Most Federal Assistance to New York City Unlikely to Be Affected by City-Initiated Budget Cuts

The major federal programs contributing large amounts of funds to New York City were analyzed to determine the impact of reductions in New York City expenditures on the flow of federal aid. Federal programs aiding New York City have particular purposes and objectives, and the amount of federal funds the city receives is primarily determined by the formulas used in distributing the funds.

Historical experience does not demonstrate a relationship between budget reductions and changes in federal aid. It is unlikely that reductions in the city's budget will result in large reductions in federal aid. In the short term, state and federal regulations constrain the City's ability to make budget cuts. New York City's ability to control the flow of Federal funds is limited, and the Mayor's control over the City's total budget is constrained. The areas where the City can make major reductions are in City-controlled programs not largely supported by federal assistance. Attention is called to the impact of state-level decisions, particularly in public assistance and education programs.