New York City’s economy is recovering from the recession at a faster pace than the nation and the rest of New York State. Since job losses ended in November 2009, the City has gained 73,400 private sector jobs, or half of the jobs lost in the recession, but public sector job losses are beginning to accelerate. While the unemployment rate has declined from a peak of 10 percent to 8.9 percent, it remains unacceptably high.

New York City’s May 2011 financial plan (the “May Plan”) projects a surplus of $3.2 billion for FY 2011, resulting largely from a drawdown in reserves, higher revenues due to an improving economy, and agency cost-reduction actions. The City intends to transfer the surplus to FY 2012 to help balance that year’s budget.

On June 29, 2011, New York City adopted a $65.9 billion budget ($46.5 billion in City funds) for FY 2012, which began on July 1, 2011. While the budget is balanced, it relies on $5.1 billion in nonrecurring resources, including the FY 2011 surplus and a drawdown from the Retiree Health Benefits Trust. These resources will have to be replaced in subsequent years, and even though the City’s economy is slowly improving, the June 2011 financial plan (the “June Plan”) projects budget gaps that average $4.8 billion during fiscal years 2013 through 2015.

On November 18, 2011, New York City issued a revised financial plan covering fiscal years 2012 through 2015 (the “November Plan”). Mostly as a result of unplanned spending in the uniformed agencies, the out-year budget gaps have grown by half a billion dollars to $5 billion in FY 2013 and about $5.5 billion in both FY 2014 and FY 2015.

In June 2011, New York City projected a balanced budget for FY 2012 but a large budget gap of $4.6 billion in FY 2013, and even larger gaps in subsequent years. On February 2, 2012, the City issued a revised financial plan (the “February Plan”). The City has closed the FY 2013 budget gap and narrowed the outyear gaps to $3 billion in FY 2014 and about $3.5 billion in subsequent years. Most of the improvement comes from freeing up reserves (nearly $5 billion), proceeds from the anticipated sale of taxi medallions ($1 billion) and savings from agency actions.

Nearly one year ago, New York City adopted a balanced budget for FY 2012, but projected a budget gap of $4.6 billion for FY 2013, and even larger gaps for subsequent years. On May 3, 2012, the Mayor issued his executive budget for FY 2013 and an associated four-year financial plan (the “May Plan”). The City now projects a modest surplus for FY 2012, a balanced budget for FY 2013, and out-year budget gaps that average $3.3 billion.

One year ago, New York City projected a budget gap of $4.6 billion for FY 2013 and out-year gaps that reached $4.9 billion. Since then, the City has successfully closed the FY 2013 budget gap and narrowed the FY 2014 budget gap to $2.5 billion without raising taxes or cutting basic services. Most of the improvement, however, has not come from higher revenue forecasts, but from drawing down reserves and other nonrecurring resources.

On November 9, 2012, Mayor Bloomberg revised New York City’s four-year financial plan (the “November Plan”) to reflect a delay in the planned sale of additional taxi medallions caused by legal challenges. Previously, the City’s financial plan had counted on the receipt of $635 million from the sale in FY 2013, and a total of $1.5 billion over three years. The City no longer anticipates the receipt of any sale proceeds in the current fiscal year, and now expects to realize $1.5 billion during fiscal years 2014 through 2016.

On January 29, 2013, Mayor Bloomberg released his executive budget for FY 2014 and the associated four-year financial plan (“the January Plan”). The January Plan reflects the City’s failure to reach agreement with the United Federation of Teachers on a new teacher evaluation system, which may result in the loss of $250 million in State education aid and cuts in educational services. The January Plan also reflects the estimated cost of Superstorm Sandy.

On May 2, 2013, the Mayor released his executive budget for FY 2014 and the associated four-year financial plan (“the May Plan”). The May Plan reflects the estimated impact of federal sequestration, the cost of Superstorm Sandy and the enacted State budget. Although the May Plan projects modest budget gaps beginning in FY 2015, the City has yet to reach new labor agreements with its unions.