Mayor Bill de Blasio Set to Release City Budget -- 4th update

By Mara Gay Features Dow Jones Newswires

New York Mayor Bill de Blasio rolled out his executive budget Wednesday, an $84.86 billion proposal that comes at a time when city officials are bracing for potential cuts from the Trump administration.

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The mayor's budget would add hundreds of millions to the city's reserves and increase overall spending by more than $2.7 billion from this year's adopted budget of $82.12 billion, which subsequently grew.

"There is a deep uncertainty," Mr. de Blasio said at City Hall on Wednesday. "Our job is to be vigilant. Our job is to work with members of Congress and with mayors...to protect the interests of cities."

Some budget experts said city spending under the plan is too high.

Carol Kellermann, president of the Citizens Budget Commission, a nonpartisan watchdog group, said in a statement Wednesday that "in an atmosphere of political and economic uncertainty," the budget "should have exhibited more spending restraint."

The executive budget proposal is for fiscal 2018, which begins July 1, and must be approved by the City Council.

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Even after it is adopted, the city's budget generally is readjusted several times throughout the year. This year's budget has increased $3.4 billion from its initial level to $85.5 billion.

Mr. de Blasio's plan is nearly $200 million higher than the preliminary budget he proposed in January.

City officials said the increase largely is driven by federal funds allocated under the administration of President Barack Obama but only recently received. It also includes new initiatives the mayor has proposed such as $36 million toward a plan to expand the city's free prekindergarten program to 3-year-olds.

The city's budget has steadily grown during Mr. de Blasio's first term. It is up about $15 billion from almost $70 billion in fiscal 2014, the last year it was negotiated under former Mayor Michael Bloomberg.

Mr. de Blasio, a Democrat, has used revenue from a strong economy to invest heavily in programs to fight homelessness and poverty. He also has increased the size of the city's workforce. The number of full-time and full-time equivalent city employees reached 313,092 last year, up from 297,349 under Mr. Bloomberg.

On Wednesday, the mayor said he planned to institute a partial hiring freeze, a measure he said would help protect the city's fiscal standing. The freeze, he said, primarily would affect managerial and administrative positions.

"We are in a situation that requires sustained vigilance," he said.

About 10% of the city's budget comes from federal funding. In one example of the potential impact on New York City, budget experts and city officials have said the city could lose billions of dollars in the event of the repeal of the Affordable Care Act.

Mr. de Blasio said it didn't make sense to "sit around dead in the water" waiting to see how the Trump administration and Congress would act. "We're not going to let the uncertainty in Washington stop us from doing some smart and targeted investments," he said.

The mayor also proposed a $95.9 billion 10-year capital plan, up from $83.8 billion two years ago. The capital plan, which funds infrastructure, includes investments such as $355 million to replace building facades in the city's aging public-housing system, which is home to more than 400,000 New Yorkers.

The mayor's proposal must be approved by the City Council by June 30.

Write to Mara Gay at mara.gay@wsj.com

(END) Dow Jones Newswires

April 26, 2017 20:06 ET (00:06 GMT)