New York City Budget Progress Made on 2010 Gap
DiNapoli: Federal Stimulus Aids Budget but Need for Long-Term Reform Remains
New York City will end its current fiscal year with a balanced budget given its substantial reserves, according to a report New York State Comptroller Thomas P. DiNapoli released today. DiNapoli’s review also found that the City has made considerable progress in closing the fiscal year 2010 budget gap, despite a projected two-year decline in tax revenues of $5 billion due mostly to the deterioration in the national and local economies.
“New York City faces its greatest fiscal challenge in decades,” DiNapoli said. “The Mayor and the City Council have been proactive in reducing spending and revising expectations, but difficult decisions remain. Conditions are likely to get worse before they get better, and the City will need to bridge looming gaps in future years.”
The DiNapoli report found:
- The deterioration in the economy has widened the projected budget gaps since the beginning of the current fiscal year by about $3.5 billion annually to $7.7 billion in FY 2010 and about $10.5 billion in subsequent years;
- Although New York City has made considerable progress in closing the FY 2010 budget gap, many of the initiatives proposed by the Mayor to balance the budget still require the approval of the State and the municipal unions;
- The City’s financial plan includes $2.1 billion in budget risks for FY 2010, and the FY 2011 budget gap remains $6 billion;
- The City’s four-year financial plan is likely to undergo significant changes after the State adopts a new budget and acts on the City’s budget proposals, the benefits of the federal economic stimulus bill are taken into account, and the City addresses known budget risks; and,
- The federal stimulus bill recently signed into law by the President will help New York State and New York City balance their budgets and will offset cuts in State education aid proposed by the Governor to help balance the State budget. While the federal stimulus bill will provide relief over the next two years from a deepening recession, the need for governmental reform has not been diminished given the long-term trends.
Click here for a copy of the report, or visit the OSC Web site at www.osc.state.ny.us