City officials warn New York is short on a plan as administration skips council hearing on federal cuts

Chair Ressler convened an emergency Council oversight hearing to examine how New York City is preparing for sudden reductions in federal funding — and repeatedly faulted the Adams administration for not attending in person. “It’s an absolute disgrace that the administration chose to refuse to show up today,” the chair said as the panel opened.

The hearing brought testimony from the city’s Independent Budget Office and outside fiscal analysts who said the city faces substantial near‑term risk from cuts to federal programs and recommended bolstering reserves and improving transparency. Jackie Sherman, a senior analyst at the Independent Budget Office, told the committee that direct federal funding accounts for roughly 8% of the city’s expense budget and that agencies and programs that rely on federal reimbursements need clearer contingency planning. “The budget continues to understate costs for uniform personnel overtime, Carter cases, and funding for city thefts,” Sherman said in her prepared testimony, urging the Council to press the administration for more detailed assumptions in the executive budget.

Andrew Rhine, president of the Citizens Budget Commission, urged immediate action to protect core services and proposed a package of steps including limiting new spending, depositing at least $500 million into the rainy‑day fund, and bolstering general reserves by at least $1 billion. “The city will not be able to backfill all federal reductions,” Rhine said, recommending the city preserve services that most directly support high‑need New Yorkers.

Nut graf: The hearing centered on whether the city has identified which federal programs are most vulnerable and whether City Hall has asked agencies to prepare contingency plans. Witnesses warned that unclear revenue assumptions, delayed federal reimbursements and agency staffing cuts in Washington have already disrupted some programs and that the Council needs better information and stronger budget reserves to protect New Yorkers.

In testimony, the IBO described the city’s reserve structure: roughly $8.2 billion across different accounts, including about $2 billion in the legally established reserve stabilization fund (the “rainy day fund”) and roughly $5 billion in the retiree health benefits trust. Sherman said the Council should weigh the tradeoff between prepaying known obligations for next year versus depositing surplus funds in reserves that could be used in a broader revenue shock. She emphasized the need for transparent, realistic assumptions in the executive budget and asked whether agencies are being centrally tracked for federal grant exposure and staff funded by federal sources.

Council members repeatedly pressed witnesses about whether OMB maintains a centralized inventory of federal grant exposure and agency contingency plans; witnesses said IBO and outside analysts are tracking grant flows from public documents but do not have full visibility into the administration’s internal contingency work. Rhine said public, auditable reporting in the executive budget is essential and urged the Council to press City Hall for that detail when the executive budget is released.

Several witnesses emphasized that federal cuts create cross‑program ripple effects: a federal cut in one area often forces the city and state to backfill spending in another, squeezing funds for nonfederal programs. Sherman and Rhine both urged that the Council require clear reporting on which federal streams are most at risk, how agency operations depend on those streams and what the administration’s plan is to prioritize scarce city resources.

Ending: Council members said they will pursue the information in the executive budget and urged the administration to testify in person. The hearing produced no votes; it was an oversight session focused on information, risk assessment and budget strategy.