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View Thompson’s FCB remarks

Citing the City economy’s strong performance and prudent fiscal management by City Hall, New York City Comptroller William C. Thompson, Jr. today reported to the Financial Control Board that the City’s $59.1 billion budget for Fiscal Year 2008 is balanced.

“As a result of the City’s actions in FY 2007 and more optimistic revenue projects, budget gaps in fiscal years 2008 through 2010 have been either eliminated or significantly reduced,” Thompson said. “In addition to easily achieving mandated budget balance for FY 2008, the City’s Plan projects budget gaps of $1.55 billion in FY 2009 and $3.4 billion in FY 2010, much lower than the gaps of $4.584 billion and $4.069 billion projected for those years in the summer of 2006.”

Thompson issued his report – available at www.comptroller.nyc.gov - analyzing the FY 2008 adopted budget and FYs 2008-2010 Financial Plan as he spoke at the FCB hearing. In both the report and testimony, he noted the robust economy and housing market

“The revenue adjustments to the Financial Plan by my office reflect a slightly more optimistic economic forecast than that adopted by the City,” he said. “We project the gap in FY 2009 could be as low as $553 million, and the FY 2010 gap could be cut to approximately $3.1 billion dollars.”

While Thompson reported that the overall FY 2008 adopted budget totals $59.1 billion, he pointed out that this sum does not account for expenses that were prepaid in FY 2007. Once those amounts are included, the FY 2008 budget totals $62.2 billion, a 5.8% increase from the adjusted 2007 level.

The Comptroller said that the City is using several years of accumulated operating surpluses in an unprecedented multi-year expense reduction program, applying $6.52 billion in FY 2007 to reduce expenditures in FYs 2008, 2009, and 2010. The $6.52 alone approaches the level of general fund expenditures for the state of Alabama.

The calling of bonds and debt defeasance, which cost $1.254 billion in FY 2007, will save nearly $1.4 billion dollars in FYs 2008 though 2010.

“While we agree with the City that local economic growth will follow the lead of a slowing national economy, the Comptroller’s Office expects that the local housing market will not soften as much as the City’s forecast suggests. Our review suggests that tax revenues for this year and the next could total $1.4 billion more than the City’s forecast.”

Thompson further noted manageable risks associated with overtime spending and new education spending, and collective bargaining agreements, and that pensions, health insurance, debt service and judgments and claims would continue to drive spending growth.

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