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Mayor’s budget guidance requires 3.5% annual general-fund cuts; HSS CFO outlines implications
Summary
CFO Pamela Levin told the HSS board the mayor’s instructions require departments to propose ongoing general-fund reductions of 3.5% in FY2021 and again in FY2022 (7% total), citing projected five-year deficits; HSS staff said the cuts will be difficult given the department’s small size and previous savings it provides the city.
Pamela Levin, the Health Service System’s chief financial officer, briefed the board on the mayor’s two-year budget instructions and the city’s five-year financial outlook on Jan. 9.
Levin said the five-year financial plan projects a deficit of about $195.4 million in FY2021 and about $224.1 million in FY2022. In response, the mayor’s instructions ask departments to propose ongoing reductions equal to 3.5% of general-fund support in each year, which amounts to approximately 7% cumulatively over the two-year cycle for planning purposes. Levin said the amount is difficult for HSS because the department is small and has produced savings for the city through benefits management.
The instructions also emphasize outcome-driven budgeting, measurable performance metrics and equitable outcomes targeted to communities with the highest need. Departments were told not to add new positions in their initial submissions; post-submission discussions may consider new positions aligned with mayoral priorities. Levin said HSS will present its proposed budgets to the Finance and Budget Committee on Feb. 13, where the public may comment.
Board members urged that HSS’s demonstrated cost savings for the city be emphasized in budget negotiations.
What happens next: HSS staff will prepare proposed reductions and performance metrics for the Feb. 13 public hearing and will highlight the department’s cost-savings record in submissions to the mayor’s budget office.
