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PUBLIC TESTIMONY
Testimony by Andrew Rein, President of Citizens Budget Commission, on Federal Funding Cuts Impact
0:37:38
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3 min
Andrew Rein, President of Citizens Budget Commission, testified about the potential impact of federal funding cuts on New York City and recommended strategies for the city to prepare and respond. He emphasized the need for proactive measures to protect critical services and build fiscal resilience.
- Highlighted the broad range and uncertain magnitude of possible federal cuts, affecting not only city government but also state agencies, NYCHA, and individual New Yorkers
- Urged the city to prepare now while resources are available, recommending steps like increasing reserves, implementing spending restraints, and improving budget accuracy
- Stressed that while the city cannot backfill all federal reductions, it should focus on preserving services critical for high-need New Yorkers, the economy, and quality of life
Andrew Rein
0:37:38
Thank you all for having me today.
0:37:41
I'm Andrew Ryan, president of the Citizens Budget Commission.
0:37:45
Thanks for your offer.
0:37:46
Good morning, chairs, and all the council members, you for the opportunity.
0:37:50
The range of possible federal cuts is broad and the magnitude uncertain.
0:37:54
Cuts and direct funding to city government will not be the only challenge.
0:37:58
Possible funding reductions will affect the state, NYCHA, health and hospitals, as well as New Yorkers who directly receive federal benefits such as SNAP and enhanced Obamacare enhanced premiums.
0:38:08
Additional additionally, regulatory changes in economic policies such as tariffs could lead to higher inflation and a greater chance of recession.
0:38:16
CBC urges a proactive forward looking response to protect New Yorkers.
0:38:20
The city should prepare now while resources remain available and flexibility remains intact.
0:38:26
Waiting for clarity on which specific risks pan out would not only be fit not be fiscally prudent, but also increase the potential harm to New Yorkers.
0:38:34
Federal aid cuts could have profound impacts.
0:38:36
Federal aid comprises 7,400,000,000.0 of the city's fiscal year twenty six preliminary budget, including funds for educating low income students, childcare vouchers, school food programs, family shelters, more.
0:38:46
NYCHA relied on 1,400,000,000.0 in federal operating support for public housing last year, while 2,700,000,000.0 in federal funds supported more than a 33,000 housing vouchers across NYCHA and the city.
0:38:58
Additionally, the state receives 91,000,000,000 from the federal government primarily for public health insurance, Medicaid, the essential plan child health plus, and education and and capital, funding for transportation.
0:39:10
In in response to federal cuts, the state may reduce aid to the city or have to slash services that directly run such as unemployment insurance and state parks, just for examples.
0:39:20
Medicaid and the essential plan cuts would also sap h and h revenues at the same time potentially increasing demand for its services if New Yorkers lose public health insurance coverage.
0:39:30
The city will not be able to backfill all federal reductions.
0:39:34
Rather, it should preserve the services that provide the most critical support for high need New Yorkers, our economy, and our quality of life.
0:39:40
The city may rightly choose to shift funds from other programs to cover federal reductions to critical critical services, meaning federally funded programs are not the only ones at risk.
0:39:50
CBC recommends that the city, one, hold the line on new spending in the executive and adopted budgets.
0:39:56
Two, buttress to the general reserve reserve with at least $1,000,000,000 next year to help absorb another 1,000,000,000 to help absorb the immediate blow of federal cuts.
0:40:06
Three, strengthen the rainy day fund by depositing at least 500,000,000 and reserve the fund for a short term emergency, or like a recession.
0:40:14
Four, implement a program to eliminate the gap to restrain spending growth, but focus on efficiency and shrinking programs that deliver less value.
0:40:21
And finally, end the budget gimmickry and present accurate reasonable estimates of expenses and revenues.
0:40:27
These recommendations are not about austerity.
0:40:29
They're designed to strategically manage risk, protect critical services New Yorkers need, and build resilience.
0:40:35
Unfortunately, it's even harder now because the city has built up spending more than it can afford.
0:40:40
In fact, in '24, we spent 1,100,000,000.0 more than we took in.
0:40:45
1,100,000,000.0 more in '24 than we took in that year if you adjust for timing.
0:40:49
So thank you very much for the opportunity to testify.
0:40:51
I'd be happy to answer any questions you might have.