Watchdog: NYC Faces Budget Gaps Of $40 Billion Through 2027

The upcoming years could potentially bring about significant financial challenges for New York City, with state Comptroller Tom DiNapoli projecting a cumulative budget deficit of $40 billion over the next four years due to surging expenses. This estimation surpasses the city’s initial forecast of a $19.8 billion deficit until 2027. However, Mayor Eric Adams’ recent announcement regarding the escalating costs associated with housing and providing care for tens of thousands of migrants might further elevate these figures.

State Comptroller Tom DiNapoli expressed concerns about the city’s fiscal stability in a review released on Thursday, analyzing the city’s 2024 adopted budget and financial plan. He pointed out that the expansion of a rental assistance program could pose impending threats to the city’s financial standing.

Mayor Eric Adams disclosed that the costs of sheltering migrants could potentially rise to an astounding $12 billion by July 2025. In response to these mounting challenges, Jonah Allon, a spokesperson for Adams, affirmed the city’s commitment to prudent financial management and the imperative of achieving budget balance, as mandated by the Charter. He emphasized the need for additional support from both state and federal partners.

The city plans to release updated assessments of future budget shortfalls in November, providing a clearer understanding of the evolving financial landscape.

Last year, the city expended $1.5 billion to cater to migrants who arrived from Southern border states and other regions. The influx of nearly 100,000 migrants since the previous spring has led to a current tally of over 57,000 migrants under the city’s care. Mayor Adams has made appeals to President Joe Biden for additional assistance; however, federal contributions have amounted to only $135 million thus far.

DiNapoli’s report highlighted the critical issue arising from the lack of policy adjustments at the federal level and a substantial matching share of funding to manage the surge of asylum seekers. The resulting fiscal dilemma for the city is unsustainable, as per DiNapoli’s assessment.

City expenses now amount to nearly $300 million per month to furnish migrants and their families with necessities such as food, shelter, medical care, and social services. These figures are projected to rise due to evolving circumstances.

Concurrently, while the attention remains on the migrant crisis, another significant financial matter has emerged concerning the substantial expansion of the city’s rental assistance program.

The City Council moved forward with expanding this program, aiming to maintain residents in permanent housing instead of homeless shelters, despite Mayor Adams’ veto. The mayor approximated the cost of this expansion to be around $17 billion over five years. However, this expense was not integrated into the city’s financial plan for June.

Enacted in May, the legislation endorsed by the council would broaden rental assistance eligibility to encompass 50% of the area’s median income—approximately $63,500 for a family of three. It would also include tenants who have received written rent demands from landlords or have ongoing cases in housing court. While the council estimates the cost to range between $7.5 billion and $10.6 billion over five years, Mayor Adams hinted at the possibility of pursuing legal action to prevent the expansion.

{Matzav.com}