New York City will end the current fiscal year with a $963 million surplus, or $828 million more than Mayor Bill de Blasio's estimate in his November financial plan, according to the Independent Budget Office watchdog organization.
"While some opinion leaders have warned that New York City is slipping back into the difficult times of the 1970s and early 1980s, there is little, if any, evidence to buttress such claims in terms of the city's near-term fiscal outlook," IBO said Dec. 21 in its
The organization projects a $320 million surplus for the upcoming fiscal year, 2017, more than erasing de Blasio's projection of a $1.2 billion shortfall for next year. "Although we project modest budget gaps for 2018 [$762 million] and 2019 [$822 million,] these amounts are substantially below the estimates presented in the mayor's November financial plan," IBO said.
IBO bases its projection of surpluses and gaps on a forecast of modest economic growth — and as a result a modest increase in tax revenues this year and only moderately stronger growth next year — coupled with estimates of similarly modest spending growth.
"On the spending side of the budget, we find that some costs will be higher than budgeted by the mayor," IBO said. "In addition, some new initiatives have been announced since the plan's release, further increasing planned spending. Still, these additional costs are relatively small compared with the city's total budget."
IBO projects spending on debt service to rise by $1.1 billion over the four-year financial plan period, when adjusted for the use of this year's expected surplus to prepay some of next year's debt service as well as other funds previously set aside for future years' payments.
It expects annual debt service costs are expected to rise from nearly $6.6 billion this year to $7.6 billion in 2019, an average annual growth rate of 5.2%.
Moody's Investors Service rates the city's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
