“Something’s got to give and if you wait until you’re in a crisis situation, that’s when you slash budgets and everyone suffers: the public, unions,” said Andrew Rein, the executive director of the Citizens Budget Commission.

“The pandemic was in effect the test case for some people, whether you could live and work outside of New York,” said Andrew Rein, the president of the Citizens Budget Commission, a nonprofit watchdog group. “That’s why policymakers have to think, on the tax side, whether our nation-leading taxes are going to drive people out of the state or be a barrier for people coming to the state.”

From 2010 to 2018, Nassau, Suffolk and Westchester Counties issued a combined total of just 26,175 building permits in a region of about 3.8 million people, according to an analysis of federal housing and census data by the Citizens Budget Commission, a nonpartisan group.

"The unpaid fiscal bills in the future just got bigger," said Andrew Rein, the president of the Citizens Budget Commission, who added that city employees should be asked to help pay for their health insurance. New York City is rare among public-sector employers in that it does not require municipal employees to contribute to health insurance premiums.

Historically, despite various growth caps, local governments in New York bear one of the largest Medicaid burdens when compared to the rest of the nation, according to a 2018 report by the Citizens Budget Commission.

So if applied to the rest of the city’s 300,000-plus labor force, these raises will cost taxpayers an extra $2.5 billion this year and $4.1 billion in extra annual spending by 2027, says the Citizens Budget Commission.

If the DC 37 contract sets the pattern for raises, the raises would add $16.2 billion to city spending over the next four years, the Citizens Budget Commission estimated Friday, even after deducting the amount the Adams administration has already set aside.

The 3% wage increase is significantly higher than the 1.25% figure that Adams had projected in his preliminary budget released in January. That could have major implications for the budget that the city ultimately adopts in June—the fiscal watchdog Citizens Budget Commission has projected a 3% raise would cost the city $800 million in its first year, rising as high as $2.5 billion in subsequent years, Gothamist reported.

“This is going to increase future budget gaps — in the near term by a billion dollars, but in the out years by billions of dollars,” said Andrew Rein, president of the fiscal watchdog Citizens Budget Commission. “The city has a budgetary problem. We have gaps, and this makes those gaps bigger.”

“The tentative New York City-District Council 37 contract announced today provides raises that are very reasonable given recent and anticipated inflation,” Andrew Rein, head of the Citizens Budget Commission said in a statement. “The great challenge, however, still is how the City will pay for them.”

Andrew Rein, the president of the Citizens Budget Commission, an independent fiscal watchdog, said the contract proposal served both sides well.

“This is a very reasonable middle ground that provides reasonable raises without radically blowing up the city’s budget,” he said. “Still, the very real problem is the city has identified no way to pay the billions in extra costs.” He added that comparable raises for all city workers would cost New York City $2.5 billion in this fiscal year and $2.3 billion in the next.

It is not the first time this tax credit has inspired outrage. In 2020, the Citizens Budget Commission published a report questioning the value of the tax incentive in making New York more competitive for the film industry.