NYC Faces Budget Risks From ‘One-Shot’ Revenue, DiNapoli Says
“The city has relied heavily on reserves and other one- shot sources of revenue, leaving fewer reserves to cushion the impact of potential budget risks,” the comptroller said in the office’s annual report on the city’s fiscal condition.
DiNapoli also said the outlook for the most populous U.S. city continues to improve, citing newly released data showing that New York has regained the jobs lost during the 18-month recession.
Mayor Michael Bloomberg’s proposed $68.7 billion budget for the fiscal year beginning July 1 achieved balance in part by including $1 billion from the sale of taxi medallions and $1 billion from the Retiree Health Benefits Trust, a fund to pay future health costs.
Since June, the measures have helped close a $4.6 billion deficit for fiscal 2013 and narrowed estimated future gaps to $3 billion in 2014 and $3.5 billion in subsequent years, according to the report
The city may need more revenue or cost cutting in the next year due to the impact of Wall Street restructuring, the pace of economic growth, the prospect of less federal aid, unresolved contracts with teachers and other public workers, and the timing for when the city might reap revenue from the medallion sales, the comptroller’s report said.
“While the broker/dealer operations of the member firms of the New York Stock Exchange had a strong first half in 2011, they lost $4.9 billion in the second half,” the report said.
Wall Street’s $7.7 billion profit for the year represented its second consecutive decline by more than 50 percent and the lowest level of profitability since 2002, according to the report.
“While the securities industry in New York City has recovered about 40 percent of the jobs lost during the recession, job losses are expected to resume as the year progresses,” the report said.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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