New York City will end its fiscal year this month with a $6.5 billion surplus, state Comptroller Thomas DiNapoli projected last week in a review of the city’s financial plan.
“The city continues to manage its finances in a fiscally prudent manner and that has enabled the mayor to propose a balanced budget for fiscal year 2009 that is based on reasonable assumptions,” DiNapoli said in a press release. “While the 2010 budget gap appears manageable with more than one year before the start of that fiscal year, the gaps projected for fiscal years 2011 and 2012 present a greater challenge. Much will depend on the depth and the duration of the national and local economic slowdowns.”
The surplus includes $2.5 billion that was rolled over from fiscal 2007. The city’s tax collections exceeded forecasts by about $2.3 billion during calendar 2007 in part from strong capital gains and earnings from hedge fund managers,
The city has projected that non-property taxes will decline by 10.4%, or $2.6 billion due a short local and national recession during which the city will lose about 90,000 jobs, the report said. The effect of those hits to the economy will likely be mitigated by a growth in property taxes during fiscal years 2009 and 2010. Outyear budget gaps rise to $7.1 billion by fiscal 2012 but could be reduced if the city raises property taxes and lowers health insurance costs through negotiations with municipal unions, the report said.
