(The Center Square) — New York City Mayor Eric Adams is walking back more proposed budget cuts and easing a hiring freeze amid better-than-expected revenues and reduced spending on asylum seekers.

Adams announced on Wednesday that his administration is canceling planned cuts to the fiscal year 2025 budget under the city's Program to Eliminate the Gap and restoring funding as a result of better-than-expected revenue projections, a reduction in spending on migrants and additional state aid have pumped billions into the city’s annual spending plan.

The Democrat said the turnaround bodes well for the city's taxpayers.

"After two years of hard work, we are heading in the right direction," he said in remarks on Wednesday. "Jobs are up, crime is down, tourists are back, and we are delivering for working-class New Yorkers every day."

The move followed Moody’s Investors Service's affirmation on Tuesday of New York City’s Aa2 issuer rating. The credit rating agency praised the Adams administration for its “robust financial management” and the successful "implementation of budget measures to help close budget gaps … caused by the migrant crisis."

"And despite facing a perfect fiscal storm that included a multi-billion-dollar budget gap driven by an asylum seeker crisis, the sunsetting of COVID-19 federal stimulus funding, and the cost of inherited outstanding labor costs, our administration was able to successfully make the strong fiscal decisions to navigate us to prosperity," he added.

Adams said the city will trim another 10% in migrant spending in the spending plan, which follows a 20% reduction his administration previously announced in its preliminary budget.

In January, Adams unveiled a $109.4 billion budget that scaled back some previously proposed cuts prompted by the city's costs for caring for tens of thousands of migrants.

The spending plan calls for balancing a projected $7.1 billion budget gap by cutting spending on asylum seeker services and using city reserves on top of higher-than-expected tax revenue.

Adams restored funding for the New York City Police Department to add another police academy class of 600 recruits to join the ranks in April. The city also walked back cuts in funding to the Fire Department of the City of New York, restoring funds to return a fifth firefighter at 20 engine companies, among other spending items.

The city says it overestimated the cost of caring for migrants by $2 billion in preliminary budget projections, which has lowered the projected costs through fiscal year 2025 to $10.6 billion.

But Adams says the migrant crisis is still draining the city’s resources and reiterated calls for more assistance from the state and the federal government.

"Make no mistake — we are not yet out of the woods, as we still need Albany and Washington, D.C. to play their roles in providing New Yorkers with additional support," he said on Wednesday.

City Council President Adrienne Adams issued a statement praising the move to cancel the PEG cuts and ease the hiring freeze, saying it "protects essential services our constituents rely on."

"As the Council’s economists forecasted, New York City’s economy has proven durable and resilient, and blunt cuts that had a disproportionately negative impact on vital programs were never necessary," the council's statement said. "It remains critical for our municipal workforce to be strengthened, and the end of the full hiring freeze is an important step that will enable City agencies to fulfill their obligations to New Yorkers."

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