With New York in a budget crisis the likes of which it hasn’t seen in decades, a City Council leader says now is the time to open the books, eliminate wasteful spending and save some serious cash for schools and other causes.
The city should end billions of dollars in tax exemptions and other funding for developers and cancel huge contracts with big firms doing vague jobs, Councilman Ben Kallos (D-Manhattan), the chair of the Council’s Committee on Contracts, wrote Mayor de Blasio on Monday night.
He identified up to $15 billion in possible cuts and savings, saying nearly $1 billion of that could go to schools, social services and other causes that are facing steep cuts in the wretched economic climate.
Kallos pinpointed up to $10 billion the city could gain by ending cushy deals with developers including the company behind Hudson Yards, the Midtown mega-development that got $6 billion in tax exemptions, among other city perks.
By ending such exemptions, the city could rake in $5 billion in cash, Kallos said. And by scrutinizing deals predicated on promises of job growth, the city could save another $5 billion if it turns out developers haven’t made good.
“The budget is filled with deals done decades ago by people we don't even remember and we don't even know why,” Kallos told the Daily News. “They just stay in the budget through inertia. Now is the time to clean out all of the corruption and waste from the budget ... to have a budget where we know where every single penny is spent.”
The proposal comes with de Blasio and Gov. Cuomo yet to announce a plan B for if the federal government doesn’t bail out localities facing billions of dollars in tax revenue shortfalls. President Trump and Senate Republicans have rejected calls for cash help from localities around the country.
Along with revisiting sweetheart deals for developers, Kallos called for the city to recoup some $2.5 billion in funds allocated to the COVID-19 response that, he says, were never actually spent.
“We cannot put a price on expenses incurred to save countless lives,” he wrote de Blasio. “Now that we are on the other side of the curve, now is the time to re-examine contracts, cancel and claw back where we have not yet received delivery, renegotiate prices and transition to a sustainable supply chain.”
Citing a database maintained by the city comptroller, Kallos says the city may have allocated as much as $3.2 billion to the coronavirus response, with just $708 million actually spent on contracts with “prime vendors.”
The councilman also called for the city to cancel $375 million in contracts with huge companies like IBM and Northrop Grumman, along with big consulting firms Deloitte and KPMG.
“I can't imagine us having much liability there but even if there was, it would be a bad look for Fortune 500 companies to be taking money from a city that needs it to educate our children and feed the homeless,” Kallos said.
Factoring in the Council leadership’s proposal to cut $1 billion from the NYPD, Kallos says his approach would trim up to $15 billion from the city budget — and free up $827 million to spend on areas that the mayor previously marked for cuts. Those include the Department of Education, which is facing a whopping $800 million cut, and the popular Summer Youth Employment program, which the mayor wants to cancel.
“I’m not seeing elected officials rolling up their sleeves going line by line through the budget to find the cost savings that we need,” Kallos said. “My hope is that people who read about this will be as angry as I am about these hundred-million-dollar contracts ... with the biggest corporations on the planet that we should just cut so we can take care of our children and our seniors.”
Under state law, the City Council and mayor have until June 30 to finalize the budget.
“We’ll continue conversations with the City Council about our mutual priorities as we work towards [budget] adoption," said de Blasio spokeswoman Laura Feyer.