City Budget Not As Bad It Looks: Report

The Independent Budget Office has run their own numbers and has issued a report that shows that the city’s budget outlook is not as dire as Mayor Bloomberg would have us believe.

“Based on IBO’s tax and spending projections under the Bloomberg Administration’s November 2011 Financial Plan, we estimate a budget shortfall of $1.2 billion in 2013, nearly $800 million less than the Mayor,” the authors of the report state. “For 2014, our gap projection is $2.2 billion, $1.7 billion less than the Mayor’s; for 2015 our gap estimate is $1.9 billion, nearly $3 billion below the Mayor’s. “

The report also states that they expect job growth to outpace the predictions of Mayor Bloomberg, as they forecast 89,000 new jobs in the city over the next two years, 27,000 more than the mayor’s own report foresees.

The city’s budget condition is set to become a major political football over the next several months as the mayor orders another round of cuts to city agencies.

The report notes that there remain several factors afoot that could contribute to a steep downturn in their projections, including the failure of the Eurozone, declining aid from Washington or Albany, or overly-generous settlements with the city’s labor unions.

The full report can be viewed here.

 

Comments

  1. Larry Littlefield says:

    “The report notes that there remain several factors afoot that could contribute to a steep downturn in their projections, including the failure of the Eurozone, declining aid from Washington or Albany, or overly-generous settlements with the city’s labor unions.”

    Or paying enough into the pensions to start getting them out of their massive hole.  Or even not digging the hole any deeper.  We have not begun to pay for all the retroactive pension enhancements of 1994 to 2008.  Let alone whatever future ones the geriocracy in the state legislature will grant.

  2. Larry Littlefield says:

    “The report notes that there remain several factors afoot that could contribute to a steep downturn in their projections, including the failure of the Eurozone, declining aid from Washington or Albany, or overly-generous settlements with the city’s labor unions.”

    Or paying enough into the pensions to start getting them out of their massive hole.  Or even not digging the hole any deeper.  We have not begun to pay for all the retroactive pension enhancements of 1994 to 2008.  Let alone whatever future ones the geriocracy in the state legislature will grant.

  3. Larry Littlefield says:

    Read the report.  The IBO assumes there will be a massive cut in pension benefits for future public employees, far below what those now retiring were promised BEFORE all the retroactive pension deals.  Why is that fair?  Why is that assumed? Will the legislature pass it?  Have the unions quietly agreed to it, because future employees will be forced to pay dues anyway?

    Why does that save any money as the IBO asserts?  It doesnt’ change the existing pension hole, and this would not reduce contributions for years.  But I suspect the deal is going to this — just claim that the city doesn’t have to put in as much NOW because less will be needed LATER and can be borrowed against.

    And what will a huge cut in compensation ONLY for the workers the city will need to hire mean for the quality of public services, including education?  The IBO doesn’t care to ask.

    The IBO also assumes the city actuary will cut the expected future rate of return to 7.0%, but this has already been paid for.  Has it?  And is that rate of return realistic?  What about the GASB recommendations?  What happens when that rate of return is not achieved?

    The IBO assumes things will be OK because the serfs will pay more and get less, and costs will be deferred making things incrementally worse every year into the future.  Great — for former the producers of what used to be called public services.