Latest Budget Report Conflicts With Mayor's Read on City's Coffers
By Kiratiana Freelon on December 20, 2010 3:06pm
By Jill Colvin
MANHATTAN — In the third report to analyze the city's fiscal crisis in two weeks, the City's Independent Budget Office gave a sunnier-than-expected take on the city's budget woes.
Mayor Michael Bloomberg has been publicly gloomy about the city's financial situation over the next few years. But according to the IBO, the city is on track to collect more than half a billion dollars more in tax revenue this year than the administration had predicted. And it expects nearly $800 billion more than the mayor's office anticipated in fiscal year 2012.
The report credits a boost in jobs and business profits for the bump, which would be enough to significantly blunt the impact of the $1.6 billion in cuts to services announced by Bloomberg to close this year's deficit.
Nonetheless, the report cautions that any gains in city profits could be overshadowed by looming deficits in Albany. It estimates the state will face a shortfall of at least $9 billion for the upcoming year — the same amount cited by New York State Comptroller Tom DiNapoli in a report released last week.
"Perhaps the greatest risk to the city’s fiscal balance at this moment is the budget precipice upon which Albany teeters," the IBO writes.
"In effect, the state would be driving some of its problems down the Thruway and parking them at City Hall," it concludes.
City Budget Director Mark Page told the City Council at a hearing earlier this month that the city stands to lose $2 billion or more in funding from Albany. The city relies heavily on that aid.
Still, the IBO estimates the year will end with a surplus of nearly $1.7 billion and predicts a gap of $1.1 billion in 2012 and $3.2 billion in 2012 — $1.3 billion and $1.6 billion less than the administration had assumed.
"Based on the Mayor’s latest financial plan and our current revenue and spending projections, the city’s budget shortfalls have shrunk considerably and the gap for the upcoming fiscal year appears manageable compared with past challenges," the report reads.
At a press conference on Monday, the mayor downplayed the estimates.
While he said that revenues "are at or slightly better than what we projected," he warned of the impact of the state cuts.
"We do see that in New York City things are better. But that's not to say we don't need help," he said.
On the other side of the spectrum, State Comptroller Tom DiNapoli and City Comptroller John Liu released reports last week warning that the city's budget shortfalls could be even greater than the administration had predicted.