As COVID-Era Funding Dries Up, Activists Fight Austerity in City Budget Battles

During the pandemic, hundreds of billions of dollars in federal aid from both the Trump and Biden administration flowed to state and municipal governments, allowing for assistance to struggling businesses, expansion of unemployment benefits, emergency assistance for schools, and public health needs. This also became an unexpected time of power for workers, as tight labor markets gave them greater bargaining power and the Great Resignation led to wage increases. Meanwhile, despite predictions to the contrary, the recent 2022 general elections showed public support for progressive and center-left politics, driven in large part by the nation’s youth. Perhaps relatedly, support for labor unions is currently polling at a historic high in the United States.

All of these developments have conspired to make 2023 a pivotal year in the unsexy and often overlooked world of municipal budgets. As many cities no longer have coffers flushed with COVID-era federal financing, the mayors in some cities such as New York City and San Francisco are calling for deep cuts to their cities’ budgets. This push toward austerity — which many politicians are trying to justify as a non-ideological and purely technocratic response to the end of federal emergency funds — tips the balance of power back away from workers, limiting social services and disempowering working people in a vulnerable moment.

New York City’s budget is the largest municipal budget in the country (larger than the budget of all but a small handful of states). The city has also historically had one of the most robust municipal welfare systems, which has made regular life for working people and immigrants more manageable in certain ways than in many other cities.

NYC Mayor Eric Adams recognizes the importance of at least paying lip service to working class politics. In January the mayor, who is a former police officer, described his proposed budget as an attempt to maintain an accessible, safe, fair city for the working classes of New York City — a community with which Adams claims affinity — but the budget proposal in fact implements cuts that do the exact opposite.

Positioned as a demonstration of “fiscal discipline,” Adams’s budget creates additional cuts in funding to public education, libraries, higher education and social services. Projected cuts relative to the previous budget include the following estimates: $300 million from public schools, $168 million from CUNY (the city’s public university system, which comprises 25 campuses), $42 million from public libraries, $257 million from health care, $190 million from youth services and $62 million from housing. In addition the budget proposes slashing 5,500 public sector union jobs from schools, social services and hospitals. While these cuts would be devastating to city agencies and the New Yorkers they serve, Adams’s budget also include​s around $8.5 billion in reserves. Meanwhile, it remains unclear whether the NYPD will face budget cuts at this time.

Adams has sought to blame poor stock market performance, labor (and union contract) costs and the migrant crisis for the cuts, setting clear scapegoats in his ideological war on well-funded public services and the social safety net in a time of continued public health crises and increased economic uncertainty. While Adams uses the migrant crisis to justify the budget cuts, he also seeks to deflect political responsibility for the needs of migrants. In January 2023, he called for greater federal assistance, claiming that the city was at capacity. Later in January, Mayor Adams announced that New York City’s historic “Right to Shelter” law did not apply to asylum seekers, against the protest of legal experts.

This austerity budget follows on the heels of already devastating cuts that Adams instituted in his first year in office. In his review of the 2022-2023 fiscal budget, Adams demanded that all city agencies impose voluntary 3 percent cuts between September 2022 and June 2023, and then mandated 4.75 percent cuts in each additional year. Agencies such as the libraries were forced to return money back to the city. City agency vacancies have led to slowdowns in services such as the fulfillment of SNAP (food assistance) applications. Over 28,000 applications for SNAP and cash assistance were left unfulfilled in December 2022 alone, violating a law that requires that such applications be processed within 30 days.

Back in 2022, the media published reports predicting that New York City would soon face a $10 billion “fiscal cliff,” justifying the need for such drastic budget cuts. Yet contrary to this panic, NYC has actually brought in more revenue than projected. City revenues were already $1.4 billion above projections in November 2022, according to the Independent Budget Office.

Advocates and budget organizers are already denouncing the inhumane cuts. In addition to harming vulnerable New Yorkers, Adams’s austerity budget hurts his stated goal of creating a “safe” New York.

Kelly Young, the Civil Rights Campaign coordinator at VOCAL-NY, a grassroots member-driven organization that builds power in communities affected by homelessness, mass incarceration, HIV/AIDS, and the drug war, told Truthout: “[Our members] know that housing, healthcare, social services…are the solution to public safety problems. The mayor is doing the exact opposite… We at VOCAL-NY are angry and fearful because we see what happens when lifesaving services and agencies don’t have the resources and funding to meet the needs of New Yorkers.”

Ileana Mendez-Penate, program director at Communities United for Police Reform, pointed out the ways in which Adams’s prioritization of police-based solutions, at the expense of social services provisions, has worsened many problems in New York City. Mendez-Penate told Truthout that the cuts to city employment have been devastating: “We are already seeing it. People are having trouble getting their food stamps. Folks can’t move out of shelters because of the waiting lists to get to permanent housing. The mayor is increasing the criminalization of poverty. The NYPD’s recent report showed that quality of life summonses are up 27 percent. That’s huge. He really is withdrawing resources and support and increasing criminalizing of poor, Black, and Brown and Latinx communities in the city.”

And increasingly, Mayor Adams’s preference to promote Wall Street profits and favor the interests of the wealthy is having a devastating effect on middle- and lower-income New Yorkers, who are moving out of the city to find affordable housing. This cost push has disproportionately hurt Black families — as Census data shows that NYC’s Black population declined by 9 percent since 2010, and the population of Black teenagers fell by over 19 percent since 2010.

While New York City has a pro-corporate, centrist Democratic mayor, it also elected its most progressive city council to date in 2021, resulting in a large Progressive Caucus that is energized to fight back against this austerity budget. Most recently, the council refused to vote on Mayor Adams’s most recent round of budget cuts in January 2023, and city council leadership denounced his preliminary budget and committed to fight for New Yorkers. Among the Progressive Caucus are council members Tiffany Cabán and Alexa Avilés, who were endorsed by the NYC Democratic Socialists of America (DSA). They were among the few council members to vote against Adams’s fiscal year 2022-2023 budget that enacted severe cuts to public education.

James Neimeister, Council Member Avilés’s communications and organizing manager, told Truthout that social movements and organizers can influence the budget, saying: “There’s so much to be won by making noise on this issue…What we’ve been seeing in past years, especially from social movements, that council members — not just in NYC, it’s a national trend — people want to see council members who are going to fight not just through the song and dance of budget, but are going to say ‘no this is unacceptable if it doesn’t meet certain standards.’”

While NYC sets the tone, both in terms of an initial mayoral budget and city council and public resistance, it will be interesting to see how other cities will deal with looming budget gaps and the need for revenue as their federal funding dries up. In Boston, the city’s public transit agency could face a budget deficit of $421 million in 2024. San Francisco is facing a budget deficit of about $728 million, and Mayor London Breed has requested 5 percent across-the-board agency cuts this year, and 8 percent cuts to follow. Houston, Texas, could also be headed for a potential fiscal “cliff” in its upcoming budget cycle, as it relied heavily on federal aid to plug deficits without creating new revenue streams in 2022.

One city that has already adopted a fiscal year 2023 budget is Chicago, which has budget cycles that run January-December. Mayor Lori Lightfoot, like Mayor Adams, has faced organized resistance from a socialist-progressive bloc in the City Council (made up of 50 aldermen), who have successfully pushed the mayor to commit to record investment in non-police violence prevention and social services. Alderman Carlos Ramirez-Rosa, a member of the Chicago City Council Democratic Socialist Caucus, told Truthout, “We (leftists) fought to make sure these federal funds were used to meet [critical social services] needs in our budget.” However, there are many unmet needs including promises that Lightfoot ran on, such as reopening the Department of the Environment (shuttered under the Rahm Emanuel administration) which leave many environmental and climate protections unaddressed. In addition, Lightfoot has not reopened and expanded the public mental health clinics shut under the Emanuel administration as promised, but rather has invested in private clinics. But notably, “In the 2022 budget fights, socialists and progressives came together to win a 72 percent increase of staff in city mental health clinics.” Ramirez-Rosa added, “Under Rahm, the city laid off 200 workers in the department of public health, most of them workers at the mental health clinics. This was the first time in a decade to see a reversal of this trend. For us it was significant because it was us striking a blow to the neoliberal project at city hall.” While powerful, corporate backed mayors do set the agenda, activist and social movement back city council members can also create successful resistance.

Philadelphia, a smaller city, passed a budget of $5.8 billion last year, for a fiscal year that runs from July 2022-June 2023, which included new investments for police ($30 million) as well as other programs for violence mitigation. While Philadelphia’s budget, and tax base, is much smaller than New York City’s, organizers in Philadelphia created the Tax the Rich coalition, which called for more progressive taxes on the wealthy individuals and institutions in Philadelphia, shifting tax burdens away from working-class Philadelphians. Philadelphia’s progressive budget coalitions were also successful in limiting increases to the police budget in 2020-2021. The recent 2022-2023 budget also included victories such as increased funding for parks, libraries and recreation centers, as well as a homestead exemption that would benefit Black and Brown property owners.

Progressive City Council member Kendra Brooks has introduced a “Tax the Rich” wealth tax bill in 2020 and 2022, which could raise $280 million for the city. Although the radical bill has not yet passed, its introduction has created important conversations about budgets and fairness in Philadelphia.

As Anlin Wang, a member of Philadelphia DSA and the Philly Revenue Project told Truthout, “A goal of the progressive movement is to win true moral budgets that invest in our communities’ care, not just cops and bloated police budgets, and are paid for by corporations and billionaires who have avoided paying what they owe for decades. City budgets are how we help win real resources for our communities.”