Mayor Adams is expected to release an updated fiscal forecast Tuesday showing the city’s on track to rake in well over $2 billion more in tax revenue than what his team previously estimated — a revision that’s likely to fuel calls for the mayor to undo some of his unpopular budget cuts to city services, according to two sources briefed on the matter.
The revised projection from the mayor’s Office of Management and Budget — which covers the current 2024 fiscal year through the end of the 2025 fiscal year — is even rosier than forecasts from the City Council.
The Council’s last projection, released in December, predicted the city would pull in $1.5 billion more in tax revenue over the same period as compared to the projection the Office of Management and Budget unveiled last spring. Adams’ administration relied on that OMB projection throughout last year to make budgetary decisions.
Council Democrats have argued the higher tax revenues they predicted should allow the city to avert deep budget cuts pushed by the mayor that have forced the city’s libraries to close all their branches on Sundays, among various other reductions in public services.
The mayor counters the cuts are necessary to offset the billions of dollars the city has already spent to provide housing and services for newly-arrived migrants.
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Migrants line up outside a migrant re-ticketing center at St. Brigid School on E. 7th St. Friday, Jan. 5, 2024 in Manhattan. (Barry Williams for New York Daily News)
But the fact that OMB’s updated projection is expected to show the city will take in even more revenue than what the Council estimated prompted a city government official to question the need for some of the mayor’s cuts as well as the trustworthiness of the Office of Management and Budget.
“Undercounting revenue by such vast amounts is not reasonably conservative, it is extreme and undermines credibility in budget management,” the official, who spoke on condition of anonymity for fear of angering OMB and the mayor, told the Daily News. “New revenue numbers of this great of a differential would call into question the need for the most extreme of the mayor’s mid-year cuts and justify restorations.”
A spokesman for the mayor did not immediately comment Monday. Adams recently said his office makes conservative revenue projections as a way of bracing itself for worst-case-scenarios.
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Jacques Jiha, Mayor Adams’ director of the Office of Management and Budget, is pictured showing a budget document during the mayor’s weekly press conference at City Hall, Tuesday November 21, 2023. (Luiz C. Ribeiro for NY Daily News)
The new OMB revenue forecast — which covers personal income, property, sales and business taxes — is expected to be released Tuesday along with Adams’ preliminary budget proposal for the 2025 fiscal year. The rollout of that document marks the starting point for months of negotiations between the mayor and the Council before the two sides must finalize a 2025 fiscal year budget by July 1.
Last week, Adams told reporters his budget team is indeed expecting “better than anticipated” tax revenue, but would not elaborate on a specific dollar figure.
The sources familiar with the updated OMB forecast said they did not know the exact dollar figure of it, but confirmed it’ll be significantly over $2 billion higher than the previous OMB projection.
In tandem with saying revenue estimates are looking better than initially thought, Adams last week reversed some of his budget cuts, including a cancelation of a Police Academy class and a decrease in funding for community schools.
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New officers take the oath of office during New York City’s Police Academy graduation at Madison Square Garden Friday, Dec. 29, 2023, in Manhattan, New York. (Barry Williams for New York Daily News)
The mayor also announced Sunday he won’t subject the city’s three public library systems to additional cuts that would force them to end Saturday service as well.
Still, a plethora of cuts to city agencies implemented by the mayor in November remain in place, including the funding reduction that resulted in libraries having to end Sunday service.
The cuts are deeply unpopular among New Yorkers, and contributed to Adams receiving a 28% approval rating in a Quinnipiac University poll released last month. That marked the lowest approval rating of a New York City mayor ever registered by Quinnipiac since it started the poll in 1996.
It was not immediately clear what additional cuts, if any, the mayor may reverse or cancel as part of Tuesday’s budget announcement.
Brooklyn Councilman Justin Brannan, a Democrat who chairs the Council’s Finance Committee, said in a statement last week that the mayor’s pattern of announcing cuts and then rolling them back is a sign of a larger problem.
“This is not sound governance or budget management, and it should leave New Yorkers with more questions than answers,” Brannan said. “People deserve a better and more honest accounting of the financial challenges we face. Let’s stop playing budget games and actually prioritize the needs of New Yorkers.”
