Statement of Council Member Dan Garodnick on New York City's FY2013 Budget
The City Council will pass the Fiscal Year 2013 budget tonight. As a seven-year member of the Council’s Budget Negotiation Team, I want to recognize the dedicated work and advocacy of Speaker Quinn and my colleagues to ensure that we have a budget that restores critical funds for child care slots, after school programs, libraries, firehouses, cultural institutions, and other worthy initiatives.
While I will vote in support of this budget, I must raise a word of caution about where we are headed.
This year’s budget relies extensively on “one-shots,” to the tune of more than $2 billion, which has the benefit of allowing us to bring it into balance without tax increases or major layoffs. For example, it relies on a total of $605 million from Science Applications International Corporation and ING Bank for their legal settlements with the City. It is my sincere hope, and should be our expectation, that we will not see settlements of this size as a factor in future budgets. This year’s budget also assumes $635 million from the sale of new taxi medallions. However, given that the courts are currently deciding the fate of the mayor’s taxi plan, its success is unclear, and may require us to make significant mid-year cuts to address the loss of this revenue.
We also lean on another $1 billion from the Retiree Health Benefits Trust Fund. I should note that our unfunded post-employment benefit liability for city retirees, not including pension costs, is $84 billion. That is why it was so important for us to start putting dollars aside for this purpose in 2006. Those obligations will come due, and we always need to remember that we have a large and continuing responsibility to our retired City workers. There is not enough left in that fund to make an impact for future “one-shots” beyond next year, and certainly not enough to satisfy our retirees’ health care needs.
One-shots can have a place in the budget process, particularly in times of emergency, like right after September 11. Unfortunately, we are running the risk of becoming too reliant on this tool. We will face budget gaps in the coming fiscal years – $2.5 billion in 2014, and over $3 billion in 2015 – and I feel certain that the state and federal governments will not be increasing funding to New York City for the foreseeable future.
Relying on one-shots is not a sustainable budgeting practice. The Council and the Mayor must work together to ensure that future budgets do not depend so significantly on one-shot deals.