NYC Budget ‘More Vulnerable Than in Recent Years,’ DiNapoli Says
(Bloomberg) -- New York City’s strong economy will generate enough revenue to produce a surplus in its $91 billion budget this year, but signs of a slowdown will heighten risks of significant deficits in 2020 and beyond, state Comptroller Thomas DiNapoli said in a report Wednesday.
Between 2009 and 2017, the most populous U.S. city added 715,000 jobs, in its largest and longest job expansion since World War II. Employment reached a record 4.4 million, while the jobless rate of 4 percent is a 42-year low. Securities industry profits were up 15.7 percent during the first three quarters of 2018, on track for its third-consecutive year of increased profitability.
Still, recent declines and increased volatility in financial markets could reduce profitability in the fourth quarter, DiNapoli said. While the city’s financial plan anticipates uninterrupted growth, its economy could worsen, triggered by rising trade tensions and a slowing global economy. At the same time, the city’s subways, buses, hospitals and public housing need billions of dollars, he added.
“While the FY 2019 budget surplus is likely to grow, city officials will need to consider additional actions to narrow the budget gaps projected for fiscal years 2020 through 2022,” DiNapoli said in a statement accompanying his report. “While the economy is still strong, it appears more vulnerable than in recent years.”
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