New York City tax collections during the next four years will come in $5.56 billion above Mayor Michael Bloomberg’s revenue projections, according to a report from the city’s Independent Budget Office.
The IBO Tuesday released its analysis of Bloomberg’s fiscal 2012 executive budget and his financial plan through fiscal 2015.
Compared to the city’s Office of Management and Budget calculations, the IBO anticipates stronger employment growth from fiscal 2011 through fiscal 2015. That difference accounts for the IBO’s higher tax-collection projections for the city. Fiscal 2012 begins July 1.
According to the report, New York City will collect $41.62 billion of tax revenue in fiscal 2012 — $308 million above administration estimates. The IBO expects total tax revenue to increase to $48.1 billion in fiscal 2015, which is $2.55 billion more than the administration’s revenue projections.
Bloomberg and the IBO also differ over future budget deficit estimates.
While the administration anticipates the city will face shortfalls of $4.76 billion, $5.08 billion, and $5.26 billion in fiscal 2013, 2014, and 2015, the IBO expects those deficits to total $4.13 billion, $3.33 billion, and $2.84 billion, respectively. That’s a difference of $1.75 billion in fiscal 2014 and $2.42 billion in fiscal 2015.
The mayor did not include any new taxes or tax increases in his $66 billion fiscal 2012 executive budget. Instead, he proposes keeping spending in line with revenues with $5.4 billion of savings among city agencies and plugging the budget with $3.2 billion of surplus funds. He also announced reducing teacher positions by 4,000.
While the IBO projects smaller budget deficits for the city, it questions the administration’s ability to balance future spending plans with expenditure cuts alone, especially as it does not expect the city to have $3 billion of surplus revenue in future years to help fill budget gaps.
“At this time we do not project a surplus nearly that large for 2012 and help from Albany or Washington seems very unlikely,” according to the report. “So the 2013 budget must mostly be balanced with measures to cut costs or raise local revenues.
As the cuts mount it may become increasingly difficult to maintain levels of service expected by the public.
Whether the budget can continue to be balanced with a focus on just the spending side of the city’s ledger is a key question facing the mayor and [the City Council].”
The IBO is a nonpartisan fiscal agency that produces budget reviews, revenue forecasts, and policy analysis. It is publicly funded.