Fiscal Year 2025 New York City Preliminary Budget

January 16, 2024


FROM: Cozen O’Connor Public Strategies




January 16, 2024
RE: Fiscal Year 2025 New York City Preliminary Budget


  • Mayor Eric Adams introduced a balanced $109.4B Fiscal Year 2025 (FY25) Preliminary Budget, as required by law.
  • The FY25 Preliminary Budget closed a $7.1B deficit in FY25 through a hiring freeze, revenue re-estimates and the Program to Eliminate the Gap (PEG) reductions.
  • Unlike the November Plan not every agency was subject to the same percentage PEG reduction and some agencies were held harmless from cuts completely.

The Mayor proposed the following actions to the FY25 Preliminary Budget:

Major PEG Actions ($3.1B in savings in FY24 and FY25):

  • $1.7B reduction in projected migrant costs to the City in FY24 and FY25 via the following actions
    • New 30 and 60 day limits on shelter stays is main driver of cost reduction
      • The City estimates that the growth of migrant population in the City’s care has been reduced by 60 percent due to this action.
    • Transitioning from Humanitarian Emergency Response and Relief Centers (HERRC’s) to non-profit shelter model
    • Re-negotiating emergency contracts
    • Preliminary Budget also re-estimates City spending based on increased contributions from the State of $2.4B
  • The Police Department, Fire Department, Department of Sanitation and all of the Libraries were not subject to the PEG program in the Preliminary Budget.
  • The Department of Education, Department of Social Services, Department of Youth and Community Development and Department for the Aging had their PEG targets reduced as it was determined by the Mayor that those cuts would be too impactful to the services provided by those agencies.
  • All other agencies met their PEG target.

PEG Restorations ($200M in FY24 and FY25)

  • Reinstated April 2024 Police Academy class of 600 Police Officers
  • Returned a fifth firefighter at 20 engine companies and maintained 190 firefighters pay that cannot resume full-duty
  • Restored service for 23,000 litter baskets
  • Restored the Parks Opportunity Program that offers jobs cleaning and maintaining parks
  • Funded 170 Community Schools

Additions to the Preliminary Budget

  • Department of Education
    • Increased Charter School funding ($33M in FY25 increasing to $729M in FY27)
    • Added pupil transportation funding of $265M in FY25 Funded growing to $536M in FY27)

Additions to the Preliminary Budget cont.

  • New Carter case funding of $100m in FY24 increasing to $400M in FY27)
  • Summer Rising funding change from COVID stimulus funds to City funds of $80M

Revenue Actions:

  • $3.6B increase in revenue estimates (FY24 $1.7B increase FY25 $2B increase) due to:
    • Better than expected tax revenues from a more robust economy and higher than expected Wall Street revenues



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