Report: Thompson Projects Fiscal Year Likely to End in Balance

CITY MUST ACT QUICKLY TO AVERT A FISCAL CRISIS NEXT YEAR

New York City Comptroller William C. Thompson, Jr. today released his report on the State of the City's Finances. The report finds that the Fiscal Year 2003 gap-closing initiatives proposed by the Mayor and adopted by the City Council likely will close the FY 2003 deficit and establish sufficient reserves to ensure a current-year budget balance. However, the outlook for FY 2004 and the outyears of the financial plan presents a more daunting picture. Continuing softness in the economy, a lackluster stock market and the effects of the September 11th terrorist attacks continue to take their toll on the City's fiscal condition.

"The City has taken an important first step by detailing a comprehensive plan and taking actions within its control to address its formidable budget gaps," said Thompson. "It is crucial that early resolution be reached on the initiatives that require approval or agreement from other levels of government and the City's labor unions."

The Comptroller also said the City must make every effort to balance the budget by ensuring that its expenditures do not exceed its revenues. The report points out that the City recognizes the magnitude and severity of its fiscal condition, unlike during the 70's, when poor and inadequate accounting practices obscured the economic challenges confronting the City until it was in the middle of a fiscal crisis.

"The Mayor has presented a credible estimate of the budget deficits in the November Modification and along with the City Council has taken early actions to address the problems," Thompson said.

However, he pointed out that much remains to be done and the City cannot address the fiscal problem on its own without affecting essential services. In addition, Thompson said the Federal government must support the City's effort to overcome its fiscal difficulty.

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