Stronger than expected tax revenue has narrowed out-year budget gaps for New York City, said city Comptroller Scott Stringer.
Citing an analysis by his office, Stringer, briefing reporters Wednesday at the municipal building in lower Manhattan, estimated that the gaps would be $1.8 billion in fiscal 2016, followed by $406 million and $914 million the following two years.
Revenue projections exceed the financial plan Mayor Bill de Blasio presented last month by $131 million in fiscal 2014 followed by $881 million, $983 million, $1.65 billion and $2.37 billion in the subsequent years.
"The big driver is the personal income tax." said Deputy Comptroller of Budgets Tim Mulligan.
The 51-member City Council must approve de Blasio's proposed $73.9 billion budget by July 1.
According to Stringer, the city's nine-year contract with the United Federation of Teachers "eliminated uncertainty about one of our largest budget obligations."
The teachers have worked without a contract since 2009. This deal could form the basis for unsettled contracts with 152 other municipal unions.
Stringer has maintained that budget uncertainty entering the new fiscal year, which starts July 1, could jeopardize the city's bond ratings. Moody's Investors Service rates the city's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
The UFT on Tuesday approved the deal with the city's Department of Education. According to a UFT statement, more than 77% of members approved the contract.
Stringer estimates the gross cost of the teachers contract pattern at $19.6 billion, including wages and salaries for unions whose seven-year contract extends beyond fiscal 2018. He estimates the net cost of the deal at $7.3 billion when factoring in health-care savings.
Anthony Figliola, vice president of consulting group Empire Government Strategies in Uniondale, N.Y., is skeptical.
"They have to be more open and transparent about how they're going to pay for this," he said. "Nice colors and hues of blue on a chart don't tell you anything."
According to Stringer's report, projected debt service expenditures, excluding the impact of prepayments, in the modified plan are $5.79 billion in fiscal 2014, followed by $6.84 billion, $7.42 billion, $7.66 billion and $7.92 billion, all down from the modified plan.
Stringer said the $27 million decrease in the fiscal 2014 debt service estimate is the result of offsetting baseline adjustments. The primary drivers of the following year's decrease, he said, are $60 million in general obligation bond savings, and $9 million of New York City Transitional Finance Authority savings.
The city, Stringer added, may still achieve significant savings in fiscal 2014 from variable rate interest on long-term debt.
Figliola said the city should worry about unfunded pension liability.
"What I haven't seen in either the preliminary or updated plan is any mantra over how to deal with more than $1 trillion that the city is incurring and is ticking upward," said Figliola.
"People want to kick it to the next administration. Someday, someone is going to have to get a handle on it because this could potentially sink the city."
