New York City’s economy outpaced the nation over the first three quarters of the year, helping to strengthen the City’s financial position, according to an analysis by New York City Comptroller Scott M. Stringer of the City’s 2014 November Financial Plan.
“New York City is in a strong financial position, with revenue coming in higher than projected,” Comptroller Stringer said.
“Until we see a slow-down in revenue growth, out-year budget gaps should remain manageable throughout the four-year financial plan.
The City is prudently managing its expenses, including implementing the new citywide agency savings and efficiency program, to continue to build up a budgetary cushion for future years.”
The Comptroller’s report “The State of the City’s Economy and Finances” is submitted to the City Council in accordance with the New York City Charter mandate that the Comptroller evaluate the City’s most recent financial plan and present his findings on the condition of the City’s economy and finances.
The November Plan shows a FY15 budget of $76.94 billion. However, that figure does not include the labor costs for the tentative labor agreements announced after the release of the November Plan with the school supervisors and administrators and the uniform superior officers that are above the pattern funded in the budget.
The Comptroller’s Office forecasts that tax revenues could be higher by $522 million in FY15, $668 million in FY16, $966 million in FY17, and $1.29 billion in FY18.
After accounting for the Comptroller’s Office’s budget risks, including the full labor cost of the uniformed superior officers’ agreement extended to the unsettled uniform unions and other offsets, the Comptroller’s restated budget gaps are: $1.46 billion in FY16, $516 million in FY17 and $780 million in FY18.
The report also looks at the actual expenditures and revenues from the close of FY14. Despite $3.5 billion in new revenue, for the sixth consecutive year, the City depleted its existing budget cushion faster than it accumulated new resources for the future.
The City has created 350,000 new jobs over the past four years and has finally started to make a dent in the unemployment rate.
Despite the strong job growth, wage gains have remained tepid as growth skewed towards relative low wage industries and, with a few exceptions, overall wage growth for existing jobs has been sluggish.
The City’s jobless rate fell to 6.4 percent in October of 2014, well below the 8.7 percent measured in October 2013.
The decrease in the City’s overall rate has helped to alleviate joblessness across demographic groups. By the third quarter of 2014, the unemployment rate dropped for Black New Yorkers by 2.8 percentage points and among Hispanics by 4.2 percentage points since the same quarter of 2013.
“Too many of the jobs we’re creating are in the low wage industries and not enough New Yorkers are feeling the economic recovery in their paychecks,” Stringer said. “We must continue to find ways to foster an economy that works for all.”