Budget Talks: How can the City’s FY 2021 budget shape recovery?

New York City is at a crossroads. The convergence of a public health crisis, an economic crisis of as yet unknown proportion, and a long-overdue national awakening to the reach and impact of systemic racism has led to unprecedented scrutiny of the allocation of City resources. In this time of heightened need and awareness, the New York City budget should reflect the City’s unique position as a global leader and changemaker. Fulfilling this role will require a budget that actively leverages the City’s resources and populations to create a framework for a lasting, equitable recovery.

The urgent need to support NYC’s most vulnerable communities is at odds with a City budget in crisis due to COVID-19. While many agencies faced budget cuts as part of NYC’s April Executive Budget, the first plan released since New York’s stay-at-home order was issued in March, some agencies shouldered a greater portion of the $1.5B in savings for the upcoming fiscal year than others. NYPD faced $13.8M in FY21 savings, 0.2% of its total budget for FY21 in the previous financial plan. In contrast, agencies like the Department of Social Services (DSS), the administrator of the City’s welfare programs, received a 0.5% cut, including a $6M reduction to rightsize a job training program, the Department of Small Business Services (SBS), the operator of the City’s workforce programs, a 3.7% cut, and the Department of Consumer and Worker Protection (DCWP), the City’s consumer protection bureau, a 2.7% cut. 

Many budget cuts were a result of COVID safety and economic impacts, but the division of these recent cuts considered alongside the proportion of the City budget spent on NYPD’s budget relative to other agencies has led to the $1B cut being proposed by the City Council and other requests for defunding and reallocation. In the last full fiscal year (FY19) NYPD’s total spending of $5.7B nearly matched the combined $5.9B spent by five agencies that play key roles in supporting City residents: the Department of Youth and Community Development (DYCD), the Department of Health and Mental Hygiene (DOHMH), the Department of Small Business Services (SBS), the Department of Homeless Services (DHS), and the Department of Housing Preservation and Development (HPD). 

Public Works Partners echoes the Human Service Council’s June 6th and June 10th open letters calling on the Mayor to redirect City funds into social service and employment programs. These programs are essential lifelines. Cutting such programs will be devastating, especially during this time of heightened vulnerability and need. Simultaneously, we feel that the City must also explicitly focus resources on long-term models that will create and support local economies across the City, especially in communities and neighborhoods of color that have historically seen underinvestment. A robust social services sector and a thriving economy are intricately linked; we need investment in both to create the City New Yorkers deserve.

Alongside social services, small and micro businesses are the backbone of many NYC neighborhoods. Storefront businesses, such as retail and restaurants, lend New York the vibrant street life and community it is known for and employ 1 in 5 workers outside of Manhattan. These are also the businesses that are struggling the most from the pandemic. On March 8th, Mayor De Blasio announced grants through NYC Department of Small Business Services of up to $6k for small businesses with up to 5 employees and zero interest loans of up to $75k for small businesses with up to 100 employees that had revenues dip by at least 25% over the past 60 days – but overwhelming interest in a $20M pot led to applications closing on April 5th and consequently many businesses were unable to receive support through this program. A subsequent study of the program found that the majority of the funding went to businesses within Manhattan, despite many of the hardest hit industries in NYC being concentrated outside of Manhattan. Similar issues with the federal Paycheck Protection Program (PPP) loan funding received by businesses with high market value have further aggravated the challenges businesses are facing in receiving the aid they need. 

A study from the Center for an Urban Future examined data from 13 neighborhoods City-wide where at least 20% of the working residents are employed in those industries most impacted by the pandemic, namely restaurants, hotels, retail, and personal care.  Of the 13, 11 were outside of Manhattan and all were majority non-white. Simply put, many of the people that depend most on the programs that activists and politicians are calling on the City to invest in also live in neighborhoods that have not seen substantial investment from the City and work in the industries that are struggling most. 

There is no straightforward path out of this crisis, but finding innovative and equitable ways to get unemployed New Yorkers across the City back to work is a key part of that conversation. There are many interventions that the City could make, such as:

• Providing free website development to small businesses who do not have the capacity to move their businesses online
• Investing in new and existing programs at agencies like SBS and DCWP to ensure worker protections are strengthened
• Improving opportunities for M/WBEs through EDC and MOCS, amongst other agencies doing work to strengthen existing businesses and empower new ones. 

Whatever choices the City makes, this conversation must include a critical look at how the City supports its most marginalized residents, underinvested neighborhoods, and local small businesses.