New York City’s finances contain risks and one-time revenue that may require cuts to reduce spending next year, the state Financial Control Board said today at its annual meeting.
The board, created to oversee city finances during the 1970s fiscal crisis, also credited Mayor Michael Bloomberg for balancing the $68.5 billion budget for fiscal 2013 on time.
In his presentation at the meeting, the mayor cited the record number of jobs and tourist visits, rising graduation rates and an average life expectancy three years higher than the U.S. average as evidence the city’s economic future is sound. He also mentioned a thriving film- and television-production industry and the creation of more than 140,000 units of affordable housing.
“New York City has made a 180-degree turnaround since 1975, when the board was formed to help draw the city back from the brink of fiscal ruin,” Bloomberg said.
Some members described as a risk the city’s reliance on $635 million from the sale of taxi medallions, a plan being held up by litigation. Jeffrey Halis, president of Tyndall Management LLC and a board member representing the financial industry, questioned whether New York could sustain future costs of pensions and retiree health care.
The city’s spending plan estimates a $2.5 billion deficit to be closed in fiscal 2014, or about 3 percent of a projected $72.4 billion budget.
“The increasing use of nonrecurring actions to balance fiscal 2013 has left large out-year gaps still to be dealt with,” said Jeffrey Sommer, acting board executive director. “The city will need to continue its practice of developing agency actions during fiscal 2013 in order to deal with the out-year budget gaps.”
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.