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July 23, 2013

 

DiNapoli: Economic Recovery Helps Balance
New York City Budget

A strong economy, bolstered by job gains that have outpaced the nation, have helped balance the New York City Fiscal Year (FY) 2014 budget and maintained services at current levels without raising taxes, according to a review of the city’s financial plan released today at the annual meeting of the Financial Control Board by New York State Comptroller Thomas P. DiNapoli. DiNapoli cautioned that despite smaller out-year budget gaps, significant risks to the budget remain.

“New York City has bounced back from the Great Recession and Superstorm Sandy faster than anyone could have imagined,” DiNapoli said. “While the city is well positioned for the future, there remains some unfinished business and ongoing challenges that present risks to out-year budgets”

The FY 2014 budget is balanced and out-year budget gaps of $2 billion in FY 2015, $1.8 billion in FY 2016 and $1.4 billion in FY 2017 are smaller than those projected a year ago. While revenue collections could exceed city forecasts, the city still faces significant budget risks.

The largest uncertainty is the outcome of collective bargaining. All of the contracts with the city’s unions have expired, some as long ago as November 2009. The city has also not budgeted for the potential impact of the next round of federal budget cuts. In addition, the city can only sell 400 of the 2,000 new taxi medallions without state approval of a taxi accessibility plan for disabled passengers, even though a court ruling allows the city to move forward.

Although the securities industry has regained less than 20 percent of the jobs it lost during the recession, it remains an important part of the city’s economy. Last year the industry earned $23.9 billion from its broker/dealer operations, making 2012 among the most profitable years on record. In the first quarter of 2013, Wall Street saw $6.6 billion in profits, half of the city’s forecast for the entire year.

Despite these positive signs, the city’s outstanding debt now totals more than $100 billion, which is 57 percent more than ten years ago. Retiree health care, which is not funded on an actuarial basis, is an $88 billion unfunded liability, an increase of over $35 billion since FY 2006.

To view the report visit: http://www.osc.state.ny.us/osdc/rpt5-2014.pdf

 


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