New York City Mayor Eric Adams said on Wednesday he was canceling an expected third round of agency spending cuts and allowing agencies to restart some hiring — a move he said was possible due to higher-than-anticipated tax revenues and new, additional cuts to spending on migrants.
But he warned the city was “not yet out of the woods” and still needs state and federal assistance to address the migrant influx, which is approaching its second year.
“Despite facing a perfect fiscal storm that included a multi-billion-dollar budget gap driven by an asylum seeker crisis, the sunsetting of COVID-19 federal stimulus funding, and the cost of inherited outstanding labor costs, our administration was able to successfully make the strong fiscal decisions to navigate us to prosperity,” Adams said in a statement.
The now-canceled third round of cuts were targeted at 5% of agency spending in hopes of saving as much as $4.1 billion, according to City Hall officials. Most of the previous two rounds of 5% cuts — announced in November and January — remain, although Adams had recently walked some of those back too.
The administration said the additional 10% in migrant spending cuts would save $586 million over the next two years. Those savings, which come on top of a 20% cut ordered last year, will be realized by reworking previous emergency contracts and transitioning toward using nonprofit providers, rather than private companies, to care for migrants.
Some fiscal watchdogs have argued for months that the mayor’s budget projections were overly grim. Last week, the city’s Independent Budget Office released an analysis that found the city would see a higher budget surplus and lower costs, including for migrant services, than the Adams administration had forecast.
City Hall’s updated revenue projections have come more in line with the IBO’s analysis. The administration said part of its rationale in retracting the third round of spending cuts was a $2.9 billion…
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