June 20 (Bloomberg) -- New York Mayor Bill de Blasio reached a $75 billion budget agreement with the City Council that puts civilians in police desk jobs to free hundreds of officers for crime patrols and provides free lunches to middle-school students.
The deal, for the fiscal year beginning July 1, came late yesterday after more than a month of negotiation over funding of public housing community centers, services for seniors and youth, and ways to increase police presence in the most populous U.S. city.
Sealed with a handshake between de Blasio and Council Speaker Melissa Mark-Viverito at City Hall, the agreement reflects confidence that the city’s economy will grow enough to provide the increased revenue needed to close a $2.6 billion budget gap for fiscal 2016 with deficits of about $2 billion and $3 billion in the following two years.
“It signals a new direction for New York City,” de Blasio said of the spending plan at a press briefing. “We know this is going to be a moment of major progress, the beginning of many other steps we will be taking to help the people of this city.”
De Blasio, 53, the first Democrat elected to run New York in 20 years, has attracted national attention for what he described as a “progressive agenda” that includes construction or preservation of 200,000 affordable-housing units, rent subsidies and universal, all-day pre-kindergarten. The budget also devotes $17.5 million to creating 10,700 summer youth jobs, the mayor said.
“This budget process was substantive and thorough, and the result is an on-time and balanced budget that reflects the needs New Yorkers face in public safety, employment, education, health and infrastructure,” Mark-Viverito said.
De Blasio opposed Mark-Viverito’s call for adding 1,000 police officers to the department’s 35,000-member force and instead agreed to a $6.2 million compromise in which 200 civilians would be hired to replace officers now in desk jobs, freeing them for crime fighting.
“Civilianization at the NYPD,” de Blasio said, will “get those cops out to the streets where they can help protect people.”
With his first budget behind him, de Blasio intends to travel to Dallas this weekend to address the U.S. Conference of Mayors on “Creating Cities of Opportunity.”
De Blasio, who took office in January, introduced a $74 billion spending plan last month along with terms of a contract settlement with the 110,000-member United Federation of Teachers. That agreement includes two years of retroactive, 4-percent pay increases and additional raises totaling 10 percentage points.
Using the terms of the deal as a pattern for contracts with the city’s 150 other municipal unions would cost about $17.8 billion through 2021, the mayor has said.
The labor expenses would be partly offset by $3.5 billion already in the city budget to pay salary increases, $1 billion from a joint union-city administered health-benefits stabilization fund, and at least $3.4 billion in unspecified health-care savings.
Although the labor contracts’ potential fiscal impact led some investors, including UBS Global Asset Management Americas Inc., to reduce holdings of city debt, demand was stronger than anticipated for New York bonds sold last week, said Alan Anders, deputy director for finance in the Office of Management and Budget.
Interest in last week’s sale led the city to increase its offer of general-obligation bonds by about 18 percent to $1 billion, with investors placing almost four times as many orders for debt maturing in 2032 than was available, Anders said.
The refinancing of higher-cost bonds will save about $100 million in the fiscal year beginning July 1, Anders said. The city has the third-highest credit grade from the three major rating firms.
To contact the reporter on this story: Henry Goldman in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Stephen Merelman at email@example.com Pete Young, Andrew Davis