NYC comptroller seeks to have each individual agency pay out settlements rather than using the general fund.
As one of the biggest cities in the world, it’s no surprise that New York City has to regularly pay out settlements in legal disputes. There is simply no way to operate a city of that size without running into legal problems with various incidents and events that wind up in court. With that said, most people would like to be shocked to hear or see just how much the city does pay out annually in settlements. For the 2023 fiscal year, that number approached a whopping $1.5B, which is a massive amount of money for a city of any size. It’s easy enough to imagine what that money could have accomplished if it remained within the city budget and didn’t get paid out for a variety of claims and lawsuits.
Included in the many settlements that were paid out were claims against a variety of agencies within the city. The greatest number of personal injury and property damage claims were settled by the New York City Police Department, with nearly 7,000 – that is an increase of around 50% from the year before. There were also more than 1,300 claims against the Department of Education, and almost 1,700 motor vehicle crash claims.
The reasons for these claims ranged wildly across a number of different issues. Some of the biggest settlements were payments made due to reversed convictions, with excess police force also leading to some significant settlement amounts. Despite the lofty payout totals and huge numbers of cases, the payout was actually slightly lower than what the city was forced to pay in 2022.
The New York City Comptroller has a perspective on how this issue could be improved in order to save money and reduce the number of claims that are filed. His perspective is that each individual agency budget should have to pay out the settlements, rather than the general fund. Currently, the settlements are considered a matter for the general fund to address, rather than counting what is paid out as an obligation of the budget of each agency.
The thinking here is that by assigning responsibility for settlements to each agency, there will be more motivation within those agencies to figure out how to reform operations in a way that will cut down on how many claims are filed. Without bearing that direct financial responsibility, the agencies might not be too concerned with the claims that are filed and may not be proactive in taking steps to reduce the chances that issues will arise that lead to legal action.
It’s not realistic to think that the settlement payments in New York City will ever get down to nothing, or even close to that mark. However, with some systematic improvements and updates to the way agencies are held responsible for these claims and settlements, it does seem possible that the number could be dramatically reduced – which would lead to savings for taxpayers and available funds that could be diverted toward other important city initiatives.
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