Mayor Eric Adams on Tuesday ordered city agencies to slash a total of $1 billion annually from their budgets for each of the next three years, blaming the move partly on the migrant crisis.
The dire directive came one day after City Council leaders said there was $1.3 billion in extra taxpayer cash this year to offset costs and two months since the city’s Independent Budget Office projected a $4.9 billion surplus in 2023 and a $2.6 billion surplus in 2024.
City Hall dismissed council claims of a surplus Tuesday as nothing more than budget mumbo jumbo to pressure the mayor to avoid cuts — and even an IBO source said his agency would likely have to revise its glowing projection.
“Proposals in the state budget, the growing asylum-seeker costs and slowing economic growth increase are all reasons to be cautious,” the IBO source acknowledged.
State Comptroller Tom DiNapoli has already cautioned that the Big Apple’s budget deficit could rise to $13.9 billion by 2027 — double what City Hall has predicted.
The Adams administration’s new edict for cuts was spelled out in a memo obtained by The Post and sent to city agencies Tuesday by Mayor’s Office of Management and Budget Director Jacques Jiha.
Jiha justified the ordered cuts by noting the “massive strain” put on the budget by the flood of tens of thousands of migrants to the city, new labor contracts and a possible $500 million tab from the state to fund the MTA.
He said that all agencies will be subject to a 4% cut – a total of roughly $1.1 billion – every year starting July 1, the start of fiscal year 2024, through 2027, amounting to a total $4.4 billion.
Jiha said agencies must submit their proposals for the cuts by April 14 but added that “they cannot include layoffs and should avoid meaningfully impacting services where possible.
“OMB will identify savings opportunities for your respective agency if the PEG targets are not met,” he warned.
A similar order was handed down in September, followed by a November edict to leave more than 4,300 city jobs vacant — measures which Adams previously saved the city an estimated $3 billion between fiscal years 2023 and 2024.
“Working together, we overcame substantial obstacles to maintain and establish balanced budgets in FY23 and FY24 in the January Financial Plan,” Jiha wrote. “However, we have since encountered developments that place a massive strain on the city’s budget.”
The city spent $817 million on the migrant crisis between March and July 2022 and is now estimating that the total cost will rise to $4.3 billion by the end of 2024, according to the memo. More than 32,500 migrants are currently living in 106 taxpayer-funded emergency hotels, according to City Hall.
Jiha noted that neither President Biden nor Gov. Kathy Hochul’s administrations have granted “adequate” assistance requested to offset the financial burden.
The OMB director also cited the tentative contract deal with labor union DC37 that’s slated to give 3% to 3.25% raises annually to city workers through 2026.
The agreement, expected to be extended across the city’s unionized municipal workforce, is estimated to cost the Big Apple a whopping $16 billion through fiscal year 2027.
“On top of these concerns, the governor’s Executive Budget imposes cuts and cost shifts of more than $1 billion onto New York City,” wrote Jiha, noting Hochul’s not-yet-approved budget proposal, which would require the Big Apple to pay $530 million more to the MTA on top of the $2.4 billion that the city already contributes, as well as $340 million to cover a new annual cut in Medicaid.
“Shifting responsibility for the state’s costs or cutting our reimbursement levels always threatens our ability to deliver services. However, today we are dealing with substantial and unprecedented new needs, so the impact would be dire,” he said.
The missive also referred to the city’s slowing tax revenue growth and fear of an economic recession, citing a need to “act now” to “avoid disruption to programs and services that keep our city clean, safe, and healthy.”
“Mayor Adams has repeatedly said that we cannot sugarcoat the reality of the fiscal and economic challenges we are facing,” Adams spokesman Jonah Allon told The Post on Tuesday.
“While we continue to have positive conversations with our partners in Albany, we face a perfect storm of factors — including near-historic levels of spending as a result of billions of dollars in costs related to asylum seekers and the need to fund labor deals that are years overdue.”