This article originally appeared as an op-ed in the New York Daily News.

Mayor Adams has called for drastic cuts to city operations, including police, schools and other services. 

But in overstating the financial threat and underestimating the city’s ability to respond to it, the mayor is unnecessarily turning a budget problem into a fiscal and service crisis.


While there are multiple issues, the largest underlying problem and the biggest unanticipated costs come from the city’s projection of the ultimate costs of dealing with asylum seekers — nearly $11 billion over two years.


Unfortunately, both the size of this projected influx and its associated costs have drawn very little real scrutiny. 

The city’s Independent Budget Office earlier this year looked at a variety of possible scenarios covering the potential number of new asylum seekers and the cost of their care. 

Even the IBO’s most pessimistic cost assumptions were lower than the city’s projection by nearly half a billion dollars over two years. 

The administration has added its unverified projections of asylum costs to the projected budget gap for next year, bringing that gap to more than $7 billion.

Left unsaid is the fact that this “out-year budget gap” is an artifact of the city’s budget process. 

Because the city routinely overemphasizes projected spending and underestimates future revenues, the multi-billion-dollar annual projected budget gap inevitably becomes a budget surplus by the time the books are eventually closed on that budget year.


For example, at the end of fiscal 2023 the city had nearly $8.3 billion more than it had projected in tax collections and other revenues, while many expenses had come in well below what the city was expecting. 

The $4.3 billion gap the city had projected in January 2021 turned into a $5.5 billion surplus.
In fiscal 2022, unanticipated revenues totaled $9.7 billion, while pension and administrative expenses were $1.5 billion under projections and debt service costs were more than $300 million less than the city had planned. 

The $5 billion gap that the city had projected in April 2020 miraculously turned into a $6.1 billion surplus.


This process is far from new. As the state’s Fiscal Policy Institute noted in 2023, “Every year for the past 10 years, projected budget gaps were completely eliminated as revenue came in over projections” and “the presence of routine budget gaps does not reflect a structural fiscal imbalance and may not require quickly-made and damaging cuts to services.”


The administration’s poor-mouthing also ignores the fact that the city’s admitted reserves, thanks in part to a generous increase in state aid for education, were at an historic $8.3 billion in 2023.

In addition to being more realistic about both reserve levels and revenue projections, the administration should also invite a real independent audit of how the city is spending its aid to asylum seekers, now spread out among more than 20 city agencies.

The asylum seekers do present the city with a fiscal challenge — but it’s hard to justify making it the fiscal emergency the administration has claimed, particularly given the fact that the amounts at risk are a relatively small percentage of the overall city budget of well more than $100 billion.


And even while the city is predicting fiscal doom, the local economy remains strong.

Last September the city had 4,709,400 public and private jobs, the most ever recorded, a number the mayor himself cited in claiming that the New York economy is back from the effects of the pandemic.


The mayor often challenges his critics to come up with solutions rather than complaints. 

Potential tax reforms that would raise revenue range from closing the “carried interest” loophole that favors the owners of private equity and hedge funds to a variety of breaks associated with real estate investments.

Hundreds of millions of dollars, for instance, could be realized by taxing at full market value the roughly 75,000 vacant condos and co-ops a recent federal survey found in Manhattan’s priciest neighborhoods. Often bought for cash by limited liability corporations or in the name of agents or front companies, these are in fact investments by individuals — many from outside the U.S. — taking advantage of the way New York’s current property tax system undervalues certain co-op and condo apartments.


Meanwhile many condo- and co-op owners from Flatbush, New Springville and Arthur Ave. pay a significantly higher tax rate than do many of these absentee owners.


Other states, including Florida, charge out-of-state owners higher real estate taxes than residents pay, but New York has so far resisted this sensible measure.

Another advantage of this approach is that it is immune to the often-cited threat that higher taxes will cause the affluent to flee the taxing jurisdiction.
The thousands of owners of these investments-disguised as-homes can’t leave New York. They don’t live here anyway.