NEW YORK — On the campaign trail, New York City Mayor Eric Adams released a sustainability blueprint. Nearly two years later, members of his team wanted to act on that roadmap with a proposal called PlaNYC, which outlines green investments and related policy proposals.

Then the city’s Office of Management and Budget, led by its director Jacques Jiha, got involved. Before the plan was released in April, OMB stripped out significant city funds, according to two people with knowledge of the move.

It’s a dynamic that has repeated itself in city government over the years, said Eric Goldstein, a director at the Natural Resources Defense Council, an organization that had advocated for many of the policies in the proposal.

“There have certainly been times when OMB is undercutting the agencies with the expertise,” he said, speaking generally about the office and not specifically about the PlaNYC funding.

Like all the budget directors before him, Jiha oversees the city’s spending plan and cashflow. But unlike any predecessor in decades, he has become one of the most powerful people in the administration.

Sometimes, that’s a problem.

“The ongoing joke is that OMB runs the city,” one city official who was granted anonymity to speak about internal dynamics told POLITICO. “But nobody is laughing.”

In the name of prepping for an uncertain fiscal future, Adams has given Jiha wide latitude to reduce spending and quash initiatives sought by others in the administration. The practice has saved the city money, but has crowded out important policy and political considerations in the process.

In turn, that imbalance has pushed the administration into several political missteps — most notably around labor and housing — that have been more harmful than any hit to the city’s bottom line.

Should the current trend continue, the mayor risks protecting the municipal purse at the expense of his own political flank, all as he approaches a critical juncture for delivering on campaign promises, establishing legacy items and convincing voters he should get another four years at the helm of the city.

City Hall, which declined to make the budget director available for an interview, said Jiha has steered the city through two financial storms — Covid-19 and the ongoing asylum-seeker crisis — and proven himself an invaluable steward of the municipal pocketbook by balancing budgets without layoffs or tax cuts in two administrations. The job of the budget director, mayoral spokesperson Jonah Allon told POLITICO, is to implement the administration’s priorities in a fiscally sound way. And in the case of PlaNYC, Jiha merely presented options. The final decision, he noted, is always up to the mayor.

Yet the cost of Adams empowering OMB at the expense of other power centers in the administration has manifested in unnecessary headaches, irked advocates and, in the most extreme scenario, city lawmakers outmaneuvering the administration so thoroughly that a simmering disagreement about housing vouchers is likely to end up in court.

Peas in a pod

On paper, Jiha seems like an ideal pick for an administration that has prided itself on the diversity of its top appointments. He was born in Haiti and immigrated to Brooklyn at the age of 21. He worked as a parking lot attendant to pay for college and graduate school before entering government at the state level. From there, he was plucked by former Mayor Bill de Blasio to be the Department of Finance commissioner and then the budget director during the previous administration.

In reality, the fit is so snug that Jiha, 65, actually shares several personality traits with the 62-year-old mayor: A strong self-assurance, a preference for French cuffs, a high tolerance for confrontation and a dim view of local lawmakers who must ratify the city’s spending plan each year.

From the outset, the mayor and Jiha appeared to be aligned. On the campaign trail, the mayor pledged to conduct annual budget-trimming exercises in his quest to make government more efficient. In Jiha, he found a willing executor of that promise.

Over the ensuing 18 months, Jiha has publicly presided over three rounds of spending reductions and a separate push to reduce the city’s headcount that are expected to save billions in the long run. The slow pace of citywide municipal hiring approvals at OMB has also contributed to reduced payroll obligations (with negative effects on service delivery, though the office announced changes meant to streamline the hiring process earlier this year).

Behind the scenes, Jiha and his department have exerted an even bigger influence, according to interviews with more than a dozen people in and out of government who are familiar with the status OMB enjoys in the Adams administration. None of them spoke on the record, a testament to Jiha’s influence.

For instance, City Hall is now employing decision memos, three people with knowledge of the change told POLITICO. The process — a hallmark of the de Blasio administration — requires top brass to sign off on a proposal before it gets to the mayor’s desk. It often peters out once OMB has its say, part of a broad authority enjoyed by the agency.

“They basically can swoop in and kill anything they want: Any project, any budget item, they can wave their OMB wand and things just go away,” said one person with knowledge of the office’s reach, who was granted anonymity by POLITICO to discuss administration dynamics. “They’re the ones with the authority to prevent us from wasting money — which is important and happens in every administration. But nothing like this, where [Jiha] is essentially setting policy.”

In several instances, those fiscal considerations have ended up costing the administration politically.

During state budget negotiations this year, for example, a group of more than 30 labor organizations formed a coalition focused on increasing the state minimum wage. For Adams, supporting the movement would have been a low-stakes way to earn points with key union allies needed for his reelection, since his support for the cause was likely to be a deciding factor in Albany.

“It would have been such a good political win for him,” said one New York City elected official, who was granted anonymity to frankly discuss the Adams administration. “You were either going to get the increase or you weren’t — so you might as well be on the right side of the issue.”

The group, Raise Up NY, advocated for the mayor to join an April 10 rally outside City Hall, two people with knowledge of the event told POLITICO. While the idea had broad support within the City Hall brain trust, including from First Deputy Mayor Sheena Wright, it was opposed by Jiha over concerns a wage hike would in turn increase costs for the city. The mayor ended up tweeting instead, ceding the political stage to state Attorney General Tish James.

“We had a great, raucous rally with unions that were part of the mayor’s electoral coalition and were strongly in favor of this,” one of the people involved with the effort told POLITICO. “It was a key point in the campaign and it would have been great to have the mayor there alongside AG James — but the Jacques stuff was definitely the wrench in the gears.”

Months later, a version of the wage increase passed anyway.

And last year, several top aides including former housing czar Jessica Katz wanted to end a rule requiring people in homeless shelters to stay there for 90 days before qualifying for housing vouchers — a way to get more people into permanent housing and free up shelter space for arriving migrants.

The idea ran into resistance from the budget office and Jiha, who persuaded Adams it would cost the city too much money, according to five people familiar with the internal dynamics at City Hall.

The fallout has been significant.

Katz resigned, in part because of the city’s handling of the 90-day rule. Lawmakers in the City Council, eager to fill the void, passed an expanded version of the policy that OMB predicts will cost the city even more money. And to get out ahead of that law, the administration went ahead with the original idea and nixed the rule anyway.

In addition, the mayor vetoed the Council bills last month, setting up a legal collision course that will dominate news cycles, unite lawmakers against the administration and distract from other priorities once the laws take effect in several months.

Allon, the mayoral spokesperson, said that Jiha must sometimes tell the mayor hard truths about the city’s financial situation, but that it is Adams who ultimately makes the call. During the most recent budget cycle, for example, the mayor personally walked back certain proposed cuts over concerns they would reduce service levels.

“Every senior city leader must sometimes make difficult recommendations to the mayor and, as the mayor’s chief financial advisor, the budget director routinely balances complex and conflicting needs, and is expected to share his expert opinion on how to achieve the administration’s goals,” Allon said in a statement. “But at the end of the day, regardless of his beliefs, he reports to the mayor who sets the policy goals and makes the final decisions.”

Indeed, the mayor is at the top of the city’s organizational chart and makes the final call about who to empower in his cabinet. The incidents are indicative of the deference he gives to Jiha — a sharp contrast to other areas of government such as the NYPD, an agency Adams knows well as a retired captain, where he routinely intervenes.

“Jacques has enormous power in the administration,” a former city official said. “Sometimes it’s a benefit. Sometimes it’s not.”

Part of the job

Budget directors are inherently cautious people. Ultimately their job is to keep the city solvent, and angering others in government who want to spend money can be an acceptable tradeoff to avoid the worst-case scenario: economic catastrophe if New York City were to run out of funds.

Over the years, the city’s number crunchers have enjoyed varying levels of influence to carry out their mission, depending on the state of the economy and the proclivities of the mayor.

After the fiscal crisis of the 70s — when the city did, in fact, run out of money — budget wonks working for former Mayor Ed Koch wielded enormous influence as the administration course corrected. De Blasio, on the other hand, presided over the longest economic expansion in the city’s history, and his OMB had less heft.

Part of the current dynamic can be attributed to troubling economic conditions down the road, which Jiha and Adams cite when explaining the motivation behind their cuts.

While a full-blown recession is growing less likely, the city’s budget gaps are nevertheless projected to be nearly $8 billion by 2027, an eyebrow-raising sum driven by a slowdown in revenue and increasing costs like services for asylum-seekers. Fiscal watchdogs believe the true shortfall is billions of dollars more.

“The takeaway,” Jiha said while testifying before the City Council in May, “is that over the next few years our resources will not grow substantially, though we must still meet vast needs.”

Any administration worth its salt, however, has several other nerve centers that contribute to a mayor’s decision making: Policy and operations people advocate for the most effective way to accomplish a goal. Political advisers build coalitions and warn against angering allies or key constituencies. The communications team works the press and advises against anything that would create a negative news cycle.

Like a tug of war, these forces are constantly trying to pull in different directions. And if one of them is allowed to consistently overpower the others, the administration can veer sharply in one direction — which lately has been toward OMB’s offices a few blocks west of City Hall.

Because none of Adams’ deputy mayors have prior experience at the budget office — De Blasio’s first deputy mayors, for example, both worked at OMB — there does not appear to be a strong counterbalance at play.

“There is something about understanding what OMB does on a day-to-day basis, the strategy and implications, that really matters,” said a former government official from a previous administration, who was granted anonymity to explain internal City Hall politics. “When Jacques is in the room, he is by far the most experienced, and there aren’t other people who have sat in, or even near, the budget director’s seat.”

Going forward, Jiha hopes to expand the reach of OMB even further.

During a May event with the Citizens Budget Commission, he outlined plans to expand a unit focused on assessing city agencies and streamlining operations when OMB believes they can be done more efficiently.

“We’re looking at all aspects of our budget to basically try to squeeze every single dollar that we can out of the system,” he said. “But ultimately, the goal is to restructure some of the operations.”

Throughout his appearance, Jiha cast both agency heads and members of the New York City Council as unsophisticated in the fiscal arts — a notion that was strongly rebuked by lawmakers — and acknowledged that a stronger focus on agency management is likely to increase friction with colleagues who already have a habit of pointing their fingers at the budget team.

“I always say if OMB did not exist, then agencies would have created OMB,” he said during the May gathering. “Because every problem is always OMB … it’s never the agencies themselves.”