Revenue in Fiscal 2019 will total roughly $88.67 billion, 2.2 percent higher than Fiscal 2018. Revenues come from a handful of sources, including local taxes, miscellaneous revenues, and state and federal categorical grants.
City taxes in Fiscal 2019 will total $60.0 billion, up 3.5 percent from Fiscal 2018. Property tax is the largest share, approximately 46 percent, and the personal income tax is the second largest share, at 20 percent.
FY19 Revenues in Preliminary Budget
FY19 Taxes in Preliminary Budget
The City’s Fiscal 2019 Preliminary Budget totals $88.67 billion, an increase of $3.4 billion when compared to the Fiscal 2018 Adopted Budget and $1.2 billion when compared to the Fiscal 2018 Budget as of the Preliminary Plan.
The planned spending growth is supported mostly by a City funds increase of $2.6 billion from the current Fiscal 2018 Budget. The City funds increase totals $3.4 billion from the Fiscal 2018 Adopted Budget to the Fiscal 2019 Preliminary Budget.
Personal Spending and Other Than Personal Spending, FY 2016 – FY 2022
Personal Services (PS) expenditures and Other Than Personal Spending (OTPS) continue to increase steadily year-over-year. Personal Services (PS) expenditures include salaries, wages, and fringe benefits, and Other Than Personal Spending (OTPS) spending, includes supplies, contracts, public assistance, medical assistance, and other non-PS related expenditures.
The Fiscal 2019 Preliminary Budget for PS and OTPS totals $85.9 billion, of which approximately 58 percent is for PS and 42 percent is for OTPS. As indicated by the graph, PS spending has grown as a share of the City’s budget from approximately 56 percent in Fiscal 2016 to 58 percent in the Preliminary Budget for Fiscal 2019.
Spending growth in Fiscal 2019 is primarily driven by PS increases for salaries, wages and fringe benefits totaling approximately $2.5 billion.
Citywide Budgeted Headcount
The City’s Fiscal 2019 Personal Services (PS) Budget of $46.4 billion for Fiscal 2019 supports 303,406 positions full-time budgeted positions and 26,818 Full-Time Equivalent Personnel (FTE).
Of these totals, 83.6 percent of full time positions and 92.3 percent of Full-Time Equivalent Personnel are City funded.
Education and public safety workers make up 73 percent of the City’s workforce.
Fiscal 2019 FT Headcount: 330,224 positions
Major Employee Groups
35,941 police officers
9,967 correction officers
7,634 sanitation workers
Salaries, Wages, and Fringe Benefits
While the Financial Plan includes a modest increase in budgeted headcount for Fiscal 2019, the City anticipates spending over $27 billion on salaries and wages in Fiscal 2019, an increase of 4.8 percent from Fiscal 2018.
Spending on salaries and wages will increase by an average of 1.3 percent annually through Fiscal 2022. These projections include wage adjustments from previous rounds of collective bargaining that have been implemented, as well as 1.0 percent annual wage increases for employees in the years beyond the current rounds of collective bargaining.
Pension expenses in the Plan reflect the impact of Fiscal 2017 investment returns of 12.95 percent (net of investment fees) – higher than the assumed actuarial rate of seven percent.
This resulted in reductions in the City’s required contribution of $140 million, $280 million, $420 million, and $560 million in Fiscal 2019 through 2022, respectively.
Other than Personal Services (OTPS) Spending
The Fiscal 2019 Preliminary OTPS Budget totals $35.6 billion. Like overall PS spending for Fiscal 2019, the DOE has the largest proportion of the City’s total OTPS budget, totaling $9.7 billion, or 27 percent.
After DOE, the Department of Social Services (DSS) has the second largest OTPS budget, totaling $9 billion, or 25 percent.
The largest overall component of OTPS spending is contractual services, and the DOE and the human services agencies – the Department of Social Services, The Department of Homeless Services, and the Administration for Children’s Services – drive this spending.
The contract budget is a subset of the City’s OTPS Budget and represents the outsourcing of the delivery of public services such as student instruction, child care, and employment training, and contractual services used to support the operation of the City government such as information technology services, cleaning, and legal services.
The Preliminary Fiscal 2019 Contract Budget is approximately $15.6 billion, representing 17 percent of the City’s total budget.
Over the last ten years, the contract budget has increased from less than 15 percent, to more than 18 percent, of the total budget.
Contracts as a Percent of Budget
Preliminary Financial Plan Actions
The City’s budget, reflecting shifting priorities and public service needs, has changed significantly during the past four years.
Over $33.3 billion in new need spending has been added to the City’s budget since the February 2014 Financial Plan, which introduced the Preliminary Fiscal 2015 Budget.
About 30 percent of this new spending was introduced in the Fiscal 2017 Financial Plans, (February 2016 through November 2016), which span Fiscal 2017 to Fiscal 2020, to support the DOE, DSS, DHS, and DOC. The cumulative value of all new needs and other adjustments (which includes savings) for each fiscal year introduced since the Preliminary Fiscal 2015 Budget to this Preliminary Plan are displayed in the next graph. This shows the relatively modest size of the changes introduced in the Fiscal 2019 Preliminary Budget.
Significant New Needs
The largest new need introduced in the Fiscal 2019 Preliminary Budget is $169 million in baselined funding for the homeless shelter spending re-estimate, of which $150 million are City funds.
This accounts for 44 percent of all new needs for the upcoming fiscal year.
New needs spending in Fiscal 2019 for DHS is disproportional to the agency’s portion of the City’s overall budget. DHS’ Fiscal 2019 Preliminary Budget totals $1.82 billion and is only two percent of the total Fiscal 2019 Preliminary Budget of $88.66 billion.
Homeless Shelter New Needs FY 2014 – FY 2021
Spending for education continues to grow in Fiscal 2019 and the outyears. Of the $1.87 billion in new needs across the Preliminary Financial Plan, 13 percent or $242 million supports education related programming. Although this amount is small compared to DOE’s overall budget of $24 billion, it is a large portion of the total new needs introduced in the Financial Plan.