CBC Urges New Yorkers to Vote Yes on Ballot Question #4
Citizens Budget Commission (CBC) President Andrew Rein issued this statement on the 2019 New York City Charter Revision Commission’s Ballot Question 4 on the New York City Budget:
CBC urges New York City voters to support Ballot Question 4 to amend the New York City Charter to allow the City to create and use a Rainy Day Fund (RDF).
Ballot Question 4 provides voters a momentous opportunity to improve the City’s financial management. Current law requires a balanced budget under strict accounting rules, which prevent the City from setting aside revenues during good times to use in bad times. This amendment would allow New York City to put funds aside in an RDF—essentially a savings account—when the economy is growing and use it to stave off the most devastating service cuts and tax increases during an economic downturn or severe emergency—the “rainy days.”
Creating and using an RDF also will require commensurate changes in the New York State Financial Emergency Act (FEA), which includes a similar balanced budget requirement. It is imperative these changes limit use of the RDF to times of economic recession and severe emergency, which would ensure the RDF is not used during periods of economic growth and reflect the Commission’s intent as represented in its Staff Report and public meetings.
Question 4 includes three other proposed Charter amendments.
One proposal advances the date by which the Mayor must submit the non-property tax revenue forecast to the City Council, while the second proposal requires the Mayor to submit budget appropriation modifications within 30 days of each quarterly financial plan update. The current processes for revenue estimation and budget modification generally have served the City well and these changes may be unnecessary. Still, these proposals are reasonable and are unlikely to have a negative effect on the City’s fiscal management.
The third amendment would set minimum budgets for the Public Advocate and Borough Presidents. CBC does not support minimum or guaranteed budgets since they restrict the budgetary discretion of the executive and legislative branches. Budget guarantees also can result in increased budgets for certain offices or functions while other critical services are cut during a recession. This proposal addresses these issues by a) allowing the Mayor to propose lower budgets for the Public Advocate and Borough Presidents if accompanied by a justification; and b) having the minimum budget mirror the total city budget, rather than guaranteeing an increase.
The benefits of an RDF outweigh the problems and precedent of setting minimum budgets as proposed. Therefore, CBC supports and urges New Yorkers to approve Ballot Question 4.
More information is available in the CBC Report To Weather a Storm: Create an NYC Rainy Day Fund.