New York City’s fiscal outlook “could darken quickly” because of escalating costs for labor, the Independent Budget Office said Tuesday.

In its analysis of the city’s updated $72 billion executive budget and financial plan through 2017, the watchdog agency projects New York will end the current fiscal year with a $2.1 billion surplus, which parallels Mayor Michael Bloomberg’s  projections. The IBO also envisions a $476 million surplus in 2014, followed by a “relatively modest” out-year shortfall of $930 million.

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