We're broke

Crain's New York

 As public and private watchdogs over New York City’s fiscal health, our mandate is to alert the public when the city faces an alarming financial situation. That moment has arrived: major looming budget gaps will have serious consequences for New Yorkers, unless action is taken now.

Many New Yorkers already sense the stress given how the staggering influx of asylum seekers and migrants has strained social services and the budget. The city estimates these costs may grow next year to equal what it spends to run the sanitation and parks departments combined.

But the billions of dollars the city will spend to care for these new arrivals is only one significant contributor to the fiscal shortfall — at most, 42 percent of the Fiscal Year 2025 budget gap. Our organizations project that gap for next year could be $9.9 billion and possibly up to $13.8 billion, even with the lower estimate assuming higher tax revenues and lower migrant costs than the city’s Office of Management and Budget anticipates.

The major underlying cause of the budget gap comes from years of added and expanded city programs that — at best — were supported only for a short time by non-recurring revenue or — at worst — not funded at all. City-funded spending has increased more than 50% over the past decade while recurring revenues have not kept pace. Despite the urging of our offices, few efforts have focused on increasing efficiency or shrinking lower impact programs, which could have allowed ongoing revenue to be sufficient to avoid future cuts.

The city and its unions agreed to reasonable raises for city workers, but did not identify how the $16 billion they added to the budget will be funded. The city also used federal Covid aid and a temporary tax revenue surge from record Wall Street bonuses to fund and grow over $2.5 billion of programs, from housing vouchers to education for 3-year-olds. Spending on overtime, special education and other services also regularly exceeds the budget. We are now facing what we call a “fiscal cliff,” because when funds dry up, the budget gap expands or programs must be cut.

What to do now? Knowing a reckoning is approaching, Mayor Eric Adams has rightly called for immediate action to stabilize the budget, directing city agencies to propose one round of 5% savings and be prepared for another two, amounting to nearly 15% in total. This is not easy, and must be done right to minimize impact on critical services. And it would be a futile task if city leaders continue to add spending: Adams’ four previous savings plans were helpful, but new spending that was simultaneously added amounted to more than double the planned savings.

Assemblyman Hevesi demands accountability from city's homeless provider non-profit groups

NY Daily News

 A Queens lawmaker wants the state comptroller to take a look at the books of the city’s top homeless shelter providers.

Assemblyman Andrew Hevesi is asking Thomas DiNapoli to audit 12 nonprofits responsible for housing and helping homeless New Yorkers and probe whether taxpayer money is being spent efficiently as homelessness rates continue to climb.

Hevesi, the chair of his chamber’s social services committee, said he’s witnessed a multitude of problems plaguing shelters in recent years, including exorbitant salaries for top executives and facilities with major safety and maintenance concerns.

“While some providers use all of their resources appropriately and provide exemplary services, it is also clear that many providers are failing to achieve their mission. In fact, the overall average length of shelter stays has increased, as has the rate of clients subsequently returning after leaving,” the Democrat wrote to the comptroller in a letter obtained by the Daily News.

In January, Coalition for the Homeless found that a record number of people — nearly 64,000 — were living in city shelters. The total has fluctuated since, but as of September, there were 62,391 homeless, including 14,962 families with 22,083 children, according to the advocacy group.

More than 114,000 students in city public and charter schools — one out of every ten — was homeless during the 2018-2019 school year, according to a survey released last month by the education nonprofit Advocates for Children.

As the number of people relying on city shelters has grown, so too has the amount of issues at the facilities, Hevesi said.

“There are several providers whose services strip the dignity of their clients and put clients in dangerous situations and that shouldn’t be occurring with these huge sums of taxpayer money that we’re putting into this industry,” the lawmaker told The News.