Eric Adams demands another 3% shave from agency budgets

New York City Mayor Eric Adams sought another round of belt-tightening from his department heads on Monday, ordering them to find 3% savings in their current budgets – on top of the 3%, many were asked to trim off his first spending plan.

In addition to what amounts to a 6% austerity measure, Adams is asking agency heads to save 4.75% in each subsequent year until 2026.

Moreover, unlike the first wave of austerity, the latest measures will affect the NYPD, the Correction Department, and the Department of Health.

Adams attributed the necessity for the additional steps to fiscal headwinds that the city and fiscal watchdogs foresee.

“We currently face new costs that will increase the city’s obligations by billions of dollars, including growing pension contributions, expiring labor contracts, and rising health care expenses,” Adams said.

“In response, we are asking every city agency to tighten its belt without laying off a single employee or reducing services. This Program to Eliminate the Gap savings plan is strong and decisive action that will protect both the city’s financial outlook and funding for critical programs and services, promote efficient government operations, and protect the city’s long-term financial stability,” Adams added.

Unlike the first Program to Eliminate the Gap, or PEG, that Adams unveiled in his first adopted budget in June, this one will include several agencies that were initially spared, according to an official familiar with the plan, including the NYPD, the Correction Department, the Department of Health and Health and Hospitals, and others.

Adams’ Budget Director Jacques Jiha lays out the city’s challenges in further detail in communication to city department heads, listing off a list of factors that could harm the city’s economy.

First, according to Jiha, the stock market “was down significantly” in 2022. Second, “most of the city’s labor contracts have expired or are about to expire,” he writes.

In addition, he warned the agency chiefs that health care expenses are rising, inflation is still a concern, and the city has had to house hundreds of new asylum seekers in recent weeks.