NYC Budget Clouded by `Draconian' Trump Tax Law, De Blasio Says
(Bloomberg) -- New York Mayor Bill de Blasio warned of federal and state aid cuts and the impact of President Donald Trump’s tax overhaul as he proposed a 3 percent spending increase in an $88.7 billion budget for fiscal 2019.
The Democratic mayor calculated at least $700 million in lost city aid from policies enacted by Trump and the Republican-controlled Congress: a $400 million hit to its public hospital system, $100 million from its inability to refinance tax-exempt bonds and a $200 million impact from the end of a tax credit encouraging investment in low-income housing. Another $400 million in state aid is jeopardized in Governor Andrew Cuomo’s budget, de Blasio said.
“We have no illusions about the real threats we face from D.C. and Albany,” the mayor said in a statement accompanying a budget summary. “That’s why we’re investing in our people while maintaining historic reserves and safeguarding our city’s financial future.”
The spending plan, which would take effect July 1, stakes out the mayor’s opposition to Trump in a congressional election year in which de Blasio has vowed to tour the U.S. taking the president to task for a tax plan he described Thursday as “the most draconian” in recent history. Hitting another campaign theme, the mayor described his budget as focused on “making New York the fairest big city in America.”
The budget calls for $213 million to improve public housing, which has been plagued by heating breakdowns this winter; $18 million to equip all 18,000 police patrol officers with body-worn cameras and $750 million out of the city’s $85 billion capital budget over several years to support affordable housing.
Last month, the city reported $762 million more tax revenue than anticipated when the mayor and council enacted the budget last June, bringing the total receipts to $56.6 billion.
The higher revenue reflects an economy that has experienced more than five years of record employment. In November, private economists and city and state comptrollers warned of a slowdown commencing in 2020, citing as risks downturns in the stock market and in construction.
De Blasio’s spending proposal includes reserving $1 billion for unanticipated expenses in each of the next four years, a $250 million “capital stabilization fund” to protect the city if debt-service costs rise, and a $4.25 billion trust fund to cover some of the city’s future health-insurance costs.
Savings totaling $900 million include reduced costs from refinancing municipal bonds and a partial hiring freeze in non-public safety agencies, de Blasio said.
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