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De Blasio Seeks to Limit NYC Spending With State Facing Deficit

Henry Goldman

(Bloomberg) -- New York Mayor Bill de Blasio proposed a 2.7% increase in the city budget to $95.3 billion for next fiscal year, reflecting an effort to control costs amid uncertainty about the impact of a $6 billion state deficit.

The task of balancing the budget for the year ending June 30, 2021, was eased by a 4.6% increase in tax revenue over last year’s budget, de Blasio said as he presented a preliminary spending plan on Thursday. Officials expect revenue to increase 2% next year, a recognition that local and national economic growth are slowing, the mayor said in a fact sheet.

The state’s $6 billion projected deficit is due in part to $4 billion in unanticipated Medicaid costs, Governor Andrew Cuomo has said. The mayor said he’s opposed to any state cost-cutting that would reduce support for the city’s public-hospital system, which has reduced its own expenses while serving 1 million patients a year.

“Medicaid cuts could reverse years of progress,” de Blasio said in a prepared statement. “We will work with our partners in Albany to continue to find savings while fighting to protect health care.”

The city intends to spend about $147 million more on wage and benefit increases this year and next for uniformed workers as their contracts are negotiated; $106 million under a deal with the City Council to subsidize low-income subway and bus fares; $98 million in capital funds for safety improvements; and more than $210 million to improve resiliency and access to city beaches and coastal areas.

Another $13 million will be spent on construction of community centers in public housing complexes, the mayor’s office said.

The mayor criticized the state’s Metropolitan Transportation Authority for demanding more city subsidies for mass transit, including $3 billion to the MTA’s $52 billion capital plan and about $100 million to its Access-a-Ride service for disabled passengers.

The spending plan sets aside $1 billion in reserve funds, $250 million in a “capital reserve fund” to guard against unanticipated debt-service expenses, and a total of $4.7 billion in a Retiree Health Benefit Trust Fund, of which $3.6 billion has been salted away during the six years de Blasio has been mayor.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Stacie Sherman

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