New York leaders agree on $112B city budget after bruising debate

NEW YORK — New York City Mayor Eric Adams and the head of the City Council agreed on a $112.4 billion budget Friday, ending months of conflict over cuts that dragged the mayor’s approval ratings to record lows.

The handshake deal, which comes just days before the fiscal year is set to begin July 1, assumes about $800 million more in revenue compared to the previous iteration of the spending blueprint released in April . That additional cash allowed the two sides to avoid proposed cuts to libraries, cultural institutions and early childhood education.

“We have done our job,” Mayor Adams said at a press conference Friday at City Hall, “and will continue to do our job the right way and deliver for the people of this city, working class people who have often been ignored.”

The budget, which must pass the Council before Monday, also earmarks an additional $2 billion in capital funding for affordable housing over the next two years.

But not all of the cuts, proposed by the mayor last fall, were reversed.

Reductions to the City University of New York remained. And while the mayor and Council restored roughly $20 million for early childhood education, the program still faced a $150 million shortfall compared to the spending plan from the previous year — a gulf that is likely to generate further outcry from advocate organizations that have panned City Hall’s fiscal strategy.

Yet much of Adams’ spending reductions were the result of less controversial measures, like lower-than-expected health care spending by city employees. In other words: The restorations announced this week made up a small slice of the more than $7 billion in savings combined between last year’s budget and one announced Friday, last year’s budget, yet triggered an outsized political headache for Adams.

The source of that migraine can be traced to overly dour revenue projections from the city’s budget office — a power center with few checks in the Adams administration.

Last fall, both the mayor and his budget director warned of a potential recession and the cost of housing tens of thousands of migrants from the southern border. Based on that foreboding future, Adams issued a September decree mandating agency heads trim spending by a total of 15 percent over the course of the following seven months.

Adams and his budget office maintained the decision was necessary to keep the city solvent in a worst-case scenario.

But the edict proved to be both overly cautious and politically toxic.

A December Quinnipiac University poll found the mayor with record-low support — with weakness even among a key constituency from his 2021 election — driven by concerns over budget cuts. A broad coalition of affected organizations, advocacy groups and lawmakers from the council expressed discontent. And the mayor did himself no favors by seeming to relish a fight with the city’s library system, which cut Sunday service in response to the spending reduction mandate.

By January, City Hall began to course correct. In a preliminary budget plan released that month, the administration revised revenue projections up so dramatically that it was able to call off some of the planned spending reductions and reverse others.

Throughout the process, members of the City Council argued that there was enough revenue to avoid many of the cuts altogether. Thursday’s announcement not only vindicated their arguments, but capped a bitter negotiating process in which they won concessions from the Adams administration without having to give up anything at the bargaining table.

“We believed in the strength of this city and its resilient economy,” said Council Speaker Adrienne Adams, who is not related to Eric Adams, at the press conference Friday. She praised Council economists who “correctly guided” them.

“We were clear about the challenges, but we were also clear that we have the resources to invest in New Yorkers and protect what they rely on,” she added.

It was all smiles in the City Hall rotunda Friday, as the mayor walked in holding a model airplane — a nod to his previous comments that “AA Airlines,” as he’s dubbed his partnership with Speaker Adams, would “land the plane” on the budget.

While the spending reductions have presented a major threat to the mayor’s standing among his base as he fundraises for his 2025 reelection campaign, the Citizens Budget Commission, a nonprofit that argues for fiscal restraint, said the money saved from the cuts last fiscal year and in the upcoming year were essential to keeping the budget balanced.

“We did over $7.9 billion in savings. We restored $349 million,” the mayor said Friday. “We showed fiscal responsibility.”

Madina Touré contributed to this report.