The Comptroller's Comments on The Economic Assumptions Underlying the Executive Budget for Fiscal Year 2003 (pdf)

New York City Comptroller William C. Thompson, Jr. is generally less optimistic than the Mayor regarding the economic assumptions for 2002 through 2004 contained in the Mayor's FY 2003 Executive Budget, according to a report released today by the Comptroller's Office. While the Comptroller found the Mayor's economic assumptions to be generally reasonable, his comments reveal that significant differences exist between the Comptroller's and the Mayor's conclusions.

"While in time the reconstruction of the World Trade Center may indeed provide a significant stimulus to the City's economy, in the short term recovery will be hindered by the loss of infrastructure from the World Trade Center attacks, especially the interference with transportation and the loss of downtown activity. It is also premature to expect a quick end to the current recession. Prosperity will not happen in the current year and the budget and financial plan must reflect this reality," said Thompson.

The report released today is the first of three reports to be released on the state of the City's budget, as required by Section 225C of the City Charter.

The Mayor's forecast for 2003 assumes that there will be a significant stimulus from the downtown rebuilding efforts and a rebound on Wall Street after the correction in 2001. The Comptroller does not believe that these premises are fully justified. The office space and activity that were at the World Trade Center have disappeared and will not be fully replaced for several years.

Similarly, the prediction that Wall Street will rebound in 2003 is heartening but may not be something that the City should count on. Layoffs on Wall Street continue suggesting that individual securities firms are not betting on a rapid turnaround. The risks that the Mayor has observed at the national level, including the possibility of another oil shock or major confidence-destroying incident related to global crises, bear directly on the future of Wall Street and on the City's economic future. The Comptroller also cited weakness in the City's high-tech industries, the recent rise in City commercial real estate vacancy rates, and the ongoing jobs recession.

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