The national recession and the troubled financial sector in New York City have opened up a $1.9 billion gap in the current fiscal year, city Comptroller William C. Thompson Jr. said in a report yesterday.
Thompson forecasts that the deficit will fall to $1.5 billion in fiscal 2010 and could then balloon to as much as $5 billion the following year.
The gaps are higher than those projected by Mayor Michael Bloomberg last month, however, when he estimated that the city faced a cumulative $4 billion budget gap for 2009 and 2010.
"The fiscal challenges facing New York City have deepened with every month that the paralysis of the nation's credit market continues," Thompson said in press release. "Waves of negative economic developments during fiscal year 2008 have given way to a tsunami of financial anxiety and caused us to issue a more pessimistic forecast than was put forth by the Mayor last month."
The recession could cause revenues in fiscal 2009 to drop by $935 million more than projected by Bloomberg, including a $525 million shortfall in real estate-related taxes, a $345 million drop in personal income and business taxes, and $65 million less in property taxes, according to Thompson.
