De Blasio to Bail Out Public Hospitals as New York City Tax Revenue Rises

  • The health system would face a $2 billion deficit by 2020
  • $82.2 billion budget also proposes expense cuts and reserves

New York City Mayor Bill de Blasio speaks during a news conference on March 22, 2016, in New York City.

Photographer: Frank Franklin II-Pool/Getty Images

New York Mayor Bill de Blasio intends to increase the support he’s giving to the city’s money-losing public hospitals, clinics and nursing homes by $700 million, bringing the total tab to $2 billion.

The plan, part of an $82.2 billion fiscal 2017 budget the mayor will present Tuesday, would represent a 53 percent increase in spending on the hospital system since he took office. It asks the City Council to add almost $500 million this fiscal year, which ends June 30, and $180 million a year over the next four years. Another $100 million in bond-derived capital funds will go to building neighborhood health clinics. 

The Health and Hospital Corp., a system of 11 public hospitals and system of community clinics, assisted living facilities and home health care, is the largest U.S. municipal health system, serving 1.2 million people who are mostly uninsured or on Medicaid. It faces a $2 billion deficit by 2020. De Blasio said the spending increase would help stabilize the system’s finances at a time of reduced federal and state support.

“This plan will not close any more hospitals or lay off any workers, but expand comprehensive health care, especially in high-need communities,” de Blasio said in a statement prepared for the budget announcement. “We are implementing long-term sustainable solutions, rather than band-aid fixes, to stabilize hospital finances and save our public health-care system.”

Elected in 2013 as a self-described progressive who advocated taxing the rich, he’s instead worked with the real-estate industry to push for developer subsidies in return for required minimum percentages of affordable housing units in new residential construction.

By February, the city collected $723 million more revenue than officials had anticipated in November, according to a March 1 report by Comptroller Scott Stringer.

The mayor also said he saved about $2.3 billion by eliminating waste and unsuccessful programs. 

As sweeteners made possible by good times, de Blasio proposed a one-time $183 credit off a year’s water bill for 664,000 homeowners in single-to-three-family residences, and a $250 credit for 40,000 landlords operating buildings featuring “affordable apartments.”

The spending plan also calls for $1 billion in reserve funds through 2020, and a $500 million fund to protect against the risk that a spike in interest rates could cause the city’s debt service costs to soar. The mayor also set aside $250 million for a fund to pay for future employee health benefits, which would bring its total to $3.7 billion.

The 51-member City Council must approve a spending plan by June 30 after negotiations with the mayor.

(Mayor's office clarifies amounts in first and second paragraph.)
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