Report: Yonkers budget deficit at $89M
Yonkers is teetering on the edge of financial ruin and the city's ever-widening budget deficit may exceed a half-billion dollars over the next four years, according to a special commission's findings.
The group, led by former Lt. Gov. Richard Ravitch and former Assemblyman Richard Brodsky, estimated next year's budget shortfall -- after a monthlong review of the city's finances -- at $89.3 million.
"The gap between expenses and revenue is going to continue to grow," Ravitch said at an April 5 meeting with Spano and council members. "It's not a question of just getting through this year."
The commission's forecast comes just one week before Mayor Mike Spano will present his preliminary fiscal year 2013 budget to the city council.
Spano said the report foreshadows tough times for Westchester County's largest city.
"We are in a state of fiscal emergency," he said. "This delivers a dose of reality to our city. It is more obvious than ever that we face enormous fiscal challenges."
The report also projects the city's budget shortfall to rise to $102 million in 2014, $150 million in 2015, and $210 million in 2016.
Ravitch and Brodsky, both of whom have experience fixing big-city financial problems, said the review found that Yonkers lacks a long-term budget plan, which has added to the city's fiscal instability.
"That is astounding," Brodsky said. "The city needs a multiyear plan in order to bridge this gap."
Brodsky said the city can no longer afford "gimmicks" such as borrowing money to balance the budget.
Spano, a Democrat and former state Assemblyman who took office in January, has attributed most of the projected revenue shortfall to rising pension costs, state mandates and declining tax revenues.
Ravitch said one of the options on the table is to place the city under a state control board, which would have the power to circumvent union contracts and other financial obligations to reduce costs.
"That's one of the things the mayor will have to consider," he said.
That's a road that Yonkers has been down before, says Councilman John Larkin, the Republican minority leader on the dais, and one he personally would prefer the city not to go down again.
"I'd hate to see that happen, because we would give our control to another entity," he said.
Yonkers was under the watch of a control board from 1975 to 1996. Because of past financial problems, the state comptroller's office still has to review the city's budget before it goes into effect.
Spano will present his proposed budget to the council on April 16. The fiscal year begins July 1.