More austerity on the way at NYC agencies as Adams demands another 3% shave from budgets

Mayor Adams on Monday demanded his agency heads engage in another round of belt-tightening in a directive requiring that they find 3% savings in their current budgets — on top of the 3% many were required to shave from his initial spending plan.

On top of what essentially amounts to a 6% austerity measure, Adams is asking agency heads to find 4.75% in savings in each following year until 2026.

In a written statement to the Daily News, Adams blamed the need for the additional measures on fiscal headwinds on the horizon.

“We currently face new costs that will increase the city’s obligations by billions of dollars, including growing pension contributions, expiring labor contracts and rising health care expenses,” Adams said. “In response, we are asking every city agency to tighten its belt without laying off a single employee or reducing services. This Program to Eliminate the Gap savings plan is strong and decisive action that will protect both the city’s financial outlook and funding for critical programs and services, promote efficient government operations, and protect the city’s long-term financial stability.”

Unlike the first Program to Eliminate the Gap, or PEG, that Adams unveiled in his first adopted budget in June, this one will include several agencies that were initially spared — the NYPD, the Correction Department, the Department of Health and Health and Hospitals, among them, according to an official familiar with the plan.

In his memo, Adams lays out the challenges the city faces in more detail, ticking off a list of issues that could adversely impact the city’s economy.

First, he notes, the stock market “was down substantially” in 2022. Second, he writes, “most of the city’s labor contracts have expired or about to expire.” In addition to those factors, he wrote to his agency heads that health care costs are rising, inflation is still a problem and the city has had to shelter thousands of new asylum seekers in recent weeks.