelihood that it's going to be one year or the other. This country is, right now, in the second longest recovery ever since World War II. It is now 116-month long recovery. That is a very good thing. The problem is economic history teaches us that all recoveries eventually end. So, by any normal measure, unfortunately a recession is in the offing.

This is a situation that a lot of people have looked at, obviously, including some of the people who predicted accurately the 2008 crash and some of the people who did not see the 2008 crash coming. Both sides of that divide, you hear more and more voices saying some kind of slowdown is imminent.

Particularly notable to us was what happened in December in the stock market. The month, as you will remember, began with extraordinarily troubling declines and volatility. By the end of December, we saw the biggest monthly decline in the stock market for any month since the Great Recession. So almost looking back over a 10-year period – December, 2018 was the single worst month for the stock market. Again, that had a very immediate impact on our revenues, but as unsettling that that could have happened, we have no way of knowing if that was aberrant or if we might see something like that again in the near term.

Clearly there are major, major unresolved issues of policy that are affecting the economy most notably on the trade front. We see a weakening housing market. So there's a series of things that cause us tremendous concern. In terms of our tax revenue we see it slowing clearly – convert. Compared to last year, last year we saw a distinct one time a spike in revenue because of the federal tax law changes. We saw that coming, we projected that, that happened. But in fact it was one time only. It was not expected to be recurring revenue. It proved not to be recurring revenue.

What we're seeing this year is particularly a problem in terms of personal income tax. We have seen our collections go down and now compared to projection, almost $1 billion lower than the projection that we had in place from last year. So that is all substantial unto itself and immediate.

The second major uncertainty is what's happening in Albany. I'll be speaking about that in greater detail on Monday when I give my budget testimony in Albany, but I do want to go over the big picture and it certainly is cause for concern. When the Governor announced his budget, there were almost $600 million in cuts and cost shifts for the next fiscal year included. That is a very troubling starting point to the process. That includes about $300 million less in education funding than we need, about $125 million reduction in TANF and financial assistance to families in need. And there's also an impact on shelter costs, foster care, mental health services, a $59 million cut in health services, which includes a family health disease prevention and emergency preparedness, and a $13 million cut for our initiatives to keep young people out of foster care and to keep them out of detention.

So these are all substantial pieces. We are very concerned that that was a very big hit. Remember in recent years, we have sustained other State cuts and these are permanent cuts. I want everyone to understand that. When these cuts occur in the State budget, it's not just for one year, the money goes away. It never comes back. This is a very big additional hit being proposed. We're going to fight it hard. We're going to fight hard in the Legislature to get as much of this reversed as possible. But history shows that, you know, we win some, we lose some. And so we cannot be overly optimistic when we're starting at such a substantial figure.

That budget proposal from the Governor occurred before the announcement earlier this week, which adds concern to the situation. Earlier in the week, the Governor and the State Controller together announced that the State is experiencing a $2.3 billion shortfall for the current fiscal year for their budget and they project a $1.6 billion shortfall for next year. That's a problem for the State, but it's also a problem for the City because that puts additional pressure on the State and leads to choices that, again, could directly or indirectly hurt the City. So we are braced for potential additional problems when the Governor announces his updated budget.

Third and last is the situation in Washington. A year ago when I presented the preliminary budget, I talked about a manufactured crisis in Washington. We had a different version of that this year with the shutdown. We saw the negative impact of the shutdown in the economy. We saw how much money was wasted as a result of the shutdown. We obviously know there's a possibility of another shutdown. Again, I am hopeful that the lessons learned a few weeks ago will prevail and that it won't come to that, but we have to be sober about the fact that there's nothing that has changed appreciably in the President's position. And so we may be facing that danger again.

Reminding people, two central elements to the dangerous shutdown that we need to think about in terms of this presentation, the most important one, the impact on everyday New Yorkers. Once a shutdown occurs, if it were to occur, at this upcoming deadline by May, New Yorkers would be losing about half-a-billion dollars a month in direct support for things like food stamps and school lunches and a variety of things that directly affect our people.

Also, the City government would be losing about $110 million each month. That would add up, if it went on for a year, to $1.2 billion. I don't predict that. I am not trying to offer a doomsday scenario. I'm just trying to ground us in the real dynamics of what a shutdown means if it happened again and it continued to set new records for longevity, there are real immediate dangerous to our budget. Obviously we're going to work very hard with our representatives in Washington to do all we can to avert such a situation.

So when you add up those three challenges and you say, okay, what does it mean in terms of decisions that we brought to bear for this preliminary budget – it means that we have decided to institute a PEG program, a Program to Eliminate the Gap in the budget. This is the first ever PEG program under this administration.

We have constructed it in a way that we think is sensible. It is not the same approach taken in past administrations, but it is the same – it shares the goal of mandatory savings being required from each agency. The overall game plan is this – I'll talk about some other savings we have already achieved and some ongoing savings, but this is additive. These are additional savings that we must find basically in the next two months. The goal is, and it is a – when I say goal, everyone will be held to this. It must appear in the executive budget. There will be an additional $750 million in savings that we will find in the next two months. We will use a variety of tools to get to $750 million. One of those will be expanding our hiring freeze. We will focus the hiring freeze now, not just on where there are vacancies, but on our use of attrition and where there is attrition, there will not be a guarantee that lines will be filled or filled immediately.

Obviously there will be major exceptions for particularly vital services, but we're going to focus on expanding the hiring freeze as a central piece, but the piece that is most important is the PEG program. Every agency will be given a specific dollar goal they must meet. It will be individualized to the agency. This will be a very straight forward exercise. Every agency will be required to come up with real and tangible savings. A bar will be set high to ensure those are the kinds of savings that we need. I would say at the outset, I believe every agency will respond in an appropriate fashion. But I also want to be clear, so all New Yorkers hear this and certainly all of our colleagues in the agencies hear this, that if agencies are not forthcoming with the kinds of reductions we need the budget director, Melanie Hartzog, will herself make the decisions about what those reductions should be in each agency.

So now I want to just outline the overall a preliminary budget and this is a good moment to thank everyone who has spent so much time preparing this budget and we're all getting prepared for the long months ahead in this process. I want to thank of course our deputy mayors starting with First Deputy Mayor Dean Fuleihan and Deputy Mayor for Operations, Laura Anglin; our Deputy Mayor for Housing and Economic Development, Alicia Glen; Deputy Mayor for Health and Human Services Herminia Palacio; our Deputy Mayor for Strategic Policy Initiatives, Phil Thompson; want to thank my Chief of Staff, Emma Wolfe; my Chief Policy Advisor, Dom Williams; Director of Intergovernmental Affairs, Jon Paul Lupo; and of course our Budget Director, Melanie Hartzog and everyone at OMB who have done their typical outstanding work in preparing for this announcement.

Also want to thank Speaker Corey Johnson and Finance Chair Danny Dromm. We've been working very closely with them and their staff as well, as we led up to today.

The number – I want to start this piece of the presentation with the most important point, which is the actual number of this proposed budget. The Fiscal 2020 preliminary budget will be $92.2 billion. There has been substantial growth since June, and that is related to several things that are very specific.

The two biggest are the labor agreements that we have come to with some of the biggest unions in this city and has obviously set the pattern for all unions. Those labor agreements have added about a billion dollars since the adopted budget from last year or so. We've had about a $3 billion overall increase. That is about a third of it, another $632 million, if I'm getting it right, is in education. The number one element within that – about half of that is additional special-ED spending.

So around $300 million reaching many families who were not getting the special-ED services they deserve previously. An important part of that is our 3-K initiative, which we have been expanding. Another part is mandatory charter payments, which again, are an area of concern because this is a mandate from Albany that is costing more and more money and is one of the reasons why the budget is growing. We can go into other details as to other elements when our Budget Director gives her presentation.

Now, I want to remind people before the announcement today related to the $750 million in additional savings that must be determined by the executive budget, and that includes the PEG program and the expansion of the hiring freeze. We already had required agencies to find a substantial savings. The preliminary savings program is $1 billion for Fiscal '19, Fiscal '20. The $750 million is on top of that. And also important to say that the health care savings, also separate – $1.6 billion in Fiscal '20, $1.9 billion in Fiscal '21, and that will continue for every year thereafter – that $1.9 billion level. So there's the main body of our savings program, there's the health care savings, and the additional $750 million in new savings, including the PEG – those are three distinct elements that all point in the same direction, finding savings, so we can keep our services at existing levels to the maximum extent possible.

In terms of reserves, we are holding steady with our reserves at this moment. Total reserves – $5.75 billion. That's $1 billion in the general reserve, $250 million in the Capitol Stabilization Reserve, $4.5 billion in the retiree health benefits trust fund, and the vast majority of that, about $3.6 billion – it's because of budget action taken in the course of this administration and working very closely with the Council.

There are a few things to talk about in terms of investments, but what is generally true is this is a preliminary budget presentation in which there will be a fairly a small new investments in relatively few new investments. This is the smallest amount of new investment at any point last six years, and that is a, an indicator of the situation we're facing. One of the areas we've invested in consistently and these investments have unquestionably paid off, is in the area of public safety. We are obviously the safest big city in America – wouldn't change a dime of how we've used our money in terms of those investments. One of the areas that we still need to do better in is in terms of preparing our officers to handle mental health challenges, to handle emotionally disturbed individuals. So we're accelerating our Crisis Intervention Training, it's proved to be very effective. We want to make sure it reaches all officers who are most likely because of their duties to encounter emotionally disturbed individuals. The plan we now have accelerated has had already a number of officers trained, but all such officers would be trained by the end of 2021. The cost in Fiscal '20 will be $5.3 million.

The question of affordability, it takes many forms. Obviously, I would say in many ways the number-one issue in this city, what we're focusing on in this budget, we're obviously continuing a lot of our previous initiatives, but the new one we announced at the State of the City gets at the cost of health care at the 600,000 New Yorkers who are uninsured. And we have created a plan that will guarantee health care for all New Yorkers. NYC Care will reach about 300,000 New Yorkers who are not eligible for insurance. Our public option, MetroPlus, will reach, we believe as many as 300,000. The remaining pool of those who are eligible but uninsured, we have a very aggressive outreach effort already underway. The investment is $25 million for Fiscal '20. That ramps up to $100 million per year by Fiscal '22.

Another area where focused on in terms of affordability and equity is in terms of transportation. We all understand people need to get around to get to opportunity, and for so many New Yorkers have real limited means this is a huge challenge. That's why we're continuing our commitment to the Fair Fares initiative. It is ramping up a consistently. We are putting $106 million into the preliminary budget for Fiscal '20 as we continue to build that program and evaluate the real costs.

In terms of education efforts, we're building out a priorities that we have already set and accelerating in the area of 3-K, investing $25 million in Fiscal '20 to add a new district in the Bronx, District 8; a new district in Brooklyn, District 32. This is almost 2,000 new 3-K seats. With this additional investment, we will have a total of 20,000 of our three-year-olds in 3-K this September, and that means 14 districts will be represented by a September of 2020, that I've already been committed to. It's almost half of our districts. And that will include our 10 highest-need districts.

Another point on addressing a really profound need for New Yorkers in terms of getting around, is the speed with which people get around in the area of our buses. We talked about this in the State of the City as well, we need to move our buses more quickly. We have a plan to get buses moving 25 percent faster. One of the key elements of that is synchronizing traffic lights at 300 intersections per year – 300 new intersections I should say. That is an investment of $2.7 million per year, starting in the upcoming Fiscal Year.

So those are some examples of the kinds of investments that we have considered critical to make here, and that talks to the expense side of the budget. I'm going to spend a very quick moment on the capital side of the budget. And obviously we produced the 10-year capital strategy, every two years. And so, the capital plan for the upcoming period is – $104.1 billion. And the focus of this plan is on a lot of the initiatives that have been underway and very effective. A huge focus, of course, on creating affordable housing, and that includes the commitments we have made to our public housing, to NYCHA. A big focus on continuing efforts to protect our bridges, to continue to improve our roads and repave, obviously a focus on maintaining what is considered by many the finest water supply anywhere in the country, and we have a lot of work, a lot we have to do to keep that in good order. A lot of expansion of school seats. This is one of the number-one issues I hear from my fellow New Yorkers, many, many neighborhoods still experiencing overcrowding, big commitment here to additional school seats. And of course, resiliency efforts, addressing the challenge of global warming, something we will be committed to for many, many years to come.

So, as I conclude, I'll just say a few words in Spanish and then turn to Melanie. You know that you've all heard the truisms – the truism that the budgets are a statement of values. That's going to play out in these coming months. If we get continued good news from Washington, from Albany, from our broader economic context, we'll have more freedom. If we get bad news, we'll be ready to make some very tough decisions. We will make those decisions. Some of them will be hard, but there'll be based on our strategic imperatives. And that's how we'll go about making sense of each one of our choices. We said at the beginning of this term, the goal is to be the fairest big city in America. And one of the other things we said was, that should inform every decision. So if you have to make a choice between two programs, which one has a bigger impact on creating a fairer society? That's the prism through which we will look. We believe if we keep ourselves focused on strategic matters, that we can make the right choices and continue to sustain the progress in this city. But we do also recognize an unusual level of uncertainty and we're preparing for it.

A few words in Spanish –

[Mayor de Blasio speaks in Spanish]

With that, I want to turn to our Budget Director and thank her for her extraordinary efforts leading up to today. I'm pleasure to introduce Director Melanie Hartzog.

Director Melanie Hartzog, Office of Management and Budget: Thank you, Mayor. I'm going to quickly walk us through the changes since our November financial plan update and remind everybody that there's a technical briefing directly after. So, if we can go to the first slide here – thank you. So as the Mayor said, the Fiscal Year '20 preliminary budget is $92.2 billion. We closed the gap of $3.2 billion for Fiscal Year '20, and Fiscal Year '19 remains balanced. We achieve more than a billion dollars in agency savings in Fiscal Years '19 and '20. We've maintain our historic reserves $5.75 billion and continue with our cautious estimates on the revenue and debt service, and our out-year gaps are manageable – $3.52 billion in '21, going up to $3.3 billion – I'm sorry, going down to $3.3 billion in '23.

So in terms of our revenue changes, while we're reflecting increased revenues in this financial plan for '19 and '20, we're also noting that tax revenue is not growing at the same rate as Fiscal Year '19 compared to '18. As the Mayor mentioned, in Fiscal Year '18 we saw one-time growth of the personal income tax. We now forecasts that the Fiscal Year '19 personal income tax revenue is projected to be about $935 million less than last year. This is partly related to lower than expected personal income tax collections in December and January.

Quickly on reserves – just a quick note, because we're nearly through this fiscal year, we are reducing our Fiscal Year '19 general and Capital Stabilization Reserves. This is a routine adjustment that we typically make and the preliminary budget. We've jumped – so I'll just quickly point out, we're on the [inaudible], but for Fiscal Year '20 and City funds, were at $67.9 billion. And on all funds, as I said, we're at $92.2 billion.

So the next is our capital – 10-year capital strategy – keep going. So, this is a pie chart that breaks out our tenure, and, as you can see, our largest capital investment is in infrastructure. And finally, on debt service – just want to point out, I think this is very important, that our debt service payments do not exceed 15 percent of our City tax revenue. This is the benchmark for responsible capital financing.

And that is it, thank you.

Mayor: Okay, I am going to take questions on the budget. Yes?

Question: Mr. Mayor, you talked about the – this is the first [inaudible] from your administration but it's not a percentage to the dollar amount by agency. So –

Mayor: Yes.

Question: How are you guiding the agencies to hardly setting that dollar amount by agency? And what guidance are you giving them?

Mayor: I'll give you the broad stroke from my point of view, but let our Budget Director give you a little more nuance. I would start by saying what we did not want to do was an across the board single percentage goal. I think that is strategically ineffective, because it doesn't recognize where the efforts of agencies are particularly crucial, and it doesn't recognize the history of agencies in terms of what resources they have or not had – have not had. So, we wanted to come up with a tailor made structure, based on protecting our strategic imperatives, but also looking at which agencies we thought had more to give, and working hard to get them to tighten their belts and make some choices. We know that every agency does its best, but some have programs that perhaps have not been as effective as hoped. We're having kind – yield as – the kind of results we would have liked. Some have areas where they can find deficiencies, some have personnel decisions they can make that even if they're not ideal, they're sustainable. So it really is about fine-tuning. That process will happen this month, so by the end of the month each agency will have its goal, and then again they'll have an opportunity to come up with their own plan to meet it, and to satisfy OMB's criteria. Anything you want to add? Okay, go ahead.

Question: Just to clarify on that. So, OMB then will tell the individual agency, you need to cut your budget by $100 million or whatever that may be?

Mayor: Let me – just in the, in the name of not being misunderstood. Let's just use the X and Y for this point. An agency will get, you know, this agency needs to cut X amount, this agency needs to cut Y amount, this agency needs to cut Z amount. OMB will determine the dollar figure. The agency will then have the opportunity to come with a plan that achieves the dollar figure. If OMB is dissatisfied with that plan, doesn't think the savings are the right choices for any variety of reasons, they can say please hone it here, adjust it here, come back with something different. If after extended dialogue, OMB does not believe the plan is sufficient or workable, then Melanie Hartzog will decide for that agency what those cuts should be. Go ahead.

Question: Budget topic, with a different topic. Does the budget include any additional funding for the MTA?

Mayor: No, no. Go ahead.

Question: Mr. Mayor, asking for these cuts, but some of the concerns are right away are always that it's going to impact essential services for people [inaudible] fire houses. We've seen this before. How are you – is there at all a strategy to say this is where we want to start the cuts; this is the last place we want to cut? Are you giving that kind of directive at all?

Mayor: We are at a point that I'd say is early enough where we're doing it differently. First of all, we are not going to undermine the most essential services, which are public safety for example, or public schools. We're going to work hard to ensure that the front line services are absolutely consistent. That does not mean that a public safety agency or the DOE can't find savings that don't affect frontline services. You know, I think it's fair to say – and look at what happened at Health + Hospitals, part of why Health + Hospitals has become much stronger, is under the leadership first of Stan Brezenoff then of Mitch Katz, they found substantial savings on administrative side for example or on the way that revenue was collected. Equally, even though we have a long way to go to turnaround NYCHA, there were major changes made in the first couple of years of this administration in the staffing of administration at NYCHA that saved quite a bit of money. So the goal is to never negativity effect the everyday experience of New Yorkers. So at this phase, I would say we're in that kind of vein. Now, you might have programmatic cuts, you might have a program that has not proven to be sufficiently effective and is something we say, you know what, good try, but this just should not continue or it might be – it may be continuous at a more modest level. You also may have personnel cuts, and an agency may say, you know what, given the choices we have to make, we'll have 50 fewer employees compared to cutting some other things – will not ever be by layoff. I want to affirm at this point there is no discussion of a layoff. It would be obviously either attrition or not filling vacancies. But agencies will have a chance to offer a plan that they think works but OMB, to quote George W. Bush, "OMB will be the decider." Please.

Director Hartzog: I just want to say, this is not a process on also in which we simply say to the agencies, here is a target and get back to us, right. We want to have conversations on-going with the agencies to get a sense of what their ideas are. So it may be that there are efficiencies that they could achieve by doing things differently, that's part of what we're talking about with the partial, deepening the partial hiring freeze. We're not just going to look at new hires, but we're actually going to look at – in the same way that they're looking at a new hire for a month, there's been several positions that have [inaudible]. Do you need all those positions filled? Is there a better way to do the work? And, so, this is a process that's on-going communication with the agencies, it's not simply one, and inclusive of the deputy mayors and leadership here. It's not one in which we simply say to the agencies again here's a target, get back to us in a month or two.

Mayor: Yeah?

Question: You're talking about all these possible stormy clouds in the horizons, in the horizon but you're not talking about increasing the city's reserves and –

Mayor: It's for the same reason.

Question: - And the money and the budget is still growing, so?

Mayor: Again, we – first of all, it's been a iterative process, it's been five years of adding to the reserves, so thankfully we're in a position where we have strong reserves. But we can't at this moment commit to additional reserves, given that we need to find this kind of money. It just doesn't make sense, it's still – a reserve is still if you will an expense. So, we want to start by finding the additional savings. Now, two months is not a long time. So, if in two months we find that there is a bigger problem than we thought, we have to look at a whole lot of other measures then. But, right now it's sort of in the balance of things. The argument would be we have a strong reserve level; we have to find a way to economize elsewhere, let's see how that goes before deciding anything else. Yes?

Question: Do you have any – you mentioned before the – even front line agencies can implement certain parts of the deal. Do you have any sense of what kind of cuts the DOE can make?

Mayor: Sure. I mean I'll give you an example that's already happened, and I want to commend Melanie, and her team. I mean there's been a long standing question, with deep respect for the good work of DOE, it's been a long standing question about whether they had become too dependent on consultant contracts and whether there were areas where they could cut back without negatively effecting direct services for kids. Already in the savings plan, before we talk about the $750 – there's $23 million in cuts to DOE consultants. That could well be an area where there is more to be found. But, again, I use the H + H example, I use the NYCHA example, often times there are administrative cuts that can be made or other types of – other types of savings that can be achieved without affecting frontline service. That's certainly what we're going to be looking at.

Question: One more question.

Mayor: Yeah.

Question: Advocates have raised the issue of [inaudible] counselors in schools that have high populations of homeless kids. I know in the past in an issue –

Mayor: Yes.

Question: – In your initial budget that is added in. Is that assumed in this budget? Is that or is that –

Mayor: We assume – first of all, we have substantial resources going to address the particular needs of kids in temporary housing both in shelter and other types of temporary housing, we're continuing those efforts. It is an area where we're continuing and trying to perfect the best strategies and decide which money should go where. So we're not listing it here, we intend to list it going forward when we get to a decision on what's the best approach for the upcoming school year, but the commitment will be consistent. Okay, yes, Sally?

Question: Two questions. Fringe benefits, which includes healthcare, looks like it's almost going up a billion dollars from '19 to '20 and it seems like that's happening even as you're trying to get the unions to do concessions. Can you just explain why there's any – [inaudible] and by the way it's going up to also to $13.3 billion by '23. So if you're getting these concessions from unions, do you plan [inaudible] over the years?

Mayor: Just as I turn to Melanie, I just want to start by saying – look, over these last five years we've seen a much more productive relationship between labor and management in this city. The health care savings have been very substantial, there's already a process underway to find additional health care savings and that will be a collegial process. So this is just, to affirm, this is something that never stops. We're always looking sort of for the next generation and the next generation of health care savings as one example, but to the fringe issue in general?

Director Hartzog: So as the Mayor said, we've already achieved healthcare efficiencies through the labor settlements, and essentially what we're doing is bending the curve. There's more – work that's happening with – in partnership with the MLC – that's addressing it. There's a complication tally that has to do with, and it's very technical, as the year-over-year growth, it includes some of the pre-payment. It is too technical to get in [inaudible], I'm happy to talk with you about it at the technical briefing.

Question: I just want to follow up on that. So the overall budget is also going up this year and to the out years. Can you just talk about why – if you're concerned about the economy, why is spending going up so much?

Mayor: Mel, I'll do that. I'll do the less expert frame. You know, again, so let me, let me – I think this is really important to sort of the theory of the case here. If you say, today, look at New York City, how do we feel? 4.5 million jobs, strong local economy, unquestionably – lots of room for growth. We're safer than we've ever been, we see real improvement in schools – much more to be done. You know, we're putting a lot of resources into things that we think are really important to people's everyday life, affordable housing being one of the most obvious. We think that's a good strategic alignment – we think that the things that we're investing in are correlating to good outcomes and the city's – the life of the city is in a strong place right now, we want to keep that progress going. So I've said to all of you over the years, I believe there is an investment strategy that helps to foster growth and helps to foster, you know, more equality, more opportunity, we're continuing with that. We're not going to let a series of challenges move us off our strategy. But at the same time, we've got enough challenges that we're seeing on the horizon here that we have to adjust and look for ways to save money without negatively affecting our strategy.

The additions that we've talked about in this budget – labor deal is a good example – I feel very strongly that was a fair, smart labor deal. It was respectful to unions but very fair to the taxpayers too. It put us in a sustainable place. Labor being invested in the future of the city is important. So I wouldn't strategically change that. The education costs we talked about, well, I don't love the mandated charter costs, honestly, but it's a mandate – we're living up to it. I think the Special-Ed costs are a matter of justice. It's people – a lot families were not getting the Special-Ed services they deserved because unfortunately there was a rather cynical strategy to deprive them of it. We had said we would stop that, we've been consistently stopping that, the legislatures been very strong on that point too. 3K, to me, is a mission critical investment that, of all the investments we make in education, is one of the most foundational for the future, because we were historically missing the impact of early childhood education, which is to me the biggest bang for the buck in all of education. So I'm very comfortable where we are putting our chips. But guess what, like every one of us around the kitchen table with our household budget, if it turns out, you know, you don't have as much money this month as you thought you'd have and were going to buy a new sofa, you're not going to buy that sofa after all. It's literally that. We're not going to do somethings we would have done. And that's okay, so long as we stay to our strategy and the strategy continues to produce results.

Anything in this row, going back – Jill?

Question: Mayor, just following up on Sally's question, when you, you know, your first budget was I think around $75 billion, we're up to $92.2 billion now. Do you have any concerns about the rate of the growth in that in those six years and – over those six years there were some people who had urged you to [inaudible] earlier. And if you have any concern about how fast the growth came before and whether or not you might have –

Mayor: No, and I'll tell you, for two reasons, very fair question, but I want to answer it in two very different but important levels. First, a philosophical level, you know, I have Keynesian world view – I think you invest and it has an impact on your economy. You invest and it helps you achieve bigger goals. So, I'm not afraid of spending, so long as we can sustain the spending. I think there is a, if you will, an austerity-focused world view that many hold that misses the fact that austerity doesn't work as a strategy, trickle-down doesn't work as a strategy. An investment focused strategy by government has proven itself, here and elsewhere, more times than we can count.

So, since this is one of the biggest budgets in America, it basically, you know, to put it in context – the biggest public budget in America is the United States of America, followed by State of California, State of New York, City of New York – so fourth largest public budget in America if by that measure. I believe that, whether you're city, state, or federal, by making those investments, you strengthen your economy, you strengthen your people, you prepare for a stronger future – wouldn't change that for anything.

The second question would be, were we able to sustain it, and are we able to make adjustments now, and I'm very comfortable – the answer is yes. I think if we had not made some of those investments, we would not be seeing the obvious progress in a lot of the areas I delineated before. I am convinced had we not invested more officers on the street and the neighborhood policing initiative, we wouldn't be as safe as we are. I am convinced if we had not invested in some of the things we did in schools, we wouldn't be seeing the improved graduation rate and the improved number of kids going to college. Certainly in terms of our economy, the investments in job training have helped, investments that we've made to encourage job growth have helped, so I'm very comfortable that we got the yield we wanted from our investments, and we also put those reserves aside. This would be a very different question if we had not put aside reserves steadily, but we did and they're there. So if this is the beginning of a real challenge, we're turning rapidly now. We see the iceberg up ahead and we're turning now, and there's time to make the turn. So I wouldn't change anything in the past, I'm comfortable that right now, if we need to make a lot of changes, we can.

Director Hartzog: I just want to add that even in times where you – we've seen higher revenue growth year over year, the Mayor has also called on savings plans for each of the plans. So we're in a good position because we've continually looked for savings and we're going to continue to look for savings. At this point, as the Mayor said, that we are looking at slower revenue growth, and I think this is the fiscal prudence upon us all and the charge to actually implement a [inaudible] – to be aggressive, make sure that we achieve that target moving into the executive budget, and continue to monitor and look at where our revenue collections are as we go into the executive budget.

Mayor: Willy?

Question: Can you – I believe you said that the increase of the total budget is about $3 billion?

Mayor: From adopted to net.

Question: Okay. You said about a billion dollars was labor agreements—

Mayor: Yes.

Question: $300 million was special-Ed – how much was 3-K, how much was charter costs, and we're still missing a billion-and-a-half dollars –

Mayor: Yes, we'll go over that. So – let's say it's for everyone and then Melanie is going to jump in and do the rest. $1 billion plus, labor; $632 million, education, single biggest component; about $300 million, special-Ed, okay? Mandatory charter costs?

Director Hartzog: $113 million.

Mayor: $113 million.3-K expansion?

Director Hartzog: $109 million.

Mayor: $109 million, and then there's other pieces within education, and then, I think you have fringe and other things you're going to talk about so you do that – you do the $1.4 billion or so.

Director Hartzog: So the biggest components, and I'm going to do the big pieces – there's a bunch of other little pieces that we can get you in the technical briefing, but as the Mayor said, labor is $1 billion, education is $632 million, we broke out those components. Debt service is $358 million, fringe benefits are $325 million. Sorry?

Mayor: Debt service [inaudible]—

Director Hartzog: I'm being a budget person – going too fast, I apologize. So, debt service is $358 million, fringe benefits, $325 million. There are a number of other different pieces that make up the balance of that and I can go through that in the technical briefing but those are the big components.
Mayor: Okay, yes?

Question: The – just to be quick [inaudible] the PEG – that's $750 million, is that just one time savings, you know, in the next few months or is that expected to be permanent savings going forward.

Mayor: No, that's permanent. So – but again, I want to emphasize the PEG is arguably the single biggest piece but it is $750 million, combining PEG, expanded hiring freeze, and any other form of savings they can find that's appropriate, but it has to be $750 million, it has to recurring.

Question: Also, the Amazon deal, does that play any role in this year's budget?

Mayor: Not that I can tell, I mean I'm happy to let the experts say but effectively no. Yeah?

Question: And sort of, to follow up on [inaudible] questions, there are budget deficits, give or take, $3 billion or more every year for each of the three out years. The City only has a reserve of about $5 billion, are you comfortable with that? And, you know, how protective can a reserve be if you would blow through it in a year-and-a-half provided nothing changes from these budget projections?

Mayor: I'll start and Melanie will give a more erudite answer. Look, we've seen the pattern over many years and that kind of range – you know $3 billion-plus out-year gaps – you know, no one wants to see any out-year gap but in the real world that's a range that can be handled historically. Again, if things got tougher and tougher we'd have to make more and more adjustments. But if you said to me, is that a number per say that I find intimidating? No, we have had that kind of number in previous years. We've been able to manage it. The most important fact to me is that we have the reserves, we have a history of savings initiatives that are yielding impact and we're moving into a more aggressive savings stance. Do you want to add? Okay, yes?

Question: Mr. Mayor, on 3-K when you launched the program you said the City would be [inaudible] for eight districts and the feds and the State would pay for the remaining districts. Now that it's expanding to 12, why aren't the State and the federal government paying for those districts and what's the total cost going to be on the City in 2020 for [inaudible]?

Mayor: I'll have Mel go into that but let me do the preface. So, as with any new initiative, you see how it goes and you judge it accordingly – how effective is it, how fast can you get it up and running, how does it stack up strategically against other options, etcetera.

It was clear to us that the day could come when there would be State and federal funding – and I do want to say one of my predictions has come true. There is a Democratic State Senate. I think this year for a variety of reasons there's a whole host of things that the State Senate and everyone in Albany has to deal with. But a prerequisite honestly to one day getting the kind of funding alignment we would want for early childhood education was a Democratic State Senate. That is here. I believe that will be a long term feature.

Another prediction has come true which is another prerequisite to getting federal support, would be a Democratic House of Representatives. And we have that, and again, I think that's going to be a long term feature. The entire set is not yet complete. I think the easy, straightforward answer is that the conversation can happen in Albany starting next year. The conversation can happen in Washington, I would predict, starting in 2021. And that's still timely enough to help us achieve what we need to achieve. In the meantime we found we could go farther and we found the program to be very effective. There's huge demand and we decided to prioritize it.

Director Hartzog: The cost for the 14 districts at full ramp-up is $244 million in Fiscal Year '22.

Question: And what about this coming Fiscal Year 2020 with the 12 districts?

Director Hartzog: 14 districts – I will get that number to you.

Mayor: Who hasn't gone? Way back –

Question: What is the forecasted revenue for Wall Street bonuses and how is that changing compared to prior years?

Director Hartzog: At this point in time as we're looking at Wall Street bonuses, they typically come in in the months of February and March. At this point in time, I can say that we don't see any change at this moment to our forecast. It's very early on, as you know, given that they come in in February and March, and any changes that we'd see would be reflected in the executive budget.

Question: What is the forecast?

Director Hartzog: For – I'd have to get that from team. I can get back to you.

Mayor: We can do that in the technical briefing?

Director Hartzog: Yes, we can.

Mayor: You'll get it in the technical briefing, excellent. Yes?

Question: How optimistic this time Albany [inaudible] design-build [inaudible] –

Mayor: More optimistic for sure. I think we've come a long way on design-build. I think last year there was a breakthrough even with some negativity in the Republican Senate. There was still a breakthrough that more and more members of the Legislature were talking about it. It was becoming a little more of a public issue. The fact that it was going to save a lot of money and a lot of time on major capital projects has really started to register. This year I'm more hopeful – very good initial conversations in Albany. I'm going up again Monday. So, I think we'll make progress. Do I think we're going to get everything we want in one jump? Not so sure, but I think we're going to make some serious progress this year. Yes?

Question: The State has almost a $600 million [inaudible] and that's before the new [inaudible] –

Mayor: Correct.

Question: Are you expecting any [inaudible]?

Mayor: I'm worried. I'm worried. I mean that's – they've taken a big hit and, you know, I think the State, with all due respect, has sometimes when they've had a challenge looked to where they could find resources from the City. And I don't think that's fair, I don't think that's right because everything that we are doing we need to do and we have our own challenges. And I've said many times – and I've said to the State leaders as well – the difference between us and them, we don't have a safety net.

The federal government prints money. The State can do all sorts of budget maneuvers to get themselves out of a difficult situation. We have a legal obligation to balance our budget every year. It's not moveable. So, when they simply raid us, it hits us particularly hard. So, I am worried about.

That said, we're going to fight these cuts and I am hopeful in the Legislature there's going to be a lot of sympathy. Okay, Willy?

Question: You said that the projection [inaudible] personal income tax revenue to be $935 million below the previous fiscal year's [inaudible] collection. But you knew that that was going to be a higher-than-normal year. So, what was your projection for this year's tax collection and how much off of that are you [inaudible]?

Mayor: Let me have Melanie speak to it but I just want to affirm – the one time revenue coming off of the Trump tax legislation was recognized as one-time revenue. So, I think you're asking an apples-to-apples question. Please clarify.

Director Hartzog: You are. So, back in the executive budget and when we talked about the one-time revenues that came in, we did in fact say that there was a portion of that that was one-time and that it was not re-occurring but we did have a forecast that had some incremental increases. So, you're right. We did in fact – and very cautious about it – said that that was not going to be re-occurring.

Between that time we also had some additional revenues come in at adoption for personal income tax. That was one time as well. It was not re-occurring. As we moved in the November plan, what we started to see is the impact of the December stock market volatility and that then we said, 'okay, before we had –' let me just back track.

In the November plan, collections were looking strong and we then, incrementally, made an adjustment upwards. After the November plan we started to see in December the volatility of the stock market. And so that's when in fact estimated payments started to go down and what led to adjustments that we're making [inaudible] incremental change downward of $177 million in personal income tax.

So, over the course of the multiple plans and as we look at what our projection is for Fiscal Year '19, that's how we're saying between those two years it goes down and that we're now at a $935 million down. And I can get you all the changes in the technical briefing for each plan to plan so you can track the numbers.

Question: You said this was the smallest amount of new investment in a budget under your administration. What are the numbers compared to previous years?

Mayor: Do you have that list? We had it. It's a lovely list. We'll give people a chance to find it because I held it in my hand like a day or two ago. So, just give us a second. We'll get it. Who hasn't gone? Yes?

Question: What's the total homelessness spending and do you think your PEG is going to apply to the DHS [inaudible]?

Mayor: The PEG is going to apply to every agency but again it will be an individualized dollar figure. Every agency can find savings. But we're going to be sensitive to the challenges each agency faces. So, that's the broad answer. In terms of what is – the budget in terms of homelessness?

Director Hartzog: The only incremental add that we're reflecting in this plan is $25 million to the homeless budget and that is for street outreach and for drop in centers and for safe haven beds. And I can get you the full number of the total Fiscal Year '19 budget for Homeless Services in the technical briefing

Mayor: And just noting on that – those initiatives, safe havens and the outreach efforts and the drop in beds, we're seeing a real impact in terms of getting people off the street and keeping a lot of people off the street, permanent homeless folks coming and staying in. So, this is an area where – we're essentially flat as you heard on homelessness spending but this was an area we think has a big potential to change things on the street favorably and obviously to serve people in need.

Question: Are you concerned, Mayor, that if you're find these [inaudible] in savings in the Department of Homeless Services that you've been spending so much more over the last few years – are you concerned how that looks that you've been increasing spending while doing this inefficiently?

Mayor: No, I don't consider it – that to be the conclusion. First of all what you're seeing here and the fact that we had to make a lot of investments to change the approach. I mean that's what the Turning the Tide plan is which is a little under two years old. We had to make a series of investments to improve conditions in shelter, to get people off the street, and clearly the HomeStat initiative which took a lot of investment has worked and is an important part of our strategy. Investments to acquire buildings which is something we want to do more of going forward. You know there's been a host of things that we're doing and obviously building – we're in the process of building 90 shelters. All of that was, I think, structural and strategic. The very limited investment now says that we've reached some kind of equilibrium point.

But my point about agencies is even agencies that very efficient, very effective constantly can look for savings. They can work to be more efficient, more effective. Also, agencies that have started an initiative – it's one thing to start something up when you get to the doing of it over years, you should be able to find ways to do it more effectively. There's a learning curve. There's trial-and-error in some cases. So, no, I don't find that surprising and I do believe – bless you – I do believe they'll find what we need.

Question: Just some back of the envelope math – your administration is committing give or take $3 million next year and [inaudible] years to re-signaling traffic lights in the city to speed up bus service. By those numbers it would cost about $112 million to re-signal all 12,000 intersections with a traffic light in the city which is a fraction of support that the City provides for its ferry service. Two million people ride the bus every day. A few thousand people take the ferries every day. Why has the administration been so slow to invest in improvements in the bus services? And the [inaudible] making New York the fairest big city it can be, fairest big city in America – do you think sort of this dichotomy between investing hundreds of millions of dollars in ferries that benefit a few thousand riders every day while being slow [inaudible] on the bus service, sort of gets [inaudible]?

Mayor: There's a couple of different moving parts here. Historically our involvement with the bus service revolved around Select Bus Service in particular. Obviously the MTA runs the bus service. And the more we have looked at things over the years, the more we thought there were important things that we could do to contribute to improving bus service. I will be very straightforward to you – that's not something that was a front burner issue in year-one, year-two. It's not something that was a big part of the public debate.

We were not focused on it because it literally was not appearing, at least in anything I saw, as an area where we could have that kind of impact. I thought of bus service, for one, I thought MTA with the exception of Select Bus Service. But the more we have worked with the MTA, the more we have looked at the problems, the more we recognize there were ways that we could have a very big impact and we want to.

Now, I don't know about the math, honestly, because I don't know about which intersections have bus service and how frequent – one thing or another. So, I don't know what that universe would be. I do believe that the focus here is on the bus lines where it would have the biggest impact on the most riders and I think it's a very good investment.

The point about ferry service, and this is a variation on a question I have heard many, many times – I am very comfortable with where we stand on this. We cannot structurally stay where we are on mass transit. We need to improve our existing mass transit and that means MTA. The best way to do that is with a long term financing plan. That would change life in New York City. That is something we cannot achieve here in New York City. It can only be done in Albany. But would be the single, biggest best thing to do for mass transit in the city. That is not enough. I've said it many, many times. It's not enough.

If that's all we did we would not have enough mass transit going forward. We are – I think we can all agree there's very, very intense limitations on the creation of new subway lines in New York City. We are continuing to expand Select Bus Service, but you can't do that everywhere. We need more and better options. Bikes have been one of them, ferries has been another, light rail will be another. So, we are playing a long game here. We're saying, this is a city that's going to be 9 million people before long and it must have a much richer mass transit system, it must have much better options – more options – and that's why we're investing. I think it's the right thing to do for now, but I think it's even more important to do for the future.

Let me see anyone that hasn't gone yet – go ahead.

Question: You mentioned that in the upcoming budget you may need to cut – make cuts to investments and also some programs. Are there any programs that you've identified that you don't think are performing as well as they should be, or programs that would be the first in line on the chopping block?

Mayor: Well, obviously I appreciate the question, but this is not the day we're going to delineated them. I mean, do I have some concerns? Sure. I'm sure our Budget Director does too, but that's why we have a process to really go through the numbers and really scrub and see what the truth is. But my point in saying that is, we're going to look at programs where there's a concern that maybe we're not getting the impact that we expected or it's not worth investing in compared to other things that are more important. I'm not going to list a list today, but that's what this exercise is all about and I suspect that when we get to April there will be specific programs that we're telling you we've slated for change.

Anyone who hasn't gone? Let me see who hasn't gone – Katie?

Question: So, I know you just mentioned some transportation options, and this week the City approved a $7 million environmental review of the BQX. There's been a lot of critics to this because a lot of people don't see the point of this, sort of, multi-billion projected thing. I mean, given the City's financial outlook, do you think what amounts to be, I guess, like an elevated G train is an effective use of the City's funds, especially continuing along with these environmental reviews when [inaudible] seems sort of not as effective for transportation issues in the City?

Mayor: Well, obviously there's a certain amount of assumption in that question, so I'm just going to say there's clearly a deep need in that part of the City. It's – if I'm remembering my numbers right, the route covers an area that has about 400,000 people within walking distance of the line – that's an astounding number of people. Anywhere else in the country, that would be the biggest city anywhere around, you know? It's clearly an area that needs more and better options, and, as I think you know, I think the fact is – the figure is something like 40,000 public housing residents along that route. Now, what makes a difference – it's very fair to say in the context of a budget concern, how can you afford it? It is entirely different than anything else we're talking about, because the only way it happens is if there's substantial federal support and through the improvement in property tax receipts that we would expect because it exists. And that is a value-capture model, but, again, it's a city-based value-capture model where we're saying this is the correct use of value-capture because it's our own city and we believe it's the right thing to do. The exposure to the City government is limited. So, I do think it's important – we have to have more and better options. And if you look around the country, I think the going reality now – there are some places building subways, there's a lot more places that said subways are not going to be effective, the much bigger bang for the buck is light rail. We don't have it appreciably in this city. It's time to see where we can with it on top of everything else, because we need a lot more for this city to work.

Anyone that hasn't gone? Go ahead –

Question: You talked about how you're not going to undermine frontline services, but are you really going to ask the NYPD to find places to cut money? An agency that historically has never – they're always given more and more. I mean when you have to follow up and send these questions about if you have an idea of where these cuts might come from, is there really going to be cuts there?

Mayor: Sure. There's no such thing as an agency that kind find efficiencies if we're in a situation that demands them. It's choices. NYPD is doing an outstanding job. The NYPD has a lot of different elements to their work. What we're most concerned about is frontline, direct protection of every-day New Yorkers. That's going to be the piece that's going to be untouched. But there are other things they do and the question is – are there ways to do it more efficiently? It's a very normal exercise that, you know, I think most agencies find things that they can say, okay, this is something we can do without. This is something that we don't need now, maybe in the future, but we can live without it now. This is something we can do at a lower level of intensity but it still gets the job done. There's lots of ways to approach it. We're going to give agencies a chance to present their own version. If we think it's fair, great. If we think it has to be something else, OMB is very good at determining those kind of options. But this is – especially an agency that has succeeded – you know, I see your question, but I'm going to say, I think we have a stereotype in our head – a troubled agency is the place where you find savings. I would argue that an agency that has succeeded should be able to build upon that success and find more savings.

Let me see if there's anything else – go ahead.

Question: Mr. Mayor, you included $106 million for Fair Fares in Fiscal Year '20 – that's the same amount that was included in this year too. Is that correct?

Mayor: Yes.

Question: So, do we have an update in terms of how many people have enrolled in the program so far?

Mayor: The end of February – we'll do a public update on the number of people enrolled and then we'll do it at the end of every month thereafter. This is obviously a new initiative. We are building an outreach effort to go with the application process. It's going to steadily grow and as we go through the rest of the fiscal year, we'll have a really good sense of what the take-up has been.

Question: Is the $106 million just funding the actual program or is there a portion of that, that's going to be set aside to publicize the program?

Mayor: It's all – I've always seen it as combined – I mean, the administration of the program, the promotion of the program. But obviously, the main body of that money is for people to get the subsidy.

Anyone else? Going back – yes?

Question: Following up on transit-related matters, the Governor is once again pitching this congestion pricing plan. People who have looked at the plan say it would give the Tri-boro virtually unprecedented authority to do what it wants on the City's roadways in order to install a congestion pricing scheme. One of my colleagues at the Post [inaudible] called in her column a Robert Moses-esque power play. What do you make of criticism and are you comfortable with giving the authority that [inaudible] that kind of latitude over the City's infrastructure?

Mayor: No. We – there needs to be a real conversation in Albany about what's fair and we'll certainly be speaking to the Governor and the legislative leaders. You know, my bottom line has always been, we need a long-term funding plan for the MTA. Right now, I count five potential elements to that plan. I believe in a millionaire's tax, everyone knows that – congestion pricing. Internet sales tax has been talked about. Some portion of marijuana tax revenue has been talked about. A State bond act has been talked about. Five different possibilities, different combinations obviously could work – that's the crux of the matter. But as a plan is developed, it must respect the rights and prerogatives of New York City, and I'll make that very clear in Albany and I certainly expect everyone to understand that and I expect the Legislature to be particularly sensitive to that reality.


Question: On the capital budget side, a few Council members were – expressed concern that there doesn't appear to be any funding for the construction of the new jails, even though the plan goes for 10 years. Why isn't that money in the –

Mayor: So, the approval process for the four new borough-based jails will conclude in the fall, and then the design will begin right away. The money that's in the capital budget is certainly more than enough to accommodate design but, if you think about Fiscal year to Fiscal year, approval that's – I think the projection now is September, October is the approval. You're a few months into the Fiscal Year, you go right to the design process – the only thing that's going to happen in the next Fiscal Year is approval, and then design, or beginning of design. You won't have shovels in the ground. So, this is a number – it's a very substantial number, but it's still a placeholder number. When we get closer, we'll be able to put in a final number. And this is consistent with how other major initiatives have been handled. You don't expect to put the overall number in on day-one. We will get to it. But I'm confident this plan is moving forward.

Question: And I know that's been past practice, but what's the purpose of a 10-year capital plan if you don't include known costs?

Mayor: Because I think – as a layman, I would say, there's constant variability and choices that have to be made. Today, we don't have a firm estimate on that cost – that's a process we have to go through. You don't even have a design yet, there's a lot that we need to do to get to a more tangible estimate. But we also know in capital spending, that there are things that don't move forward for whatever reason. We know there are things that take longer. There is an ebb and flow. I didn't understand all of this when I started out in terms of the many interesting dynamics of budgeting, but these two fine individuals have schooled me with their teams. This is just the reality of budgeting. What we know is, the dollar figure we've put in is what we can depend on today and we know that, that flexibility is normal, and we know that the borough-based jails are going forward.

Question: You said that there won't be a broad base cut across all agencies, that it'll [inaudible] depending on the agencies. Which agencies are you asking to cut the most amount of money?

Mayor: Well again, that's the process that OMB will go through, and, by the end of this month, every agency will have their number. Clearly to some extent it depends on the size of the agency – so, you know what the biggest agencies are. But it will be with other factors too. So, I'm not going to project. OMB is charged now with coming up with the specific number for each agency. Let me give you a previous answer on our preliminary budgets. So, we have had six of them. When you add everything – and this is, again, every part of new spending, things that were strategic initiatives or things that we, for whatever reason, had to include because of, you know, various, whatever it is – legal matters, labor settlements, whatever. The increase for this preliminary budget is $499 million. The other years – I'll try and get them ordered up here. It was $545 million in the '15-'16 year; it was $690 million in the '17-'18 year; $750 million in the '18-'19 year; $833 million in the '14-'15 year; and the biggest was $1.4 billion in '16-'17.

Director Hartzog: So, that's been across two years.

Mayor: I'm sorry. My apology – that's why I'm doing the two years, just not saying it right. But the point is, the number we announce change at preliminary. I'll make it simpler even – the announced increase at preliminary, this one is $499 million, the lowest of the six years. The highest of the six years is $1.4 billion, just to give you a sense of range.

Okay, anyone else who has not gone? Okay, Sally, go ahead.

Question: I just had one other question – will agencies be able to call increased revenue from fees and fines and things like that and say – will they be able to apply that toward these totals you're giving them? Or does it have to be an actual, we spent this, this year and we're cutting it?

Director Hartzog: We've always counted on any revenue generation, whether it's for fees and fines towards the citywide savings program. So, that would count.

Mayor: It's really new. It's actually new.

Director Hartzog: Correct.

Question: So they can continue to do that?

Director Hartzog: They could.

Question: Where is the – I think it's a quarter-of-a-billion dollars next year for NYCHA – where is that?

Mayor: It's part of the settlement.

Question: [Inaudible] and then $200 million beyond that.

Mayor: It's in the capital plan.

Question: It's in the capital plan? Okay.

Mayor: Yeah, the whole play-out is in – it's the 10-year capital plan. It's the 10-year commitment.

Okay, yes?

Question: I just want to re-ask my question because I can't go to the technical briefing.

Mayor: You're going to miss a lot.


Question: Your estimate right now for the current Fiscal Year personal income tax collection is $12.4 billion. What was your forecast at adoption of personal income tax collection for this Fiscal Year?

Director Hartzog: It was $12.4 billion, but they write the change from [inaudible] to November on the incremental was $177 million down.

Question: You're actually in-line with your original forecast.

Director Hartzog: We've made an adjustment to it, as we always do as we look at each quarter and how we're doing.

Mayor: There's clearly a dissonance and I appreciate the complexity of the issue, but can we agree that we will do the technical briefing but also get Willy a clear answer afterwards that makes sense? Okay.

Last call on anything else – last call. Going once on this budget – going once, twice –

Okay. Thanks, everyone.

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