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NYC Mayor Eric Adams Announces Cancellation Of Next Round Of Agency Spending Cuts As A Result Of Strong Fiscal Management, Additional Cuts To Asylum Seeker Spending, Better-Than-Expected Economic Performance

City to Implement Additional 10 Percent Savings on Budgeted City-Funded Asylum Seeker Costs in FY25 Executive Budget — On Top of 20 Percent Cut Previously Announced — While Continuing to Provide Migrants With Intensive Case Work to Build Self-Sufficient Lives 

Moody’s Investors Service Applauds Adams Administration’s for “Robust Financial Management,” “Successful Implementation of Budget Measures to Help Close Budget Gaps” 

NEW YORK – New York City Mayor Eric Adams today announced the cancellation of the Fiscal Year (FY) 2025 Executive Budget Program to Eliminate the Gap (PEG) for city agencies — a direct result of decisive actions early on by the Adams administration to stabilize the budget through continued strong fiscal management, better-than-expected economic performance in 2023 that resulted in an upward revision to the city’s tax revenue forecast, and additional cuts to asylum seeker spending. The Adams administration is more specifically cutting an additional 10 percent in budgeted city-funded asylum seeker costs on top of the successful 20 percent asylum seeker PEG in the Preliminary Budget that already saved more than $1.7 billion in city spending,  while continuing intensive case work for migrants to help them on their path to self-sufficiency. In addition to cancelling the city agency PEGs, the administration is moving from a near full hiring freeze to a 2-for-1 model and easing other than personal spending (OTPS) freeze restrictions.

Today’s announcement comes just one day after internationally recognized, independent credit rating agency Moody’s Investors Service affirmed New York City’s Aa2 issuer rating and praised the Adams administration for its “robust financial management” and the successful “implementation of budget measures to help close budget gaps…caused by the migrant crisis.”

“Our administration came into office with a mission to protect public safety, rebuild our economy, and make our city more livable for everyday New Yorkers. After two years of hard work, we are heading in the right direction: Jobs are up, crime is down, tourists are back, and we are delivering for working-class New Yorkers every day,” said Mayor Adams. “And despite facing a perfect fiscal storm that included a multi-billion-dollar budget gap driven by an asylum seeker crisis, the sunsetting of COVID-19 federal stimulus funding, and the cost of inherited outstanding labor costs, our administration was able to successfully make the strong fiscal decisions to navigate us to prosperity. The combination of our tough, but necessary financial management decisions, including cutting asylum seeker spending by billions of dollars, along with better-than-expected economic performance in 2023, is allowing us to cancel the last round of spending cuts, as well as lift the near total freezes on city hiring and other than personal spending. Make no mistake — we are not yet out of the woods, as we still need Albany and Washington, D.C. to play their roles in providing New Yorkers with additional support. But this new chapter is the result of a full collaboration across city government, our nonprofit partners, and so many others, and will allow us to continue to deliver on our mission for a safer, cleaner, more prosperous New York City for all.” 

Last summer, the city faced a multi-billion budget gap due to the growing asylum seeker crisis, drying up federal COVID-19 stimulus funding, expenses from labor contracts this administration inherited that went unresolved for years, and slowing tax revenue growth. To manage these concerns, the administration implemented PEG savings programs and a near total freeze on hiring and other than personnel spending in the November Financial Plan, as well as in the Preliminary and Executive Budgets. But, as a direct result of the Adams administration’s proactive fiscal management and decisive action, the administration achieved a record $6.6 billion in PEG savings over FY24 and FY25 in the November Financial Plan and the Preliminary Budget. This included $1.7 billion in asylum seeker PEG savings — a 20 percent cut — achieved over FY24 and FY25 by helping put migrants on a path to self-sufficiency with intensified case management and reducing the household per-diem costs of providing care.

These actions helped balance the FY25 Preliminary Budget and stabilize the city’s financial position without layoffs, tax hikes, or major disruptions to city services — and their success, along with another 10 percent in migrant spending cuts and better-than-expected tax revenue growth, have allowed the administration to restore funding for savings initiatives that are mayoral priorities related to public safety, quality of life, and young people, as well as fully cancel the FY25 Executive Budget agency PEG.

New York City has continued to effectively manage the asylum seeker humanitarian crisis largely on its own without substantial aid. To date, New York City has provided care for more than 178,600 asylum seekers, with approximately 65,000 currently still in the city’s care. The city has also provided case management, shelter, food, and more to asylum seekers; stood up navigation centers with support from community-based organizations to connect new arrivals with critical resources; and enrolled tens of thousands of school-aged children to public schools through Project Open Arms. As a result of the administration’s responsible policies — including providing 30 to 60 days of intensified case management — more than 60 percent of the asylum seekers who have come through the city’s intake center have left the city’s care and are taking the next steps in their journeys towards self-sufficiency. Additionally, as of the Preliminary Budget, daily growth of the number of migrant households in the city’s care had slowed by nearly 60 percent since the implementation of these policies. Through the Asylum Application Help Center and the city’s satellite sites, the city has helped submit more than 35,000 work authorization, temporary protected status, and asylum applications — moving asylum seekers that much closer to being able to legally work and be self-sufficient. 

February 21, 2024 New York City Hall Manhattan NY

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