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"This year will be a difficult one for the city's finances and the next year will be even harder," New York City Comptroller William C. Thompson, Jr. said in his remarks before the New York State Financial Control Board today. Thompson cited the city's economic difficulties and offered several proposals to tackle looming budget gaps.

Comptroller Thompson urged the state to fund outstanding education aid. "There are approximately $547 million in aging education aid receivables on the City's books. State legislation allows the City to reduce this backlog by $435 million using funds borrowed through the Municipal Bond Bank. Although this transaction will supply needed cash, it will not help close the budget gap, since the revenue has been previously accounted for under Generally Accepted Accounting Principles. This reduction of the education aid receivable balance to $112 million will enable my office to recognize an additional $206 million in prior-year school aid which had not been booked as the outstanding balance was deemed too high. The State must promptly pay this remaining school aid balance of $318 million in order to provide the City with necessary cash," Thompson said.

Thompson also recommended that the Federal government adjust its funding formulas to ensure that New York City receive its fair share of Medicaid funded dollars and called on the State to reinstitute the commuter tax with a sunset provision.

Additionally, the Comptroller said the current quarterly review by the city's fiscal monitors should be increased to monthly "to ensure swift identification of any shortfalls. A monthly monitoring process with measurable milestones, regular reporting and individual accountability will allow the City to quickly identify and correct problems in its gap-closing initiatives."

"Implementing these proposals will help the City close the growing budget gap in fiscal year 2003 and beyond," Thompson said. "I look forward to working with the members of the Financial Control Board to ensure New York City's fiscal stability."

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