AGENCY TESTIMONY
Budgeting practices: over-budgeting and under-budgeting
1:34:23
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3 min
The IBO highlights areas of the budget characterized by a lack of transparency, focusing on over-budgeting and under-budgeting practices. They provide specific examples and recommend more accurate fiscal estimates for long-standing programs.
- Over-budgeting examples:
- Citywide staffing costs are over-budgeted by $1.2 billion
- Asylum seeker costs are estimated to be $3 billion less than the administration's projection
- Under-budgeting examples:
- Uniformed agency overtime for police, fire, sanitation, and correction
- Carter cases for students with disabilities
- City Fighting Homelessness and Eviction Prevention Supplement Program (City FHEPS)
- IBO recommends the Council press the administration for more accurate fiscal estimates, especially for long-standing and well-understood programs and costs
Louisa Chafee
1:34:23
As the City Council considers its next steps, IBO notices there are areas of the budget that are notably characterized by a lack of transparency.
1:34:33
First of all, over budgeting.
1:34:35
Areas where budget amounts are larger than current spending trends indicate are necessary, yielding savings.
1:34:42
So the Administration has $55,000,000,000 for 2024 in citywide staffing costs in the executive budget.
1:34:49
Looking at payroll data, spending on city wide personnel services costs have been far lower than budgeted.
1:34:56
Annual personnel service, known as PS, spending, especially towards the end of the fiscal year, is relatively predictable area of the budget.
1:35:05
You know who's on payroll and you know when the paychecks happen.
1:35:09
IBO estimates that the city's staffing costs are currently over budgeted by $1,200,000,000 $789 in city funds, an area of substantial savings.
1:35:20
Since May of 23, IBO has estimated lower asylum seeker costs, compared with the administration.
1:35:28
In the latest update issued last week, IBO estimates $3,000,000,000 less in city spending on asylum seekers across 2526.
1:35:38
And we'll speak much more about asylum seekers later.
1:35:41
Under budgeting, these are areas where there's a trend of adding funds over the course of the year to pay for programs expected to continue.
1:35:50
Uniformed agency over time for police fire sanitation and correction, IBO estimates an additional 605,000,000 in 2025 for personal services for police sanitation and correction.
1:36:03
Fire got it right.
1:36:04
Those are largely for uniformed overtime.
1:36:09
Another example, Carter cases.
1:36:11
Carter cases, which are, legal it's an acronym referring to families of students with disabilities enrolling in private schools and seeking tuition payment from the city, if the city can demonstrate that the schools cannot meet if the families demonstrate the schools cannot meet their need.
1:36:29
IBO estimates there is an additional 424,000,000 needed in 2025 for Carter cases.
1:36:37
And major changes to the City Fighting Homelessness and Eviction Prevention Supplement Program, known as City FEPPS.
1:36:45
For the first time since it was created in 2019, the Administration has included at least $578,000,000 for the program annually, but that's not enough.
1:36:55
IBO estimates additional needs of at least $32,000,000 in 2024 and $144,000,000 in 25 to fund current spending levels, and this does not include funds for expansions as per recent council legislation.
1:37:13
IBO recognizes that expenditures sometimes come in higher or lower than can be practically foreseen and therefore mid year adjustments to the expense budget are necessary.
1:37:23
However, other areas which reflect long standing well known programs that are expected to continue are more feasible.
1:37:31
Therefore, such expenses should be accurately projected at the onset of the fiscal year.
