New York City Budget Deficits May Be Larger Than Mayor Predicted, Liu Says
Although the city experienced less economic turbulence than most of the U.S. during the recession that began in December 2007, it faces budget gaps of $3.6 billion, $6 billion and $6.6 billion in the next three fiscal years, a report by the comptroller’s office said today.
Bloomberg’s Nov. 4 financial plan anticipated deficits of $2.4 billion, $4.8 billion and $5.6 billion in 2012, 2013 and 2014. The city’s fiscal year starts July 1.
“While many have argued that the pension system is to blame for rising budgetary constraints, it is merely one of many costs that the city incurs,” Liu said in a news release.
“As we have found, relying heavily on predictions of labor-contract negotiations and consistently underestimated overtime costs contribute to our budget gaps, especially when added to the expected loss of state aid and rising debt created by our expanding debt service,” he said.
A separate report today by state Comptroller Thomas DiNapoli also predicted that the city’s budget deficits may be “significantly larger depending on the outcome of the state budget, collective-bargaining negotiations and how the state and city replace expiring federal stimulus funds.”
The state will have to reduce aid to municipalities to close a more-than $9 billion deficit in the fiscal year beginning April 1, Governor David Paterson has said.
Marc LaVorgna, the mayor’s deputy press secretary, didn’t immediately respond to a request for comment.
The city gained 74,000 private-sector jobs, or about 6.6 percent of the national total, during the first 10 months of 2010, Liu said.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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