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City budget office reports large shortfall; mayor freezes discretionary spending and asks departments to propose cuts
Summary
Interim CBO director warned of a combined general‑fund and payroll‑tax shortfall projected at roughly $150 million by the end of 2026, outlined immediate mayoral spending freezes and department reduction targets, and said federal grant reductions increase the risk to city services.
Interim Director Dan Eder of the City Budget Office told the Select Budget Committee on June 5 that an April revenue forecast downgrade and weakening 2024 actuals have created a deficit the city must close. Eder said the city is now working with a revised outlook that removed about $217 million from earlier expectations and that the CBO is “anticipating a hundred and $50,000,000 of combined deficit in the general fund and the payroll expense tax fund by the end of 2026.”
Eder and central staff described immediate and planned actions by the executive to reduce spending and prepare a mayoral proposed budget:
- Immediate steps: On April 11 the mayor froze discretionary travel and training, paused new contracts not already committed, froze spending on new programs and extended a hiring freeze into 2025. -…
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