New York City’s economy is performing better than state Labor Department analysts had projected and may generate 163,600 more jobs than forecast over six years, the Independent Budget Office said.
The revision calls for job gains of 435,000 from 2011 through 2016, up from an original estimate of 271,400. The employment growth will produce only a modest boost in tax revenue because most new jobs will come from outside the financial industry, said the budget office, a non-partisan monitor of city finances.
The city will have a $1.35 billion surplus this fiscal year, a $544 million surplus next year and a $2.18 billion deficit in 2014, the IBO said today. The mayor had projected balanced budgets this year and in fiscal 2013, with a $3 billion deficit in 2014. The city’s fiscal year begins July 1.
Tax revenue may rise 4.3 percent this fiscal year to $41.4 billion. In 2013, tax collections may increase an additional 5.5 percent to $43.6 billion, and by 2016, it may reach $51 billion, the IBO predicted. Bloomberg proposed a $68.7 billion budget for the most populous U.S. city in February.
“Our projections are built off job numbers that were substantially revised by the state Labor Department after the mayor released his budget plan,” the budget office said.
Education, Health Care
Three-quarters of the new jobs will be in education; health care and social assistance; professional and business services; leisure and hospitality; and wholesale and retail trade. Wall Street jobs will add about one of 37 new jobs through 2016, the IBO said.
Tax collections from Wall Street-related activities accounted for as much as 13 percent of city tax revenue before the financial crisis of 2008, falling to less than 7 percent last year, state Comptroller Thomas DiNapoli said in February. They contributed about 20 percent to New York state’s tax revenue, falling to about 14 percent last year, he said.
“We agree with the IBO’s assessment that the city’s increase in job growth has been dramatic, but the revenue picture from Wall Street remains murky and we need to maintain our discipline in the budget to keep it balanced,” said Marc LaVorgna, a mayoral spokesman.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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