Mayor Adams orders $2.1B migrant crisis spending cut, spares NYPD, FDNY and DSNY from next budget trim

NEW YORK — Mayor Eric Adams will spare the NYPD, the FDNY and the Sanitation Department from another planned round of budget cuts — but is ordering his administration to figure out a way to slash $2.1 billion in projected spending on housing and services for newly-arrived migrants, according to a new memo from City Hall.

The memo, penned by Jacques Jiha, Adams’ budget director, was sent to all agency heads Monday morning. It comes days after the Adams administration rolled out the mayor’s November financial plan modification, which would enact deep budget cuts across all agencies as part of a 5% city government-wide spending reduction first ordered in September due to migrant crisis-related fiscal concerns.

While all agencies managed to come up with plans to meet the 5% spending reduction target from September, the administration “must do more” to rein in cost as the city’s still staring down a $7.1 billion deficit for the 2025 fiscal year, which starts July 1, Jiha wrote in the memo, a copy of which was obtained by the Daily News.

To that end, Jiha wrote the administration will proceed with implementing another 5% city government-wide spending trim in January via a so-called Program to Eliminate the Gap, or PEG. Agencies must submit their plans for how to meet the January PEG target by Dec. 8, Jiha added.

“I truly wish that there were other, less painful, ways to address this budget crisis,” Jiha wrote to agency heads.

Unlike the September directive — which mandated cuts at all city agencies — the NYPD, the FDNY and the Sanitation Department won’t have to participate in the January PEG out of concern that additional budget cuts at those departments “could impact public safety, health and cleanliness,” according to Jiha.

While those three agencies are exempt, Jiha wrote in his missive that the administration is implementing another, even more drastic belt-tightening initiative on top of the January PEG that’s specifically aimed at cutting costs related to caring for newly-arrived migrants.

That additional initiative, which The News first reported last week was forthcoming, will require the administration to slash projected spending on sheltering and providing services for migrants by 20% in the current 2024 fiscal year, which started this past July 1 and runs through June 30, 2024, Jiha wrote. According to its own projections, the administration is on track to spend $4.7 billion on migrant crisis response in the 2024 fiscal year, meaning the mayor’s team will need to shave that price-tag by $940 million to comply with the 20% savings directive.

Jiha wrote that the same PEG will also require a 20% spending reduction on migrant crisis costs in fiscal year 2025, which runs from July 1, 2024 through June 30, 2025. With the administration projecting to spend $5.9 billion on migrant crisis response in fiscal year 2025, that translates to another $1.18 billion cut, for a total trim of roughly $2.12 billion by mid-2025.

Jiha did not elaborate on how exactly the administration will achieve such a large migrant crisis spending cut, but said Adams’ new Office of Asylum Seeker Operations will lead the charge on developing a plan. His letter did say the administration can generate savings from continuing to “reduce the length of shelter stays” for migrants, which has been a priority for the mayor since he implemented policies earlier this year limiting consecutive stays to 30 days for single adult migrants and 60 days for migrant families with kids.

Among the city agencies spending the most on migrant crisis response are the Departments of Homeless Services, Housing Preservation and Development, Emergency Management and Health + Hospitals.

Adams spokesman Charles Lutvak wouldn’t say whether the planned migrant crisis budget cuts will involve shuttering emergency shelters. Lutvak reiterated, though, that the administration must come up with a plan for plugging the $7.1 billion budget hole for the 2025 fiscal year by mid-January, when the mayor is supposed to release his first draft for the next city government budget.

“We must close an unprecedented budget gap in just two months, and without the significant and timely support we need from Albany and Washington, we will be forced to find even more savings,” Lutvak said. “Our state and federal partners can help stave off these cuts by providing the funding necessary to support vital city services.”

According to the latest data from City Hall, nearly 66,000 mostly Latin American migrants remain housed in city shelters, costing the administration millions of dollars every week.

Democratic leaders in the City Council — who could block some of the spending cuts sought by the mayor — have for months raised concern that Adams’ administration is overspending on migrant crisis response by relying on for-profit contractors for shelter services. The city has historically relied on non-profits in outsourcing such services.

Asked about the planned 20% migrant crisis spending cut, Brooklyn Councilman Justin Brannan, a Democrat who chairs the Council’s Finance Committee, said he has sympathy for the fact that Adams’ administration isn’t receiving enough monetary aid from the federal government to tackle the migrant crisis.

But Brannan said the for-profit contracting model the administration’s relying on isn’t doing the city any favors.

“Without real help from D.C., the administration has relied on expensive emergency contracts with for-profit companies that cost the city billions of dollars for migrant care and now the bill is due,” he said. “We need a full accounting of these costs and a long-term plan.”

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