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De Blasio’s Budget Raises Spending Without Big Cuts
Mayor Bill de Blasio on Thursday announced a $73.9 billion budget plan for New York City that included significant new spending on education, social services and municipal payrolls — but virtually no service cuts or new channels of revenue.
The proposal, Mr. de Blasio’s most detailed blueprint to date for the city’s fiscal future, would increase spending by 6 percent compared with last year’s plan. And it includes a long-term commitment to pay $17.8 billion in compensation, including some retroactive wages, to the city’s labor unions over a period that will stretch into the next decade.
The plan did not challenge the prevailing notion of Mr. de Blasio as a liberal Democrat intent on using budgets to right societal wrongs and improve the lot of city workers. And it lacked the tough-minded, cautionary tone of his predecessor, Michael R. Bloomberg, who regularly stressed how little money there was available to spend, and whose relationship with labor deteriorated during his final years in office.
Mr. de Blasio, for his part, hailed his plan as humane and prudent. “Part of being an honest progressive is recognizing the world as it is,” he said at a news conference in City Hall. “If you believe in the positive role of government as I do, then you need a strong and stable foundation.”
City officials said the total labor expense over several years would be reduced to less than $8 billion by tapping unused reserve funds and by cutting billions of dollars from the cost of union health care plans.
But the de Blasio administration has not explained how the health care cuts would be achieved, and it has insisted that workers’ premiums will not rise.
Some fiscal experts said on Thursday that they were uneasy about the city hinging its fiscal future on savings that remained murky.
“This is a grand experiment,” Carol Kellermann, president of the Citizens Budget Commission, said, noting that the mayor did not include specific plans for tax increases or other spending cuts to offset municipal costs. “There are a lot of unknowns about this.”
The plan is a more detailed version of a preliminary proposal the mayor unveiled in February. A final budget must be negotiated with the City Council by the new fiscal year, which begins on July 1.
The mayor’s political priorities, including the fulfillment of some campaign promises, were laced throughout the new municipal balance sheet.
Mr. de Blasio, who used the word “progressive” five times in unveiling his proposal, announced that he would be directing hundreds of millions of dollars in additional funding to the public school system, including $145 million set aside for after-school programs.
Funding for the library system will be increased by 25 percent from last year. The public-housing network will receive an additional $70 million to address security issues and a repair backlog. Student aid programs at the City University of New York were granted $20 million in funding.
And the mayor directed $29 million for traffic safety measures, including new speed cameras, speed bumps and traffic enforcement agents, in keeping with his heavily promoted “Vision Zero” plan to reduce traffic deaths.
By law, the budget for the coming fiscal year is balanced — a feat achieved in part by using a surplus left over from Mr. Bloomberg’s most recent budget.
For the fiscal year starting July 1, 2015, however, the budget is projected to show a $2.2 billion deficit, twice the size of what was anticipated in previous plans. Deficits continue to appear in the plan through 2018.
Mr. de Blasio, at the news conference, called those gaps “manageable,” adding, “We’re confident that we will be able to handle them in time.”
His aides said that, as a percentage of the city’s revenue, the deficits projected in the plan were small in comparison to those projected in previous years, and reflected more “accurate” forecasting.
Councilman Vincent M. Ignizio, a Republican of Staten Island and the Council’s minority leader, said he was not wholly convinced that the deficits were benign.
“My concern is that we are just passing along and spending money today that we may not have tomorrow, should the city go into an economic downturn again,” he said.
Much of the discussion on Thursday about the mayor’s budget focused on its large labor costs. Mr. de Blasio began his term facing negotiations with 152 municipal bargaining units, all of whose contracts had expired.
City officials said they believed they could fairly compensate the public work force while reducing fiscal shock by spreading the costs across many years. Much of the cost of retroactive pay for city teachers would not to be paid until the last years of Mr. de Blasio’s theoretical second term.
Aides to the mayor said they had cultivated a newly cooperative relationship between the city and labor negotiators, and they believed the unions would make good on a commitment to reduce their health care costs by $3.4 billion. If not, they said, the city reserved the right to enforce some of the terms.
“These savings are enforceable by arbitration,” Mr. de Blasio said. “These savings will happen. Period.”
Still, even with the health care savings, and barring a significant uptick in existing tax revenues, the city will have to find ways to offset the higher compensation for workers. “The labor agreements are not paid for,” said Nicole Gelinas, senior fellow at the Manhattan Institute.
Despite the bureaucratic nature of a budget presentation, there were moments of levity.
Mr. de Blasio found himself in the decidedly unfamiliar position of directing a PowerPoint presentation, a ritual of corporate culture more closely identified with his predecessor.
At one point, asked if he had included some wiggle room for raises, Mr. de Blasio paused and smiled.
“I’m not a wiggle room kind of guy,” the mayor said.
Marc Santora contributed reporting.
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