Angry New Yorker

Saturday, May 17, 2003

May 16, 2003 -- The city faces a series of frightening budget problems in the years ahead, a disturbing new report warned yesterday. The Independent Budget Office forecast that city government expenses will grow at a rate more than twice that of revenues over the next four years - creating a huge sea of red ink year after year.
* * * *

The IBO said total expenditures will jump from a projected $44.3 billion this year to $45.9 billion next year - a 3.6 percent increase. The agency estimated that, through 2007, spending will rise at an average annual rate of about 3.7 percent, while revenues will increase just 1.7 percent over the same period.

At that rate, total city expenses would reach $51.2 billion by 2007, up $5.3 billion from fiscal year 2004. Revenues will grow by $3.2 billion, up to $47.2 billion in 2007, leaving the multibillion-dollar deficit each year. Growing amounts of debt service, higher pension costs and escalating fringe benefits for municipal workers are the central reasons for the differential.

The IBO report found:

* Debt service will grow at an average rate of 18.6 percent - from just more than $2.7 billion to slightly less than $5.4 billion - over the next four years.

* Pension costs are slated to triple over the same time period, up to nearly $4.9 billion in 2007.

* Fringe-benefit expenses will grow at a more modest 6.3 percent in each of the next four years, up to roughly 3.4 billion in 2007, excluding public-school employees.

All told, spending on these three items will increase $2.9 billion in fiscal year 2004, which starts July 1.

"The mayor has cut discretionary funding by more than $3.2 billion," said Mayor Bloomberg's spokesman, Jordan Barowitz.
"Fixed costs beyond the city's control, such as Medicaid, pensions and debt service, are responsible for our expenditures outpacing our revenue," Barowitz added." [more]

Comments: Post a Comment

This page is powered by Blogger. Isn't yours?