The fiscal nightmare the city faces isn’t as bleak as first suggested – as long as state aid isn’t scaled back, according to budget projections released yesterday.
Job growth and improving business profits are expected to add $525 million more in tax revenues to the budget this year, the city’s Independent Budget Office forecasted. As a result, the current fiscal year will see a surplus of almost $1.7 billion.
Next year’s revenue also should improve – with another $790 million coming into the city’s coffers. The budget gap in 2012 could be about $1.1 billion.
“But these shortfalls could also swell by $2 billion or more a year if the state deals with its own fiscal problems by reducing aid to the city and other localities,” the IBO warned.
Last month, Mayor Michael Bloomberg announced a possible $2.4 billion budget gap in the next fiscal year. He blamed pension and Medicaid costs for pushing expenses higher and wanted to cut about 10,400 city jobs through fiscal 2012, which begins July 1.
“We are certainly not back to the boom times,” he said yesterday in response to the report.