NYC’s Budget Watchdog: The Adams Administration Is Overstating the City’s Budget Woes (Again)

Last month, Mayor Eric Adams backed off some future budget cuts for the City. It turns out his administration had grossly underestimated incoming tax revenue to the tune of $2 billion. His assertion that asylum seekers would "destroy" the City and overwhelm its budget were overblown. But the damage was already done—in anticipation of a budget shortfall, library hours were cut, food disappeared off of school menus, and the City instituted a painful hiring freeze that has left people waiting on food benefits processing hungry. 

Now, the City's Independent Budget Office (IBO) says the Adams administration is once again underestimating how much money is in the City's coffers, even as the mayor threatens to make cuts to parks, early education, and sanitation.

According to a report released by the IBO on Thursday, the City should see $900 million more tax revenue than the Adams administration has forecast. It will also spend $2.4 billion less on asylum seekers than the mayor said it would. 

The IBO also stated the City should have a $3.3 billion surplus in the coming fiscal year 2025, compared with a fully balanced budget the administration is predicting.

While the IBO says the City will have a surplus this year, it's currently projecting deficits in fiscal years 2026 and 2027. That's because despite all the mayor's cuts, the City's budget is going to keep increasing, driven in large part by skyrocketing costs on overtime spending by the NYPD, FDNY, DSNY, and the Correction Department.

The IBO analysis also found that even though the mayor's hiring freezes have ultimately helped the City save money, it has also negatively impacted services to New Yorkers, like repairs at NYCHA and the placement of eligible homeless families into available permanent housing. (Notably the IBO analysis did not include any additional spending that would occur if the City Council's expansion of city housing vouchers is eventually implemented by City Hall). 

The City's 2024 budget must be passed by the end of June, with months of negotiations set to take place between City Hall and a City Council that's increasingly finding itself at odds with the mayor. The state's own budget is due in April, which will most likely include additional money for the City to help pay for services and housing for migrants. Given the IBO's estimates, last year's seemingly needless cuts, and the prospects of billions in aid heading the City's way, it will be harder than ever for the Adams administration to justify its reasons for being hellbent on austerity.

"This only underscores the need for our budget process to be based on a set of shared facts that accurately portray the city’s economic and budget outlook, which have been missing from some past financial plans," Mara Davis, a spokesperson for City Council Speaker Adrienne Adams, told Bloomberg. 

City Hall did not respond to a request for comment, but in the past has been dismissive of IBO's estimates, which are meant to inform lawmakers, independent of the interference of City Hall.

Last year, Deputy Mayor for Communications Fabien Levy called the IBO "wildly inaccurate" in its estimate of the costs for asylum-seekers, as City Hall's own no-bid spending on contractors spiraled out of control.