New York City Strikes $107 Billion Budget Deal That Cuts Funding for Rikers, Homeless

(Bloomberg) -- New York City Mayor Eric Adams and city council speaker Adrienne Adams struck a deal Thursday on a record $107 billion budget as the biggest US city struggles to handle the unexpected cost of caring for thousands of asylum-seekers.

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The deal, which comes as the city faces a potentially deteriorating economic climate, will cut some funding for Rikers Island and homeless services. Expected future budget gaps have been exacerbated by the cost to settle outstanding labor contracts with the city’s roughly 300,000 unionized workers, as well as the extraordinary costs associated with the 81,000 asylum-seekers who have flooded the city over the past year.

“These budget negotiations were not easy and in fact were uniquely challenging because of how much it focused on restoring cuts to so many important programs,” council speaker Adams said in a press conference.

This year’s budget negotiations were more contentious than last, when both the mayor and much of the council were in their first year in office and rushed to an agreement several weeks before the deadline. Council members were later criticized for the spending plan, which cut more than $200 million in education funding.

This year, Mayor Adams has sought agency-wide spending cuts as the costs to shelter asylum-seekers balloons. The city estimates the cost of caring for tens of thousands of people will surpass $4.3 billion by next July.

“There are many things we could have done” with the $1.4 billion spent over last year on the migrants, the mayor said. Asylum-seekers are prevented from working for 180 days from the time they file their paperwork.

Meanwhile, budget watchdogs are warning that a potential recession coupled with the lingering phenomenon of remote work will dampen income tax revenue from high earners and property tax revenue from commercial properties, depriving the city of funds while expenses continue to grow.

Council members and city officials have publicly sparred over the mayor’s proposed cuts to libraries, the City University of New York, and early childhood education. Council members and other city elected officials, including comptroller Brad Lander, have also raised concerns over the double-digit vacancy rates in city jobs, which they have said will lead to compromised city services.

The deal announced Thursday restores $36 million in funding to the city’s libraries, appeasing one of the council’s biggest concerns. It’s also added money back for senior meals and swimming lessons, and added $20 million to city’s fair fares program for subsidies for metro cards.

Mayor Adams said Thursday that the services cut at Rikers Island, which focused on rehabilitation of detainees, can be provided in-house rather than by consultants.

Another point of contention has been the city’s spending on the homeless, which includes its vast and still growing population of asylum-seekers from South and Central America, many of whom have been moved to the city by bus or airplane from Texas and other states.

The budget cut $29 million for homeless services, according to a person with knowledge of the talks. The number of homeless people living in New York reached 100,000 this month, the highest number since the city began keeping records.

Lander said in a statement that the cuts at Rikers are “short-sighted,” while criticizing the administration’s failure to fund legal services to help asylum-seekers file their claims. Instead, he recommended a four-year plan for “phasing out some non-mission critical programs and operations.”

Read more: NYC Pays Over $300 a Night for Holiday Inn Rooms for Migrants

In recent weeks, the mayor vetoed council legislation to undo requirements for the homeless to spend 90 days in city shelter facilities before becoming eligible for housing vouchers that would enable them to find subsidized rentals. The veto was only the second he has issued since taking office in January 2022.

Adams instead issued his own executive order undoing the 90-day requirement that implemented a new work requirement for the subsidies, a move criticized by housing advocates and the council.

--With assistance from Fola Akinnibi.

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