PROJECTED DEFICIT $500 MILLION HIGHER THAN CITY'S ESTIMATE

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New York City Comptroller William C. Thompson, Jr. today released his charter-mandated report on the Mayor's preliminary budget for FY 2004 and the City's modification of the FY 2003 budget and FYs 2004-07 Financial Plan. The Comptroller finds that the Governor's recently proposed Executive Budget would increase the City's fiscal burdens by over $800 million. As a result, the actual deficit for FY 2004, after accounting for offsets, may be $3.9 billion, $500 million higher than the City's projected figure.
Fortunately, steps already taken by the City Council and the Mayor to close this year's large budget deficit have left the City in balance in Fiscal Year 2003 with a small surplus to offset some FY 2004 expenditures. Despite these efforts, which have cut the projected Fiscal Year 2004 budget by $3.2 billion, the City projects a deficit of $3.4 billion for the fiscal year beginning July 1, 2003.
"When we take into account the impact of the Governor's Executive Budget and the shortcomings in the Mayor's budget proposals, as well as offsets contained in the Mayor's gap-closing initiatives, the City's deficit will increase to $3.9 billion," said Comptroller Thompson. "If the City and region are to overcome this fiscal challenge, it is essential that the State offer meaningful assistance."
The report also points out that the outlook for New York City's economy in 2004 is less promising than the nation's. It notes that in addressing the City's continuing economic struggles, the spending cuts and revenue enhancements initiated by the City Council and the Mayor thus far have served as the sole means by which the City has reduced the $6.4 billion budget deficit in FY 2004. Much of that reduction is the result of $1.7 billion generated from the 18.49 percent increase in property taxes.
"The deficit now faced by the City can be directly linked to the events of the September 11th terrorist attacks," said Comptroller Thompson. "Although the City has addressed the impact of the current recession with a substantial tax increase and large spending reductions, the nation as a whole must also share the additional costs associated with the September 11th attacks - an act of war on United States soil."
If Federal and State officials fail to provide meaningful support, the City will be forced to adopt draconian budgetary measures. Unfortunately, these actions will most likely include deep cuts in essential City services that will in turn further degrade the City's revenue base.
"We must now finish the difficult job of balancing the coming year's budget," said Comptroller Thompson. "I urge Albany and Washington to seek solutions that generate the recurring revenues and savings necessary to meet our short and long-term challenges."
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The full report is available on the Comptroller's web site at www.comptroller.nyc.gov.