FOR RELEASE:

DiNapoli: New York City Budget for FY 2010 is Balanced

Large Budget Gaps Remain in Subsequent Years

New York City’s budget for the current fiscal year (2010) is balanced based on relatively conservative assumptions, but it faces budget gaps that average more than $5 billion in subsequent years because this year’s budget includes $6.6 billion in nonrecurring resources, a report State Comptroller Thomas P. DiNapoli released today shows.

“The City is navigating through a very difficult economic period,” DiNapoli said. “While recent reports of strong Wall Street profits are encouraging, we can’t count on Wall Street to solve our budgetary problems. Balancing next year’s budget could be painful. The City has used up most of the surplus resources accumulated during the last economic expansion. And options are becoming increasingly limited; The City has already raised taxes and slashed agency spending. It’s going to be difficult, but the City has to find a way to protect middle-class taxpayers and keep them in New York.”

The DiNapoli report concludes that the City should get a head start on closing next year’s budget gap, which could grow to more than $6 billion if the budget risks identified in his report materialize.
The report also indicates:

• After posting losses of $42.6 billion in 2008, the securities industry reported record first-quarter profits of $8.2 billion. Several large firms have also posted strong profits for the second quarter.
• The City will end fiscal year 2009 with a surplus of $2.8 billion, despite a $1.5 billion revenue shortfall. Most of the surplus resources were generated in prior years or from actions taken by the City to help balance the fiscal year 2010 budget, such as raising taxes.
• The City has raised property, sales and business taxes by $2.5 billion and has cut planned agency spending by $3 billion annually.
• City tax collections, excluding recent tax increases, were down by $3.3 billion in fiscal year 2009 and are projected to decline by another $2.4 billion in fiscal year 2010 – a cumulative drop of $5.7 billion.
• The City received $1.6 billion in temporary budget relief from the federal stimulus program.
• New York State’s economy contracted at an annual rate of 5.9 percent during the fourth quarter of 2008 and 4.3 percent in the first quarter of 2009. The State has lost 227,200 jobs over the past year. New York City has lost 115,700 jobs, including 25,800 jobs in the securities industry.
  

Click here for a copy of the report.

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