The Council invests in a range of projects, programs, and services to make sure New Yorkers, and the neighborhoods they sustain, can thrive. We make these commitments as we also take innovative steps to identify savings, safeguard the financial future of our city, and put more money back in the hands of taxpayers.
Increasing the City’s “Rainy Day” Funds
The Council understands the importance of strong reserves for the City to help navigate the ebbs and flows of the economy. Strong reserves help ensure that vital services are maintained during economic downturns while minimizing the need for any tax increases or layoffs. For this reason, the Council again successfully called for the reserves to be increased as part of the Fiscal Year 2018 (FY18) budget process, resulting in an additional $300 million. This takes the City’s reserves to $9.8 billion, over 10 percent of New York’s total budget.
Fixing Antiquated Laws
As part of the recommendations of the Council’s Retail Diversity Report, the Council amended the antiquated Commercial Rent Tax (CRT) that has unfairly burdened small business owners for many years. The CRT is imposed on businesses in Manhattan that are south of 96th Street and have annualized base rents of $250,000 or more per year, with a partial credit for rents between $250,000 and $300,000 per year. This legislation creates a new Small Business Tax Credit and the Council estimates a savings of approximately $36.8 million for over 2,700 taxpayers.
Reducing Capital Project Costs
Capital projects are critical for maintaining and upgrading the City’s most aging public infrastructure but involve large-scale and costly work. To identify ways to reduce the costs of these projects, the Council created the Capital Task Force. This task force will determine how the City can reduce the time it takes to complete projects, lower costs, and improve transparency.
Strengthening Transparency Around Tax Breaks
Economic development projects, such as those that increase employment or business facilities, account for a third of the City’s $8.2 billion in tax breaks for the City’s FY18 budget. These funds are often granted on a multi-year basis, or administered by the New York City Industrial Development Agency, which is supported by the City’s Economic Development Corporation (EDC). This departs from the regular review process that the more traditional expenditures, such as education or public safety, go through as part of the annual budget process. To bring greater transparency and efficiency to these expenditures, the Council has moved to address this disconnect:
- In December, the Council successfully had its first oversight hearing as part of a new regular review process of Economic Development Tax Expenditures. The hearing provided the public with a greater understanding of the effectiveness of the Commercial Expansion and Commercial Revitalization Programs, which costs taxpayers $27 million a year. The Council also heard ways the evaluative process can be improved from the Independent Budget Office, which will conduct these evaluations for the City Council.
- In addition, the Council also passed a package of legislation to improve transparency at EDC, and place additional reporting rules on efforts to recover funds from non-compliant developers, as well as around fiscal impact statements for projects funded by EDC.