DiNapoli: Risks Remain in N.Y.C.'s
Proposed 2010 Budget
Report Identifies $1.9 Billion of Risks Through This Year and Next
New York City has made progress in balancing its fiscal year 2010 budget but it still faces $1.9 billion in budget risks over the remainder of this year and next, according to a report New York State Comptroller Thomas P. DiNapoli released today.
“New York City officials are making progress on the budget, but tax collections are down and the City faces a series of significant out-year budget gaps,” DiNapoli said.
The City’s May 2009 four-year financial plan shows a balanced budget for fiscal years 2009 and 2010, but identifies budget gaps of $4.6 billion in fiscal year 2011, $5.2 billion in fiscal year 2012 and $5.4 billion in fiscal year 2013.
The Comptroller’s report finds that despite the potential for further tax revenue shortfalls in fiscal year 2009 ($350 million), New York City will end the current fiscal year in balance given a $3 billion projected surplus. The Mayor’s proposed budget for fiscal year 2010, however, includes $1.4 billion in budget risks and the budget gap for fiscal year 2011 could exceed $7 billion if these risks are not addressed.
The DiNapoli report found:
- Tax collections in fiscal year 2010 are expected to be $4 billon lower than projected one year ago, and $6.8 billion lower than projected two years ago.
- The proposed budget for fiscal year 2010 includes nearly $6.3 billion in nonrecurring resources.
- The City could end the current fiscal year (2009) with a $3 billion surplus, $2.2 billion more than projected at the beginning of the year. The additional resources come from actions taken by the City to help balance its budget, including a mid-year property tax hike and agency budget cuts, and benefits from the federal economic stimulus program.
- To bridge the remaining budget gap for fiscal year 2010, the Mayor and the City Council have agreed to ask the State to approve a package of tax initiatives that would raise nearly $900 million for next year’s budget. The initiatives include raising the sales tax by 0.5 percent to 8.875 percent; eliminating the sales tax exemption on clothing and footwear purchases over $110; and higher business taxes. The City’s financial plan also counts on the State enacting less costly pension plans for new City employees.
Click here for a copy of the report.