New York City Ends Fiscal Year 2007 with Record Surplus
DiNapoli Praises Prudent Management, Smart Use of Funds
New York City ended fiscal year 2007 with a record $4.7 billion surplus and for the second consecutive year has managed unanticipated resources with an exemplary blend of prudence and foresight, according to a report released today by State Comptroller Thomas P. DiNapoli. The report finds that the City benefited from a $9.4 billion net revenue windfall for fiscal years 2007 and 2008, even after addressing funding needs that were not contemplated at the start of fiscal year.
“Mayor Michael Bloomberg and the City Council have done a great job of managing this windfall,” DiNapoli said. “Clearly, there will be challenges in the coming fiscal years, but the City is well-positioned largely because of steps taken over the past two budget cycles.”
According to DiNapoli’s report, robust job growth, exceptionally strong activity on Wall Street and a real estate market that has continued to buck the national trend have combined to drive the City’s economy and generate unexpected funds. The City benefited from $6.5 billion of unexpected funds in FY 2007 and another $2.9 billion in FY 2008 for a two-year windfall of $9.4 billion. In FY 2007, the City projects a net record surplus of $4.7 billion after discretionary actions that improved the City’s financial position.
The unexpected funds in FY 2007 and FY 2008 helped the City:
- eliminate a $3.8 billion gap forecast for FY 2008;
- reduce the projected FY 2009 gap to $1.6 billion from an earlier $4.6 billion gap estimate;
- retire nearly $1.3 billion of debt that was due in fiscal years 2009 and 2010;
- contribute $1.5 billion to the Retiree Health Benefits Trust Fund in FY 2007; and
- adopt a $1.6 billion tax reduction program for FY 2008.
The report cautioned that although the City’s revenue and economic assumptions are conservative, the budget gaps projected by the City for fiscal years 2010 ($3.4 billion) and 2011 ($4.4 billion) are substantial and do not reflect the full potential cost of the next round of collective bargaining. Additionally, debt service is projected to reach $6.2 billion by FY 2011, which is 60 percent higher than the FY 2006 level.
“The City’s economy is strong today, but we don’t know what the future holds,” DiNapoli said. “Fortunately, the City has used its windfall wisely, and the future challenges are clear. The City should have ample time to prepare for what lies ahead.”
Click here for a copy of the report.