New York City projects a balanced budget for fiscal 2015 and manageable out-year budget gaps under current economic conditions, State Comptroller Thomas DiNapoli told the Financial Control Board at its July 29 annual meeting.
"New York City is on solid financial footing with new labor agreements in place, a strong economy and increased reserves," DiNapoli said. "The city, however, still has work to do. It must conclude negotiations with the remaining municipal unions, obtain planned health insurance savings and narrow its projected budget gaps."
City Comptroller Scott Stringer was also scheduled to speak before the control board, established during the 1975 crisis to oversee and approve the city's budget. Stringer a day earlier said projected higher tax revenues and pension savings may narrow the outyear gaps.
"For the first time in several years, the budget provides for the cost of labor agreements, giving a clear picture of the city's finances," Stringer said. "The city will need to be prudent in managing expenses, including implementing a citywide agency savings and efficiency program, to continue to build up a budgetary cushion for future years."
In May, the city reached a new labor agreement with the United Federation of Teachers. Since then, several other unions have reached new agreements with the city, bringing the share of the workforce that has accepted the UFT pattern to nearly 60%. To help pay for the new labor agreements, the city and the unions have agreed to work together to reduce the cost of health insurance to the city by $3.4 billion, including $1.3 billion in recurring savings beginning in fiscal 2018.
The city forecasts a $2 billion surplus for 2014, which was used to help balance the fiscal 2015 budget. The city's financial plan projects budget gaps of $2.6 billion, $1.9 billion and $3.1 billion the following years. The gaps exceed those the city projected in February, reflecting the cost of collective bargaining agreements and new programmatic initiatives.
Still, according to DiNapoli, the gaps are significantly smaller than the historical average over the past 35 years when measured as a percentage of city fund revenues.
