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DiNapoli: NYC Tax Collections Stronger Than Anticipated

City Projects Surplus of $3.5 Billion in Current Fiscal Year

May 31, 2019

New York City is projecting a surplus of $3.5 billion in fiscal year (FY) 2019, which it plans to use to help balance the $92.5 billion proposed 2020 budget, but tax collections continue to exceed expectations. The surplus results mostly from resources from the citywide savings program, a reduction in unneeded reserves in the current fiscal year and higher-than-expected revenues, according to a report released today by State Comptroller Thomas P. DiNapoli.

“New York City’s economy is strong and its finances face few immediate risks,” DiNapoli said. “Although trade tensions or some unforeseen development could trigger an economic setback, Mayor de Blasio and the City Council have increased the city’s reserves to a record $5.7 billion level. The likelihood of unanticipated tax collections in the current fiscal year could create an opportunity to further increase the size of the city’s reserves.”

The city currently projects budget gaps of $3.5 billion in FY 2021, $2.9 billion in FY 2022 and $3.2 billion in FY 2023. The gaps for fiscal years 2021 and 2022 are about $600 million larger than projected a year ago. While higher agency spending and labor costs are the main factors behind the growth, the state budget includes actions that shifted costs and created new financial responsibilities to the city.

The budget assumes that while the city’s economy will slow during the financial plan period, growth remains strong, increasing the likelihood of unanticipated tax revenues. The budget projections for fiscal years 2020 through 2023 include a general reserve of $1 billion and a capital stabilization reserve of $250 million, which, if not needed, could be used to narrow the gaps.

Read the report, or go to: https://www.osc.state.ny.us/osdc/report-3-2020.pdf

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