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New York City Comptroller William C. Thompson, Jr. today released the last of three charter-mandated reports containing the Comptroller's analysis of the Mayor's Executive Budget. The report, which examines the outyear impact of the Mayor's proposals, finds that even if the City successfully implements all of its Fiscal Year 2003 gap-closing strategies and ends the year in balance, it still faces gaps exceeding $4 billion annually in each of FYs 2004-2006. Moreover, the Comptroller's analysis demonstrates that the deficits facing the City will be even larger than the Mayor anticipates.
"New York City's budget contains an embedded structural imbalance," said Thompson. "This means that the City's revenue base is insufficient to support planned levels of spending. If the City is to solve this problem, it must implement a long-term strategy to achieve structural balance. It must take those actions necessary to bring its revenues and expenditures into alignment."

The Comptroller's analysis indicates that the City's revenue base is inadequate to support its ongoing level of expenditures. The problem was masked in the late 1990's due to the extraordinary budget surpluses brought about by an unprecedented economic boom. The embedded structural imbalance became apparent as a result of the national economy recovering from a significant slowdown and the City's jobs recession. The combination of the recession and the impact of the September terrorist attacks has left the City with serious financial difficulties.

The first of the three reports, issued May 2, evaluated the assumptions and methodologies used by the Mayor in making the revenue estimates contained in the budget. The second, released May 9, analyzed the risks and shortcomings in the FY 2003 budget.

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