(co-authored with Benjamin Weiser)

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Looking to New York City

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Entitlement Spending

The federal government is the principal source of funding for the social safety net, the array of retirement, health care and income supplements that make our society civil and caring.

The numbers are large and the economic and social benefits of these transfers are varied. As the December Comptroller report found:

“Many New Yorkers receive federal benefits which in aggregate total nearly $33 billion, including Social Security and Supplemental Security Income and the Supplemental Nutrition Assistance Program. Federal support of healthcare coverage totals approximately $54 billion through Medicare, Medicaid, and the Affordable Care Act.”

People with real needs are served by these numbers. For example, Lander’s analysis of publicly available data from the Social Security Administration notes that, in December 2023, 1.3 million individuals receive Social Security benefits totaling $2.1 billion, or $25.2 billion annually. That same month, 335,000 people received a total of $229 million in Supplemental Security Income. The SNAP program serves 1.8 million residents (including 560,000 children).

Federal Programs Delivered by City Government

Many city and county governments administer critical federal programs. New York City’s FY 2025 November Budget includes $7.92 billion in federal grants, approximately 7% of the total. These resources provide a range of critical services and are delivered by an array of city agencies.

As the December report describes:

Over 80% of funding flows to just 5 agencies. The Department of Education receives the largest amount of federal non-emergency funding of any City agency, with $1.97 billion. Social service agencies: the Department of Social Services, the Administration for Children’s Services and the Department of Homeless Services, receive just over half of the City’s non-emergency federal funding, [$1.88 billion, $1.57 billion and $625 million respectively]. The Department of Housing Preservation and Development budget reflects $673 million, which does not include the Community Development Block Grant funding that is allocated to the mayor’s office.

The share of federal funding as a proportion of overall agency spending varies.

While the Department of Education’s federal revenue budget is the largest in magnitude, only 6% of its expenditure is federal funding. The budget of the Administration for Children’s Services, by contrast, is 50% federally funded. The Department of Housing Preservation and Development also receives over half of its funding from the federal government.

Beyond its year-to-year operating budget, the city government also receives federal funding to undertake longer-term capital infrastructure projects. The city government’s September 2024 Capital Commitment Plan (FY 2025 to FY 2028) includes $2.56 billion in federal funding, with $941 million anticipated in FY 2025 alone. The highest level of capital support is for Department of Transportation projects ($728 million through FY 2028), and for the Department of Parks and Recreation ($290 million, also through FY 2028).

Federal Funding Delivered by Affiliated Entities

Funding delivered by city government represents only a portion of the overall federal support for New York City. Significant federal funding also flows to other public entities, non-profit organizations and health care providers. For example, the federal government provides $5.5 billion to other public entities: including the NYC Housing Authority (NYCHA), City University of New York (CUNY), and NYC Health + Hospitals.

As with entitlement funding, it is worth putting a face on these numbers.

The New York City Housing Authority (NYCHA), the largest public housing authority in the country, currently serves over 520,000 low- and moderate-income residents across over 300 developments. Incredibly, NYCHA is home to approximately 1 in 17 New Yorkers. NYCHA also administers the largest housing choice voucher program in the U.S., with over 104,000 households renting private apartments with federal assistance.

CUNY, for its part, receives an estimated $1.1 billion in federal funding largely in the form of financial aid funding (Pell Grant funding and Direct Student Loans). 50% of CUNY students are from households that earn less than $30,000 per year, warranting this financial aid.

Two other major public authorities, the Metropolitan Transportation Authority (MTA) and the Port Authority of New York and New Jersey also receive significant capital infrastructure funding. For example, federal funding for the MTA’s 2020-2024 Capital Plan is estimated at $13.1 billion. This capital funding doesn’t include, of course, the revenues that would be raised via congestion pricing, which the Trump Administration is seeking to end.

Federal disaster aid

New York City experienced 5 disasters between 2011-2023, which resulted in $10.3 billion in recovery funding to the city. Without federal capital interventions to support these investments, the long-term aftermath of natural disasters would look very different, particularly given the state of private insurance markets.

Federal Workforce

Over 46,000 federal employees worked in New York City as of September 2024. Their total wages in 2023 amounted to $4.7 billion. The planned federal reductions in force will have multiplier effects that ripple through the local economy.

Closing Thoughts

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