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AGENCY TESTIMONY
IBO's key takeaways and concerns about the executive budget
5:29:36
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158 sec
The IBO emphasizes three main takeaways from their report, highlighting the need to increase the city's reserve funds and addressing concerns about budget practices.
- Stresses the importance of increasing city reserves due to potential federal funding cuts and policy changes
- Points out that New York State's policy choices have passed fiscal pressure to the city, particularly in areas like childcare and education funding
- Criticizes the administration's budget practices, including under-budgeting for certain expenses and over-reliance on prepayments
- Highlights delays in payments to nonprofit providers, with over $1 billion in unpaid invoices
- Concludes that given these uncertainties, it's difficult to describe the executive budget as 'the best budget ever'
Louisa Chafee
5:29:36
So back to our report.
5:29:38
Given this situation, IBO emphasizes three takeaways.
5:29:42
The first is given the scale of federal funding cuts combined with decisions to slash academic funding, implement severe limitations on immigration, and impose huge and erratic tariffs, the time to increase the city's reserve fund is now.
5:30:00
Two, this New York state's policy choices have passed fiscal pressure to the city.
5:30:06
Only 328,000,000 for child care vouchers was funded, approximately one third of the 1,000,000,000 requested by the administration.
5:30:16
In addition, New York State's foundation aid formula resulted in smaller increases for the New York City Department of Education.
5:30:25
So in addition to needing to find city funds to accommodate those state choices, the time to increase the city's reserve funds is now.
5:30:36
Lastly, the administration continues budget practices that increase internal risks.
5:30:41
These take the form of under budgeting, whether it be for uniformed overtime, which is at $658,000,000 addition in 2026, or the Department of Education's due process cases, formerly known as Carter cases, for $258,000,000 additional, or shelter provision, rental and cash assistance, which are collectively at 1,400,000,000.0 in 2026, and or over budgeting, where under the two for one hiring policy, the city has, quote, achieved savings both directly on personnel, 924,000,025, but also by reducing capacity to spend on other programmatic funds.
5:31:23
A continued dependence on prepayment to offset next year's expenditures.
5:31:29
And remember, the proportion of prepayment continues to shrink each year making this mechanism less and less effective.
5:31:38
Further, delays in payments to the nonprofit providers.
5:31:44
The city controller's estimate anticipates over 1,000,000,000 currently in unpaid invoices.
5:31:52
So that's providers under contract without their bills being paid.
5:31:57
So again, the time to increase the city's reserve funds is now.
5:32:01
Given these three areas of uncertainty, it's hard to describe this executive budget as the best budget ever.
5:32:09
Thank you for the opportunity to testify and we are happy to answer any questions.