New York City FY 23 Preliminary Budget Analysis

Categories: New York City

New York City FY 23 Preliminary Budget Analysis image


On February 16, Mayor Adams released the FY 23 Preliminary Budget, totaling $98.5 billion, $4 billion less than the current fiscal year.

The Network is deeply disappointed in the proposed budget’s lack of investment in supportive and affordable housing capital, which falls significantly short of the $4 billion the Mayor promised while campaigning. We are also distressed that our homelessness and housing communities’ call for increased staffing at HPD, DHS and DSS have not been heeded – a lack of investment that will have a deleterious impact on our ongoing homelessness and housing crisis.  And we are disheartened that two years into the pandemic with supportive housing providers experiencing chronic staffing shortages that the Mayor has not seen fit to match the state’s 5.4% COLA for city-funded contracts.

We will continue to analyze the budget and its impact on supportive housing and our members, as well as how the State budget interacts with the City budget.

HPD Capital

The HPD capital budget totals $1.5 billion for the current fiscal year (FY 22) and $1.7 billion for FY 23, which is flat funding. The Network has joined United for Housing in calling for a $4 billion investment in affordable housing, including $2.5 billion for HPD, focusing on the households with the greatest need. Mayor Adams committed to this investment on the campaign trail but did not deliver in the preliminary budget.

Staffing at Key Agencies and Programs to Eliminate the Gaps (PEG)

In January, Mayor Adams announced that most City agencies would be required to find 3% savings as part of Programs to Eliminate the Gap (PEG). The Department of Health and Mental Hygiene (DOHMH) has been held harmless from the PEG in the midst of an ongoing response to Covid-19.

The Department of Social Services (DSS, which includes HRA and HASA) identified $41.8 million in savings for the remainder of FY 22 and $8.5 million for FY 23 through underspending, accruals, and headcount reduction, as well as program re-estimates for substance abuse programs and mental health at domestic violence shelters. The budget proposes to reduce headcount there by 62 staff.

The Department of Homeless Services (DHS) identified $45.8 million in savings for the remainder of FY 22 and $62.7 million for FY 23. These savings were achieved through headcount reduction, hotel shelter closings, and re-estimates for programs such as shelter repair and respite beds. The proposed budget reduces headcount at DHS by 131 staff.

The Department of Housing Preservation and Development (HPD) identified $31.2 million in savings for the remainder of FY 22 and $4.7 million for FY 23, achieved through headcount reduction as well as re-estimates of revenues and some cost reductions. HPD’s headcount was reduced by 28.

HPD also reallocated $3.7 million in NYC 15/15 rental assistance in FY 23 that had been over estimated in the previous projected budget, and does not appear to have an impact on existing pipeline.

Human Services Contract Increases/COLA

While the State Executive Budget included a 5.4% increase across most human services contracts, the City included no increases for our essential workforce. We are continuing to investigate how the State increases will flow down to the supportive housing contracts that are City contracted but include State funding.

Scattered Site Supportive Housing Contracts

Older supportive housing contracts, especially scattered site, have been underfunded for years and have become increasingly at risk as rents have risen steadily. The preliminary budget, however, maintains flat funding.

Mental Health Crisis Response

No new funding was added in this preliminary budget for mental health crisis response.

Indirect Cost Rate Initiative

Last year, the Network fought to restore cuts to the Indirect Cost Rate initiative, which was ultimately fully funded. It appears that no cuts were made to the initiative in this budget.

Moving On

This budget adds $800,000 in FY 23 to HPD’s expense budget for the Moving On program, which enables supportive housing tenants to move to fully independent housing in the community if they no longer need on-site social services.

Fair Futures

$13.4 million was added in the Administration for Children’s Services (ACS) budget for FY 23 and baselined going forward for Fair Futures. This program provides coaching and support for youth aging out of foster care.

Preliminary budget hearings are expected to begin in the City Council in March and we will continue to advocate for our priorities leading up to the Executive Budget this spring and the final budget adoption on July 1st.

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