NEW YORK — Days after declaring the migrant crisis would destroy New York City, Mayor Eric Adams warned agency heads they must slash their budgets by 15 percent by next spring to compensate for increasing asylum-seeker costs.
The cuts, larger than any in recent history, are liable to generate outrage from city lawmakers, the institutional left and commissioners themselves — and appeared to double as a pressure campaign aimed at Albany and the federal government to help with the influx of more than 100,000 migrants since last year.
In a Saturday morning meeting with commissioners and budget officials, Adams indicated each agency will need to trim 5 percent from their spending by the time the Office of Management and Budget releases its next fiscal update in November, according to two people with knowledge of the mandate who were granted anonymity to discuss the city's plans.
Commissioners will then be on the hook for another 5 percent reduction in January, when the preliminary budget plan comes out, and a third round once the spring budget update is released in April.
Adams said that the cuts won’t include layoffs and that agencies should attempt to limit the impact to city services. However, the mayor’s savings plan also includes a hiring freeze, the people with knowledge of the briefing said — a component not mentioned in the mayor’s official announcement.
“The simple truth is that longtime New Yorkers and asylum-seekers will feel these potential cuts — and they will hurt,” Adams said in a prepared speech that coincided with a City Hall press release released Saturday. “New Yorkers are angry and frustrated, and they’re right to be. I am too.”
Agency performance has already been hurt by staffing vacancies that run well into the double digits for some departments — a problem that could only be exacerbated by cutting off new hires.
The city has projected the cost of the migrant crisis will rise to $12 billion by the 2025 fiscal year. And in his video address, Adams sought to place the blame for the spending reductions far afield from City Hall, suggesting the cuts could be reversed if the city received more aid from Gov. Kathy Hochul and the feds.
“These tough decisions are a direct result of inaction in Washington and in Albany,” he said. “But the die is not yet cast. We can still avoid these cuts if Washington and Albany do their part by paying their fair share.”
In addition to outside aid, the economy could also perform better than expected, which would reduce the need for belt-tightening. The City Council's revenue estimates, for example, are often higher than those from City Hall. The administration is not considering any tax increases, a spokesperson said.
A formal letter from Budget Director Jacques Jiha with the details is expected to be sent next week.
City officials were already expecting further cuts before Saturday's briefing.
Both the state and city comptrollers have projected the city has a $10 billion gap to close in its operating budget for fiscal year 2025, which begins July 1, with projected spending significantly outpacing expected revenue. And that shortfall is likely an underestimation, they noted, because it does not include the expected increase in costs for housing and caring for migrants.
State Comptroller Tom DiNapoli projects even larger budget gaps in the out years — $13 billion in fiscal year 2026 and $16 billion in fiscal year 2027.
The rising cost of housing and serving the migrants who have come to New York City in the past year is part of the reason for the gaps.
But Adams has also settled pricey contracts with the vast majority of the city’s labor force over the last year. Additionally, the city is facing fiscal cliffs, with initiatives that were reliant on the increased federal funding during the height of the Covid-19 pandemic now running out.