The City Council is expected Wednesday to approve a $92.8 billion budget financial watchdogs say is unusual for excluding how to pay for some big-ticket items — a move likened to writing blank checks.
The Council vote will take place just days after Mayor Bill de Blasio and Council Speaker Corey Johnson hugged at City Hall on Friday to confirm an agreement they said creates a balanced budget — even as they acknowledged three looming unpaid bills.
The unfunded items include moving non-profit pre-K employees toward pay parity with Department of Education staffers, pushing public defenders toward equal footing with city government attorneys, and boosting the reimbursement rate for the overhead costs of social service providers.
City officials committed to settling those bills in the fiscal year that starts on July 1, but haven’t accounted for the expenses in the city’s ledger, which, by law, must be balanced.
“These are sort of like blank check TBDs that are out there,” said Ana Champeny, of the fiscal monitoring group the Citizens Budget Commission. “Some of these items can be potentially expensive, and the question becomes what if the revenues aren’t there to support that increased spending.”
Millions in Unfunded Items
The items were all prioritized by the City Council in its April 9 response to the mayor’s preliminary budget, and included a rough price tag for each.
The Council called for $89 million to address a gap of $17,000 in starting salary between non-profit pre-K teachers and DOE pre-K teachers. The pay gap widens to roughly $36,000 after 10 years of service, the Council documents say.
The Council also sought $15 million to begin moving roughly 1,500 public service lawyers working under city contracts toward wage parity with government lawyers.
The Council requested at least $106 million in the 2020 fiscal year to push the ceiling for reimbursement of social service providers’ indirect costs from 10% to 12%. But Johnson’s agreement last week with de Blasio would allow the non-profits to submit their full indirect costs for reimbursement.
City Hall officials say the budget’s loose ends aren’t any different than how the city deals with pending labor contracts, where assigning a dollar figure in budget documents ahead of time would tip the government’s hand.
Labor Talks on Tap
They noted that both pay parity agreements will require labor negotiations between the workers and the city vendors.
“We agreed on a framework to get it done but we couldn’t do all the specifics because it’s going to require a detailed negotiation,” the mayor told NY1 earlier this week. “And when we finally figure out what makes sense to do and what the timing will be, what the dollar figures will be, we will put it into the budget and we’ll find the money.
“Either if we’re blessed enough to have some more revenue, or if we don’t we’re going to have to find it from savings — but we will find it,” he added.
Johnson told THE CITY Tuesday the full tab of pay parity is likely considerably higher than the Council’s budget response estimates, but that those costs won’t have to be paid in full up front.
“I’m not concerned about the balanced-budget issue only because we took care of it for this year,” he said. “The mayor said they can identify savings to achieve some of this and like many other labor negotiations, there could be health care savings…and this could be phased in over a period of years.”
Johnson said he’s also eager to resolve in the coming fiscal year longstanding payment-delay issues that have been contributing to the financial challenges of social service nonprofits.
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