Transcript: Mayor Adams Delivers Remarks to New York State Financial Control Board

August 15, 2024

Governor Kathy Hochul: Alright. Good morning everyone. I'll call the meeting to order. I reflect on the fact that this meeting has occurred for almost 50 years. So next year we'll have to really bring some champagne or I don't know if we're going to celebrate this or not. But it's been a long, long journey and I'm so grateful to all of you and the participants and your staffs and everyone who just makes sure that our city is running in a top-notch fashion. And I feel very confident that we are and I want to just look forward to this conversation as well.

The Fiscal Control Board meeting of August 15, 2024. I'm calling the meeting to order. I'd like to note that the following designated observers are in attendance today. Matthew Harnisch, observer for the speaker of the Assembly. Marc Wurzel, observer for the City Council minority leader. And at this point I'll entertain a motion to approve the minutes of the last annual board meeting which was held September 5, 2023.

Audience: So moved. Second.

Governor Hochul: All right, second. All those in favor signify by saying aye.

Audience: Aye.

Governor Hochul: Nays?

Aye's have it. Okay. The minutes were distributed before you have the motion. Okay, we have our review of the financial plan now. The next item is the financial plan for fiscal years 2025 to 2028. Mayor Adams, before I introduce you, I want to thank you for your incredible partnership that you've shown to me personally, but also the relationship between the city and the state. I don't know if it's ever been as deep as it is today. And I just think about the last time we were together.

Two weeks ago we were working hard to shut down over 1,000 illegal cannabis shops, padlocked because of our collective efforts. And I'll say this is not just good for those businesses, but it also means more money coming into the state and city coffers. And so those are just one of the ways that we're always looking to find creative opportunities for more revenue, something you're very focused on and making sure we continue to support New Yorkers. So with that, Mr. Mayor, I understand you'll present the city's four-year financial plan. Mr. Mayor.

Mayor Eric Adams: [Inaudible.] And every challenging moment, we were able to rely on you from the beginning with the subway safety plan. We're seeing record numbers of safety in our subway system to the asylum and migrant crisis. You were there when we needed to deal with the cannabis issue from housing. Just your unprecedented loyalty to the state and to this city, I cannot thank you enough. Just a clear moral compass of moving our state forward. And we would not have been able to accomplish what we've accomplished if it wasn't for the partnership, the relationship, and your leadership. And I thank you, and I think the state is in the right hands, and we're going to continue to move forward.

And I want to thank everyone that's here. And I want to acknowledge the comptroller of the State of New York, Tom DiNapoli, and comptroller of New York City, Brad Lander, and the private members of a true New Yorker, Dean Fuleihan, for your commitment in the state and in the city. The Marjorie Henning and William Thompson, Jr., a former comptroller as well. So I think if anyone knows how well I've done, you do.

So I want to thank all the members. And I'm really proud to have who has really showed the steady hand and the right leadership, Jacques Jiha. Jacques has navigated the challenging times that we've had to experience here in the City of New York. His relationship with Albany, his relationship with all of the agencies, he has just really showed the leadership that we needed during these very difficult times. We took office, had a clear promise. Public safety is a prerequisite to prosperity. I'm going to say that over and over again. And we wanted to address the concerns of everyday New Yorkers in general, but specifically working class people.

For far too long, they felt as though they did not have a future in this city. And we wanted to be clear and focus on giving them that future they deserve. And the city must become more affordable. And because we have delivered on those promises, I'm happy to report that the city's fiscal outlook is strong. New York is the safest big city in America. The safest big city in America. And this is true on our streets and in our subway system. When you look at the record level of safety, it is extremely impressive.

Crime overall fell for the seventh consecutive month in July with notable declines in burglaries. And our NYCHA developments are safer today than they were last year. And we have taken over 17,600 illegal guns off the streets since the start of the administration. And launched a $500 million blueprint to keep communities safe from gun violence, which would have both helped police shooters across the city by double digits, bringing down those shooters. The city has also seen six straight months of double digit drops in several crimes since we directed the NYPD to search offices in the subway system. Going back to the subway safety plan that the governor led us on, and we're seeing true results because of that plan. Aside from the pandemic related issues, major crime in the subways are at the lowest level in 14 years.

And to battle the scourge of illegal cannabis shops, thanks to the powers that we received from the state, our administration's Operation Padlock to Protect has already padlocked over 900 illegal smoke shops and seized nearly $60 million in illegal products. Crime is down, jobs are up. Don't let anyone tell you anything other than that. Crime down, jobs are up. And if I was in the right setting, I would have us all chant that together, because that's how successful we've been. And I could not be prouder of the jobs in the city. We now have a record high of 4.76 million jobs, nearly 46,000 above the pre-pandemic level. 334,000 of those jobs were created under this administration. And since we took office, something that troubled me from day one, black and brown unemployment was hurting the city.

Black unemployment was almost four times the rate of white unemployment, so we zeroed in on it. We knew that we had to be specific and focused. We decreased black and Hispanic unemployment by close to 30 percent, to 7.3 percent for black unemployment, the lowest figure in half a decade, and 6.5 percent for Latino unemployment.

Our administration has additionally broken the record for the most small businesses in our city's history. The most small businesses in our city's history. On top of historic job and business growth, we are keeping the city more affordable for working class New Yorkers. The earned income tax credit we helped push through Albany has generated $345 million in tax credits for over 746,000 low to moderate income New Yorkers, especially parents with children. This put an average of $345 back in the pockets to offset the rising cost of housing, food, and health care.

We are also wiping out $2 billion in medical debt for qualified low income and severely debt burdened New Yorkers. One of the number one causes of going into bankruptcy is medical debt. We're hitting it straight on and addressing the issue. And more New Yorkers than ever before have access to a low cost MetroCard as part of the Fair Fares program. We help CUNY meet the financial challenge of adjusting to declining enrollment. And to address a generational housing crisis, we have only shattered affordable housing records in the last two years, including financing the most affordable housing in one year, but also have the largest affordable housing plan in city history, which will help us hit our moonshot goal of building 500,000 units of new homes by 2032.

And to make it easy for families to get by, we reduced the cost of subsidized child care. This was so important to our administration. For a family earning $55 a year, child care went from $55 a week is now down to just $5 a week. We'll continue to work to give every child who wants an early child education and seed access to one. We're moving towards that goal, and we will accomplish that goal.

Further, our city is becoming cleaner and greener. Day after day, consumer spending remains strong, and we expect to welcome a record level of 68 million tourists to our city. And every time I meet them, I tell them the same thing, spend money, spend money. We want the money right here. Our success is not an accident. Simply put, it's a product of the strong fiscal management this administration has practiced since day one. This includes carefully estimating tax revenues so that we live within our means, staying focused on achieving savings, using taxpayers' dollars efficiently, and monitoring spending. From day one, that was my mission and that was my goal.

Our administration has had to do what everyday homeowners are doing, and that is managing the money we spend. There's no great example of effective and responsible fiscal management than the actions we took managing the tremendous challenges we face this budget cycle. Unprecedented. This includes the cost of housing and caring for more than 212,000 migrants and asylum seekers. Since the spring of 2022, nearly 64,000 of which are still in city's care with very limited assistance from the federal government. We accomplished this by being smart and by ensuring we had real programs in place, particularly our 30-day program that was in place for single adults. New Yorkers cannot sustain people coming from anywhere on the globe staying as long as they want on New Yorkers' dime. That makes no sense, and we were not going to tolerate that.

We had to address budget cliffs caused by expiring stimulus dollars that had been used to fund long-term programs. Previous administration put in place stimulus dollars for permanent programs that were sunsetting, and we had to figure out how to keep those programs going and getting it accomplished and getting it done, and we did. And finally, we had to adjust costs related to setting labor agreements with hard-working city employees that had gone years without a fair share. One union in particular, the ferryboat operators, was over 13 years without a contract. Our police officers were not getting a contract. DC-37 employees were leaving the city because they were not being afforded the right salaries to stay here in the city.

We changed that mindset, and over 95 percent of our contracts are settled, and with almost 96 to 97 percent ratification rates from those city employees and unions, they can stay in the city that they're making better and safer every day. This all occurred against the backdrop of a slowdown in tax revenue, so we acted early. Day one, I crafted a plan and made tough decisions. That's what leadership does, tough decisions. We implemented 5 percent PEGs in both the November plan and January plan on agency spending, as well as a 30 percent reduction in asylum seeker spending and took steps to rein in spending.

These actions, along with the economy that has outperformed, that has performed better than expected, enabled us to close a historically large $7.1 billion gap in January and stabilize the city's finances. I mean, could I have done this without the state help? As I indicated, the governor has stepped up with us in a huge way, and I want to thank her for committing more than $3 billion directly to the city to fund the cost of housing and caring for asylum seekers with substantially reduced strain on the budget.

Because we stabilized the city's fiscal outlook, we were able to restore a small number of PEG savings initiatives and relax the hiring and spending freeze. And I also want to emphasize this. We accomplished this unlike other municipalities. When the African-American mayors came to the city, they were amazed that we were able to do this without major cuts to services, raising taxes by a single penny, laying off employees, and reducing our reserves. That has not happened across the country, but it has happened here.

We were able to do it without layoffs, without increasing taxes, and maintaining a strong reserve. The adopted budget that was released in June continues the critical work we have done throughout the budget cycle to manage our way through unprecedented challenges and avoided crises. The fiscal year 25 budget remains balanced at $112.4 billion. Out-year gaps are manageable at $5.5 billion, $5.6 billion, and $6.5 billion in fiscal years 26 through 28, respectively. We balanced the budget with a combination of savings and better-than-expected revenues. The adopted budget also achieved savings of nearly $400 million over fiscal year 24 and 25, driven by almost $300 million in debt service savings.

Total savings over the two years in this budget cycle is $7.9 billion prior to restoration, driven by our two PEG saving plans as well as Asylum Seeker PEGs in the preliminary and executive budget that brought migrant-related costs down by nearly 30 percent. We also recognized higher-than-anticipated revenues over the same two fiscal years, reflecting better-than-anticipated business and property taxes.

However, it is important to note that contrary to what many have incorrectly suggested about surging tax revenues, the growth in fiscal year 24 was essentially flat at about half a percent, or just around $400 million over fiscal year 23. Strong fiscal management includes more than just achieving savings and controlling spending. This year, we have maintained a near-record $8.2 billion in reserves. As stimulus funding expires this fall and education budget gaps have reduced, communities across the country face the terrible reality of laying off teachers to make ends meet. But not in this city. We have not laid off one teacher. And we're going to continue to be fiscally smart.

Because we made the tough decisions early and managed our way to stable fiscal positions, we were able to protect more than $600 million in critical programs that were funded with stimulus money. As a result, in New York, we have not laid off our educators, our police officers, and our governmental employees. Further, we were able to make restorations and substantial investments in critical areas that invest in the programs and services New Yorkers want and deserve. And most importantly, that address the three things that cost them the most. Housing, childcare, and healthcare. We also made substantial investments in cultural organizations, libraries, parks, public safety, transit, and more.

In closing, over the past two and a half years, we've had to make tough decisions, but necessary decisions because we have faced extraordinary challenges. And if you are working or wondering whether the path we took was correct, if you think we made the right decision, if you think we were able to bring our city through these challenging fiscal times from COVID to migrants to asylum seekers to crime, don't listen to the noise. Listen to the experts. Moody's Investor Services, S&P Global Ratings, Fitch Ratings, and Kroll Bond Rating Agency, they have all praised our strong fiscal management, reported that our fiscal outlook is positive, and have maintained our excellent bond ratings.

This administration's motivation goes far beyond just meeting the legal and fiduciary responsibilities to balance the budget. By managing the city resources responsibly and effectively, we have made sure the city agencies have the resources to meet the needs of New Yorkers, including the most vulnerable in our community. We are focused on building a city that works for all New Yorkers. A city that expands opportunity and prosperity to every neighbor, every neighborhood, and every borough. A city that is safer, greener, cleaner, and more affordable for working class New Yorkers. A city that little Eric Adams right now in the third grade somewhere will know they will have an opportunity to one day to be the mayor of this great city. I thank you. Our fiscal strength is strong.

Governor Hochul: Thank you, mayor, for your incredible leadership in the city, but also your responsible stewardship of the finances, which is the topic of conversation here today. We really appreciate that.

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