While much remains uncertain about the “shape” of the recession and recovery, the Citizens Budget Commission’s research shows that even mild recessions produce multiyear revenue shortfalls that stress public budgets well after job growth resumes.  Often the most severe actions for balancing the budget– including service cuts, layoffs, and tax increases– are implemented in the years following the recession’s end. Prompt action at a recession’s start improves the prospects for the outyears.

With little time to address yawning revenue shortfalls in fiscal years 2020 and 2021, Mayor Bill de Blasio presented an Executive Budget in April that balanced both years; however, outyear budget gaps loom ($5 billion in fiscal year 2022) and are at risk of growing. A longer or deeper recession, slower recovery, and imminent State budget cuts are all credible threats.

Following the 2008 recession, the number of New York City full-time and full-time equivalent personnel decreased from a previous high of 311,018 in fiscal year 2008 to 293,550 in fiscal year 2012– a reduction of 17,468 or 5.6 percent. (See the interactive chart below.) Most of this reduction was achieved through attrition, although some employees were laid off.

Since the fiscal year 2012 trough municipal employment grew to reach an all-time high of 326,739 at the end of fiscal year 2019– an increase of 33,189 or 11.3 percent. Fiscal year 2019 headcount was 15,721 positions greater than the prior peak in fiscal year 2008. (Scroll through the interactive data feature below to see which agencies had the greatest headcount increases.)

The City has implemented a partial hiring freeze; however, the Executive Budget does not project a multiyear headcount reduction.  Authorized headcount will decrease from 333,859 positions to 332,511 from fiscal years 2020 to 2021, then grow to approximately 336,120 through fiscal year 2024. If recent history holds, these positions will not all be filled; headcount in fiscal year 2020 may end up being flat or even slightly below fiscal year 2019.

Nevertheless, this headcount plan does not demonstrate the assertive approach necessary to tackle the City’s serious fiscal problems. The Administration should act now to shrink the workforce with the least impact on services. The Adopted Budget should show the decline in headcount that will be needed to manage the next few fiscal years.