June 4, 2017
Mayor Bill de Blasio: Good evening, everyone. Alright well, I’m very happy to be here with all my colleagues. I want to thank all the members of the Council for the hard work over these last months, very collegial and productive process. And profound thanks to Speaker Melissa Mark-Viverito and Chair Julissa Ferreras-Copeland.
And I will say something at the beginning and something at the end that this is the last budget process for these two great leaders, and that’s going to be a loss for New York City, and I want to thank you for all you have done.
So there’s a lot of good news in this budget I want to share with you now before you hear from the Speaker and the Chair. We’ve reached a budget agreement; the budget will be approximately $85.2 billion dollars. The final details will be worked out in the next few days leading up to adoption early next week. We believe this budget continues our work in building a better a better and fairer city.
Quick overview I will present before you hear from our colleagues, again want to note a lot of hard work from the Council Members, a lot of hard work from the Council Finance staff, and of course everyone at OMB. This is a process that literally, it’s like the Macy’s Thanksgiving Parade, the start budget the day after the budget is agreed on. So, OMB has been working on year as has Council Finance and they’ve done a great job, and I want to give a special thanks to Dean Fuleihan for his leadership, well done.
Our focus throughout has been addressing the economic reality of New Yorkers. Understanding there’s still so many people in this town who have trouble making ends meet and who need a better life, that’s where we’ve made our investment. But what has been a unifying reality between the Council and the Mayoralty has been a focus on fiscal discipline. We understand what’s happening in our nation, we understand the challenges emanating from Washington DC so we have to both achieve those strategic investments while constantly being prepared for what may lay ahead. I fundamentally believe this budget has achieved both those goals.
We talked previously in the preliminary budget, in the executive budget, major new investments we’ll be making, including 3K for All, including air conditioning units for every classroom in our public schools, and crucial down payment and beginning on a major improvement for our City, the Manhattan Greenway. These are examples of things that were addressed previously. We have additional investments that were major priorities for the Council, for the administration, and some cases for both of us that will be reflected in the new budget.
Before I go into outlining some of those I want to tell you a fact that’s really important. This is – and it’s something I want to say with congratulations to everyone gathered here and all the staff. This is the earliest budget agreement in a quarter century.
The last time the budget handshake occurred this early was 1992. So a real example, and a real evidence of the fact that there was a lot of unity and partnership in this process.
We understood that we have to focus on the fiscal realities that I mentioned because no one, no one mistakes what’s happening in Washington. I think it’s fair to say it gets stranger every day, and more troubling every day. And so on the administration side and with the strong urging of the council we’ve focused on continuing to deepen our savings program. At the time of the executive budget, I reported to you that since November of 2016 through the November plan, the preliminary budget, and the executive budget we had achieved $2.8 billion dollars in savings. I will report to you know that we will be adding another $200 million dollars in savings, taking our overall savings to over $3 billion dollars. That will be achieved by $100 million dollars more in debt service savings and $100 million dollars in savings from the partial hiring freeze that we announced at the time of the executive. So now were able to put an initial dollar figure to that of approximately $100 million dollars. These reserves will be needed.
I have to say the Council over these last years has constantly focused in discussions on the need to increase reserves. And I want to give the Speaker and the Chair and all my colleagues credit. That takes a lot of big picture thinking. There’s obviously a lot of important things we would like to address and a lot of important constituencies out there but this Council is consistently come back to the fact that while we’re doing other important things we have to keep building our reserves.
And I want to credit them for that discipline and that focus. The reserves now will be the highest in the history of New York City. We will be adding to them again in this plan. This will now be four years running.
The Retiree Health Benefits Trust Fund will gain an additional $100 million, and that will be pegged at $4.2 billion. The General Reserve will receive another $200 million and will now be at $1.2 billion. And the Capital Stabilization Reserve will continue at $250 million per year over the next four years. If you annualize that for the fiscal ‘18 budget, our reserves will total $5.65 billion, by far the highest the City of New York has ever had.
There are some new investments that have been made, although in general they are not costly, we think they are going to be very important for the people of New York City. Something I’ve focused on as a parent and someone involved in our school system over the last 20 years has been the fact that we’ve never actually addressed a major gap in our school system, and that is the fact that many of our young people don’t get physical education, don’t get gym class, don’t get physical activity. And it isn’t healthy for them, and it isn’t fair that some schools have it still a number of schools don’t. You’ll see in this budget a plan to get us to 100 percent, consistent phys-ed in all our schools by the school year beginning in 2021. That means 197 schools that right now do not have permanent phys-ed facilities will have those facilities by September 2021.
And I want to say this is about the health of our children – the physical health, the mental health as well. And it’s about their ability to perform academically. A lot of our kids have been held back because they haven’t had the support of phys-ed. We think this is going to make a big difference.
We – that’s one end of the spectrum – our children. There’s also a big focus in this budget on our seniors. I have to say up front that Council fought very hard – all Council members fought hard.
Some – they all fought for the seniors, but some punch above their weight.
And so with the agreement we have reached, we will eliminate the Home Care Wait List, and will be serving 3,000 seniors a year. There are other important investments for seniors – notably, a new initiative to help caregivers. This is a growing reality as more and more seniors live longer lives that more and more families need to provide care for their elders, but they also need support in doing it. This has been a major priority for the Council. So we’ll be providing vouchers that will help caregivers to have support come into the homes and give them a break because so many people are stressed and need that help, and I congratulate the Council on that major new initiative.
We focus as well on those who have served us. And I have to say the reality of these last few days, having gone through Fleet Week and Memorial Day, a time of reflection on what our members of the Armed services do for us and what we owe our veterans. And I want to thank all of the members of the Council and I want to thank – this has been a bipartisan initiative.
Thank you, Councilman Matteo.
Are you converting them? What’s going on here.
Unknown: More time.
Mayor: Yeah, right. Give them time.
We in this city together have taken some major steps forward for our veterans, and the thing I’m particularly proud of is the effort we made together to end chronic homelessness among our veterans. And we achieved that goal.
But there’s so much more we need to do. And I preface by saying – because this is the blunt and honest truth – if our federal government – and this is totally bipartisan because it’s been true under both Democratic and Republican administrations – if our federal government had been doing all it should for our veterans, we might not have to have this part of the conversation. But once again, localities have to step up where the federal government has been absent. And there’s something we can do for our veterans, and this was a major priority for both the administration and the Council. This budget expands the property tax exemption for veterans who served in wartime. And it’s going to put money back in their pocket. And it’s what we owe our vets.
This will be an average savings of $443 per year per veteran homeowner on top of the existing exemption of $421 per year. So that’s going to be money back in the pocket of our veterans.
Another example of area where the Council and the administration both felt very strongly we needed to take action relates to our nonprofit sector, particularly when it comes to the social services – the people of New York City rely on. So much that is provided by our nonprofit sector, and over many years – probably even in decades – that sector has been underfunded in many ways. A lot of concern has been raised. We knew we had to do more. So there are major investments in this sector in the budget to provide some relief, to provide some of the resources so that nonprofit organizations can fare better, and do their work better, and have economic stability they deserved – so, a major investment in our nonprofits.
Look, once again, there’s a lot to be proud of. We’re particularly proud that it’s a balanced budget, it’s a fiscally disciplined budget, it’s a compassionate budget. But one thing we’re particularly proud of – it’s not just an on-time budget, it’s ahead of schedule. And again, credit to everyone here for that discipline and that focus to get it done.
Now, a few words in Spanish.
[Mayor de Blasio speaks in Spanish.]
With that, I want just say as I introduce the Speaker – she has been an extraordinary partner over the last four years. We knew each other well before we each assumed these roles. We knew that we had a lot of respect and trust for each other. We knew that we shared values. We didn’t know what it would be like to play these roles. We didn’t know what the times ahead would be or what the issues we’d face would be. But there was a core belief that if you share values, a lot of good things can happen. And many, many conversations over many years – mostly in agreement, sometimes not. But we always found a way to get to a good outcome, and with great support from all our colleagues. So from me, I can tell you I’ll be sorry when these four years are over because it has been such a great and positive partnership. As a progressive, I want to thank Melissa Mark-Viverito for helping to move this city in a new progressive direction. And the things she has championed are going to have a huge impact on this city for many years to come. So with that, I introduce the Speaker of the City Council, Melissa Mark-Viverito.
Mayor: We realized we had to actually do a handshake. It was very important.
Just a personal note in calling Julissa forward. Long time ago, I met Julissa, and after knowing her for awhile, I found out she had been involved in some kind of mentorship program for young leaders when she was a teenager. And I got to know her over the years, and she always impressed me. And with every passing year, she impressed me more. And I thought to myself – wow, sometimes those young leaders programs really work out. So, she is still a young leaders. And Julissa – it’s been a joy working with you in many, many different parts of our careers. But I have to say – you’ve outdone yourself as Finance Chair. You have stayed true to your values. You have stayed to the people you represent and the community you come from and never lost sight of that. But you’ve also been a wonderful example of someone who had a clear, strong vision, but also always knew how to work with all of your colleagues. And I think people have just felt good when they work with you. So again, you will be sorely missed. But you should feel very good today at the conclusion of yet another successful budget – our Finance Chair Julissa Ferreras.
Mayor: Okay. It is time for questions on this budget. Questions, questions, questions. Yes, ma’am?
Question: I didn’t hear mentioned how you came to a conclusion in terms of the money for lawyers for immigrants who are at risk or are being deported? Will that cover immigrants, lawyers for immigrants for all crimes, or just for some crimes? How did that [inaudible] –
Mayor: Let me frame it for a moment. I’ll give my views and the Speaker will give hers. Let’s talk about what we agree on first. We agree that the City of New York should help undocumented people who are facing deportation. And that’s been a strong consensus. We understand these are our fellow New Yorkers. These are families who could be torn apart. We want to be there in support. The vast majority of those cases, involved people who have either committed no crime or a very minor crime. So where there is a difference and has been a difference is regarding those very small number of people, very small number each year who are convicted of one of the offenses on our list of 170 offenses. And we have a difference on that. But it did not stop us from moving forward the pieces we do agree on which is the vast majority of this program to make sure that there is funding for those facing deportation, again the vast majority of whom have either committed a crime or only a very minor offense that’s not on that list.
Hold on, we can do this. There we go.
Speaker Melissa Mark-Viverito: We have in the City Council – we have maintained our New York Family Unity project, whole and complete. And we continue to believe that that system is a model that we would like to continue moving forward. And so, we’ve actually put money into preserve it as it is in its current form.
Question: So I’m not sure what the answer is. Is it you are going to fund lawyers who will defend immigrants –
Mayor: We are acknowledging a difference.
Mayor: No, I’m going to answer your question. We’re acknowledging a difference. And, right now, what we’ve all agreed on is there needs to be money for legal services for undocumented folks facing deportation. The issue will be resolved in the contracting process. Now, I have very strong views I’ve made clear. And the contracting process resides in the executive branch, so I’ll leave it at that.
Question: If I could follow up, [inaudible] two questions. So there’s the $10 million from the Council for the program, and the 16 that you had announced at the executive [inaudible].
Mayor: Dean Fuleihan, come on over. Don’t be shy. Don’t be shy. You’re so shy.
Director Dean Fuleihan, Office of Management and Budget: Yes, the $16 million that was in the executive budget will be part of the adopted budget.
Mayor: That was smooth. So it’s the – Dean – 16 plus 10. 16 plus 10 is 26.
Question: So the $16 million – are you saying you haven’t decided yet whether or not that will cover –
Mayor: This is an example of the phrase détente. We have – no it really is – we have a difference. The issue will be resolved in the contracting process. And the contracting process resides in the executive branch. So we’ll leave it at that.
Question: I’m sorry. But the Speaker said that they’re going to keep NYIFUP the same as it has been. So you – the Council is going to separately fund a program that has been universally covering the people [inaudible] –
Mayor: It has to be put through a contracting process.
Mayor: It has to be put through a contracting process.
Mayor: No, it still has to be put through a contracting process.
Question: [Inaudible] gone through that process before because it’s been discretionary funding from the Council, right?
Speaker Mark-Viverito: Well, I mean, you want to –
Mayor: Dean will explain the functional process to you.
Yeah, well there’s differences in life. We agree on most things.
Director Fuleihan: Right, so again – the $16 million that was in the executive budget was delineated as we did during the – as we said during the executive budget. And it deals with a huge portion of the population that had not been served. The Council is putting – is enhancing their program and putting that forward. However, it still goes through the administrative process. And it still goes through an executive contracting process through HRA. And that negotiation is still to occur. And that process will go and the Mayor was clear about the parameters that the administration has.
Speaker Mark-Viverito: I’m going to speak to this.
Our expectation as a City Council is that the program that we have put forward is going to continue and move forward in that way.
Question: So you’re going to assign the budget [inaudible] and it’s essentially going to have a TK or a details TBA in it –
Mayor: I think that’s fair.
Question: And can you explain why it is that you have this philosophical difference with the Speaker? Do you think that the immigrants that are accused of those 170 crimes –
Question: Convicted – do they not – do you feel that they do not deserve those legal services?
Mayor: I think that there may be legal services somewhere they deserve, but not with New York City taxpayer dollars. It’s just as simple as that. We have a difference. It’s just my philosophical view that that’s not where we should be putting our money. And I think we have a lot of other things we need to do with that money including the legal services for those who do not fall in that category who are the vast majority of those who need the help. It’s still a limited pot of money. I want to see it go to those who I think need the help the most.
Question: Mayor, this is presumably the most dire financial outlook the city has seen since you’ve been in office, based on kind of the outlook you’ve given us in your preliminary and executive plans –
Mayor: Let me just interrupt for a second, just to say – I really want to clarify right at the beginning of the question – it’s actually – in some ways – the least dire in terms of economic circumstances. It’s the most dire in terms of governmental circumstances. The challenge is – as we’ve discussed before – we don’t know how that’s going to shake out. So compared to the year or two at the beginning where I think we felt the economy was much more of a question mark, this is a situation where the economy is pretty strong in the scheme of things and that’s not what worries us. The projections going a few years ahead look relatively strong. It’s an X-factor in Washington, but we do not know where that is going, and that’s why I – dire may not be the right word. There’s a potential for something dire, but we don’t know if that’s what’s going to happen.
Question: But you’ve also cited slowing revenues coming into the City on taxes other than property tax. So I guess my question is –
Mayor: Slowing revenue growth.
Question: Slowing revenue growth. So my question is with that sort of [inaudible] in mind and with all the discussion today about fiscal responsibility, this budget is significantly bigger than the deal that you shook hands on a year ago. It’s bigger than the deal that you put forward. How can it be both full of savings and a responsible deal and be growing?
Mayor: Fair question. Because the reserves continue to not only be strong, but to be growing and because we continue to find greater savings all the time, and we’re moving into new areas of savings like the partial hiring freeze, and we will continue to as needed. So, the way I think I’ve come to understand budgeting through this experience over four years is – you deal with the realities you know and you prepare for the unknown. In terms of the realities we know – we have the revenue and we have to make investments for the good of the city. But we have the biggest reserves we’ve ever had. And they are ample to address anything that could happen to us in the short term. If bigger, longer term things happen, that’s why there’s constant updates in the budgeting process where we could make major course corrections if we need to.
Question: We had been promised the details about the hiring freeze.
Mayor: I’ll give you what I’ve got so far. And then Dean can jump in and we’ll have more obviously between now and adoption. $100 million. All agencies will be touched by it. Three major areas of impact. One is any newly proposed hire will be evaluated by OMB, and they will determine whether to allow it to go forward or not. And this is again – this is an administrative and managerial fields. This is not frontline service providers. The second is – lines that have not been filled, but exist in the budget already will be subject to be shut down. So the OMB will look at those lines, and they may decide in any number of cases that a line that has not been filled will be pulled back from the budget of that agency. And then lastly, delays in hiring. There may be a line that there is – a decision is worthy. But instead of hiring on one point in time, it will be delayed for the savings impact. That combination is going to net us at least $100 million.
Question: So the $100 million is a combination of all those three things. And, that’s $100 million worth of expected savings, right?
Mayor: Well, we’re convinced we will have it absolutely. For fiscal ‘18, expense budget, all agencies combined – minimum $100 million from the partial hiring freeze. Let’s see if there’s any other questions.
Any other questions, yes?
Question: Can you go back over the – what you were able to do on the nonprofit contracting? I think the dollar figure and exactly what’s in it?
Director Fuleihan: There are two, there are two provisions. Remember in the preliminary budget, we did a major wage adjustment for the not-for-profits. They had not had a wage – actually, very early in the administration. Together we did 2.5 percent wage adjustment and a minimum wage increase – funded the minimum wage increase through the $15, which is unusual. So we did that in the preliminary budget, we added three years of 2.5 percent wage increases. So it’s a two percent wage increase in ‘18, and then another two percent in ‘19, another two percent in ‘20. It’s a compounded 6.12 percent. In addition, in this, we address the other concerns that they have been raising, which includes their indirect costs. As the Speaker pointed out, we will be getting over a five-year period, to a 10 percent reimbursement – indirect reimbursement rate. That starts at roughly around $14 million and that grows almost to $90 million by the fifth year. In addition, we have a model budgeting process, which in the executive, we started with the homeless shelters at DHS. And that was a – that grows to a $36 million commitment in the executive budget. We now have expanded it and the Speaker delineated where those were. They are in the upcoming fiscal year, runway and homeless youth preventative services and adult protective services. And then we have a goal to continue that process over the next three years.
Question: Back to the $10 million for NYIFUP, did you feel that there was going to be [inaudible] that there was going to be a gap left if the Council didn’t step in and put in that money? What was part of the calculus that helped you get you there? And did you think that there was going to be a need that wasn’t going to be met?
Speaker Mark-Viverito: This – the NYIFUP program – my last year as Council Member, before my first year as Speaker, I think we had only initiated as a [inaudible] of $5,000. My first year as Speaker – I forget the amount of money we really put in – it might have been $4 million and then obviously the need grew to 6.5, which is what we had in last year’s budget. And we very clearly with the advocates, defined a program which provides services to all. And we believe that that model is one that works and we would like to definitely continue. And there was a lot of advocacy on behalf of the Council Members to maintain the program as it is. And so that is why we continue to invest in the program and actually expand it under our discretionary allocations and continue to stand by that. And again, obviously, a difference of opinion and we’re going to have toc continue engaging in those conversations. But this is a program that is very important to the Council. I personally feel very strongly about it because it is something I initiatied and fully funded under my leadership and so will be advocating strongly to maintain it as is.
Mayor: Okay, any other questions? Yes?
Question: The capital budget – my understanding is when you [inaudible] that it was increasing [inaudible] and knowing that we had this new gym initiative, universal gym classes for everyone, that seems like it has a hefty price tag, how much is the capital budget now versus what it was [inaudible]?
Director Fuleihan: So there are programs that have been added, and when we put out the financial plan, we’ll give you the details that delineate that total amount. We’re still finalizing the details.
Mayor: I think there have been several meaningful pieces, but nothing that fundamentally changes the number. I think that’s the bigger reality here.
Okay, anything else?
Unknown: Last one.
Mayor: Last one. Or last two. Go ahead.
You guys are trying to negotiate who gets it. Go ahead.
Question: We have you here – did you pressure or anyone on your staff pressure anyone on the parade committee –
Mayor: We’re talking about budget right now. Budget.
Question: You didn’t say that in the [inaudible] –
Mayor: I’m telling you, so if you have a budget question –
Question: Why not?
Mayor: Because we do this every year – we talk about the budget at the budget announcement. So one more time – does anyone have a budget question, otherwise? Wait, is there a hand out there?
Question: [Inaudible] Puerto Rican Day Parade [inaudible] –
Mayor: No, we want to talk about the budget, so –
Question: [Inaudible] to honor –
Mayor: Again, my friend, this is an annual thing we do. We talk about the budget when we have the budget handshake. So, last call?
All right, thanks, everyone.