Local 1321 Queens Library Guild

New York City's Budget Explained

New York City Budget Process
Every January, the Mayor issues a preliminary budget for the next year. From May-June the City Council and Mayor negotiate a budget. During this budget season interested parties of all city agencies lobby the City Council and Mayor to get their fair share, and, by June 30th, the Mayor and the City Council must agree on a budget. During this process, the Libraries’ interested parties -- the Public, Union and Administration work together to advocate for library funding. We hold rallies, letter writing campaigns, special events, speaking at City Council hearings and more. When the budget for the new fiscal year is adopted, agencies then plan accordingly for the coming fiscal year.

During the fiscal year the City’s Office of Management and Budget (OMB) assess the city’s fiscal health. They analyze revenue (taxes, fines, fees, state and federal aid, etc.) and expenditures (salaries, health care, building utilities, etc.) to determine if the City has a deficit or surplus in the current and future fiscal years.

If it determines it will have a surplus then every City Agency continues with its programs and maybe the City gives them more money. If it determines it will have a deficit, OMB will issue Programs to Eliminate the Gap (PEG) letters. In these letters, OMB informs the agencies that they need to cut their budgets either through raising revenue or cutting budgets. The agencies must send OMB their proposals.

OMB reviews the proposals and issues a quarterly modification detailing how each agency must enact the cuts and the dates for when the cuts must occur. In determining the date for the cuts they factor in the latest tax revenue forecast, State aid forecasts, additional Federal aid and labor negotiations with the City (if any), and the mix of cuts between personnel costs and non-personnel costs (e.g. office services, outside contractors, etc).

Once OMB issues the modifications, the agencies make the necessary changes.
January is an important month in the budget process because that is when the Mayor releases the January Financial Plan, the budget for the balance of the current fiscal year and a preliminary budget for the next fiscal year. The January Financial Plan can include more PEGs for the current fiscal year, as well as PEGs for the following year.

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