New York City’s securities industry reported record first-quarter profits of $8.2 billion, a bright spot in a largely downbeat report on the city’s budget released last week by New York State Comptroller Thomas DiNapoli.
The return to profits follows losses of $42.6 billion in 2008. The report, released ahead of a scheduled meeting today of the New York State Financial Control Board, which monitors city finances, found the city’s enacted fiscal 2010 budget was balanced but faces large deficits that will grow to $5.6 billion by fiscal 2013.
“The city is navigating through a very difficult economic period,” DiNapoli said in a press release. “While recent reports of strong Wall Street profits are encouraging, we can’t count on Wall Street to solve our budgetary problems. Balancing next year’s budget could be painful.”
Surplus revenue from prior years and actions taken to help balance the current year’s budget will have produced a $2.8 billion surplus in fiscal 2009, despite a $1.5 billion revenue shortfall.
The current budget includes $6.6 billion of nonrecurring funds and DiNapoli said the city has used up most of the surplus resources that it accumulated during the economic expansion.
Not counting recent property, sales and business tax increases, city tax collections dropped by $3.3 billion in fiscal year 2009 and are projected to fall a further $2.4 billion in the current fiscal year. The city has lost 115,700 jobs, including 25,800 in the securities industry over the past year, the report said.