Bloomberg News

NYC Will Face ‘Modest’ $811 Million Budget Gap in 2014

December 27, 2012

New York City’s projected deficit in the next fiscal year may have narrowed to $811 million, or about 30 percent less than Mayor Michael Bloomberg’s forecast last month, the Independent Budget Office said.

The publicly funded agency, a nonpartisan fiscal monitor, said in an annual report that the budget gap in the year beginning July 1 was “relatively modest,” amounting to about 1.6 percent of expected city-generated revenue.

Still, the most populous U.S. city and its next mayor, who takes office Jan. 1, 2014, will face higher unbudgeted expenses, such as unsettled contracts with teachers and other workers, costs of rebuilding after Hurricane Sandy and protecting against future storms, the agency said.

“When Mayor Bloomberg assumed office 11 years ago, he said he wanted to leave the city in better financial shape than he found it, and these numbers would suggest he’s done so,” said IBO Director Ronnie Lowenstein. “But the fiscal outlook might not be as bright as the gap numbers make it appear.”

William Thompson, 59, a former city comptroller who opposed Bloomberg for mayor in 2009 and has expressed interest in running in next year, said the report showed the mayor and City Council Speaker Christine Quinn “continue to kick the fiscal can down the road” by leaving contracts with city workers unresolved.

Potential Rivals

Quinn, 46, a potential Thompson rival for the Democratic mayoral nomination, didn’t have an immediate response to his comments, said Maria Alvarado, a spokeswoman. Her position doesn’t give her a formal role in bargaining over contracts with municipal unions.

The mayor, who’s legally barred from seeking a fourth term next year, intends to present a proposed budget for fiscal 2014, which begins July 1, by early February, said Marc LaVorgna, his press secretary.

In a November report modifying the current year’s $69 billion budget, Bloomberg announced $1.6 billion in spending cuts through June 2014, and said he still needed to close a $1.15 billion deficit for the coming fiscal year, a reduction from $2.5 billion forecast last June.

The IBO predicted more revenue than the mayor forecast in every category except sales tax, totaling $764 million more than the administration’s projections for the current budget year and the next combined. The agency also said the city probably would spend $428 million more than the administration had estimated during that period.

The IBO also forecasts 76,300 new jobs to be created next year, about 4,300 more than the administration estimated.

The mayor is founder and majority owner of Bloomberg news parent Bloomberg LP.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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