Social-services spending under Mayor Adams soars thanks to the migrant crisis

What are you getting for your city tax dollars? 

In the decade since the final Bloomberg-era budget, city spending has soared by 12% above inflation.

New York spends far more, per person, than wealthy peers. 

Until recently, the main culprit has been the massively ballooned size of the city workforce, mostly in education, with little to show, in terms of classroom results, to show for it. 

But now, for the first time in decades, the city is placing an open-ended bet not on public services, however, overfunded, but on social- services.

For decades, the city has kept social-services costs under control, but Mayor Adams’ strategy of indefinitely housing migrants is blowing up such costs. 

City Hall downfall 

In fiscal year 2014, the last budget that former Mayor Michael Bloomberg put together, New York spent $99.5 billion in inflation-adjusted dollars. 

Bloomberg himself, despite his reputation for austerity, was no miser.

During his three terms, spending exceeded inflation by 42%, mostly led by a massive first-term increase — more than 40% — in teachers’ salaries. 

Now, in the fiscal year that started earlier this month, spending will top out at $111.1 billion.

After federal and state grants, mostly for education and health care, spending funded by city taxpayers is $82.8 billion — beating the last Bloomberg year by 13%, and exceeding the last Bill de Blasio year by 2.4%. 

New York spends far more than comparable cities: Boston, with its $4.3 billion budget, spends about $6,600 per person, while we spend $13,100. Miami spends about $4,100. 

So what are we spending all that extra money on? 

About half of city spending goes to people — city workers’ salaries and benefits. 

In 2014, before de Blasio took over the budget, city spending on salaries and benefits was $31.9 billion in inflation-adjusted dollars.

Spending on worker benefits — pensions and health care — reached $23.4 billion. 

In de Blasio’s final year, salaries reached $34 billion — growth of 7%.

Benefit spending grew 2%, to $23.8 billion. 

That’s not because de Blasio hiked salaries or benefits above inflation, but because the size of the workforce grew 11%, to a record 334,000. 

In fact, because of the massive, uncontrolled expansion of the workforce under de Blasio, city workers aren’t individually better off, despite all this extra spending. 

Their average annual wage and benefits pay, at the end of his term, was $173,000.

That is a lot, but slightly less, in real dollars, than eight years before. 

Look at the books 

But city spending and the number of city workers didn’t rise across the board. 

By far, de Blasio, like his predecessor, favored one area: education.

During his eight years in office, education spending rose a whopping 27% above inflation, from $30.2 to $38.3 billion. 

Education headcount rose from 134,000 people to 157,000 people — 17%. 

Some of this was adding teachers for pre-K and smaller class sizes, but much of it — more than 5,000 people — was administrative. 

By contrast, spending and headcount in other core areas didn’t rise much at all. 

Police?

At $11.4 billion in 2022, it was down 2% in inflation-adjusted terms, as police headcount, mostly civilian, rose just 3%. 

Sanitation?

Spending up 4%, and headcount up 3%. 

And despite his reputation as a progressive, de Blasio didn’t open the spigots for social-services spending. 

Medical costs for the poor, mostly Medicaid, actually went down 16% in real terms, to about $7 billion, after the state started taking responsibility for Medicaid cost increases. 

The big exception was homeless services, which nearly doubled in real terms, from $1.3 billion to $2.5 billion. 

Even with this increase, though, thanks to curtailed spending on other social-services, the total social-service budget — public assistance, medical care and homeless services — actually shrunk a tiny amount in the de Blasio years, from $11.4 to $11.3 billion. 

To summarize the de Blasio years, then, you could say: Lots of extra spending on education, which pushed up overall workforce spending. 

But, except for homeless services, he didn’t blow out the budget on social services. 

Nor did he increase debt costs: thanks to low interest rates, they fell, in real terms, from $7.3 billion to $7.2 billion. 

Turn for the worse 

What has changed under Adams? 

The city’s workforce is actually shrinking, from de Blasio’s blowout 334,000 to less than 329,000 by the end of the current fiscal year next June. 

Even with Adams’s raises for public-sector workers, that means the blow-out days of increasing salaries and benefits are over: Salary costs, at less than $33 billion, will be 3 to 4 percent lower than the final de Blasio year in real terms. 

Even the ranks of the education department will shrink 2%, to 153,000 — which explains the teachers union’s successful push to convince Gov. Hochul to sign a law requiring lower class sizes.

The union desperately wants to keep the gravy train running. 

Debt costs are rising, by about 7%, to $7.7 billion, as interest rates rise. But that’s not enough to break the budget. 

So what spending is skyrocketing? 

Social services.

Adams proposes to spend a full $4.2 billion on homeless services this year, a full two-thirds higher than final de Blasio year, and more than three time higher than when de Blasio first took office.

That’s entirely due to housing migrants. 

On paper, Medicaid and welfare spending won’t rise — although that won’t be as true in future years, as the state shifts some Medicaid costs back to the city. 

But taken together, Medicaid, welfare and homeless spending will total $12.6 billion this year — a full 11% increase, after inflation, above the final de Blasio total. 

But does Adams not think the tens of thousands — potentially well over a hundred thousand — migrants attracted to New York’s housing-on-demand policy will need medical services and education services, and, since the federal government doesn’t approve food stamps for undocumented immigrants, cash payments for necessities? 

Bottomless pit 

For all of de Blasio’s — and, for that matter, Bloomberg’s — increased focus on education spending, the city, left to its own devices, wouldn’t have had a hard time dialing it back. 

Simply don’t hire retiring teachers, cut back on the bloated six-figure administrative staff and allow the workforce to shrink as enrollment has shrunk. 

The state’s mandate for class sizes, of course, makes that harder. 

But the bigger immediate issue is Adams’s refusal to come to terms with the migrant crisis. 

That is, his refusal to acknowledge that New York City cannot take on the burden of housing an undefined, open-ended number of migrants has created an entire new issue, one we haven’t seen since the welfare-reform days: a long-term social-services spending burden we can’t easily get out of. 

Adams has never offered an answer to the obvious question: What’s the strategy to move migrants out of temporary shelter? 

Most, in the end, likely will not qualify for asylum.

They thus will not be legally able to work in this country. 

New York is already home to hundreds of thousands of people unable to legally work in this country, and they make their livings under their table. 

But their longtime practice was to rent rooms or small apartments in Queens or The Bronx. 

What is the incentive for new migrants to do that, when the city has made it clear it will offer them permanent housing, at high cost? 

For the first time in more than a generation, then, New York is vastly increasing its social-services spending, essentially overnight. 

To do that, it will hold most other spending — that is, spending on public services — essentially flat. 

But what happens in a recession? 

Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.