Wednesday, February 19, 2014

Everyone's got their hands out

From the NY Times:

A rosier-than-expected financial picture has left Mayor Bill de Blasio with an unanticipated predicament as he releases his first preliminary New York budget on Wednesday: how to hide a surplus that could easily exceed $3 billion.

The problem is not that the city does not have ways to spend it. Its 152 labor unions are demanding some $7 billion in back pay. Members of the City Council want to increase spending on social programs and repairs to public housing. And the mayor has his own ideas.

But if Mr. de Blasio acknowledges that there is extra money in the next budget, fiscal experts warn, it will become open season for different groups to make demands for it. “City Council members, member items — he doesn’t want a lot of time to go by with people coming up with their own priorities,” said Carol Kellermann, the president of the Citizens Budget Commission, a business-backed watchdog group.

Hence, the ritual game of hide and seek.

On the eve of the budget presentation, Mr. de Blasio’s aides played down the likelihood of a big surplus, saying that such talk was exaggerated and that there were many potential risks to the budget, like the unsettled labor contracts and reduced support for the city from the federal and state governments.

In his State of the City address on Monday, the mayor warned that the city was “in the midst of a budgetary challenge that is unprecedented.”

Still, the numbers are the numbers: The Independent Budget Office projected in December that the city would have a surplus of $1.9 billion in the fiscal year that starts July 1.

On top of that, the Bloomberg administration accounted in its financial plan for 1.25-percent-per-year raises for municipal unions in this fiscal year and the next one — putting aside some $730 million for that purpose. If that money is not spent on raises, it will be added to the surplus.

Moreover, each year, sometimes as early as February, the city’s administration adjusts its financial plan to reflect both anticipated income that did not materialize and planned expenditures that did not end up being spent. Typically, the result has been a net gain of several hundred million dollars.


Jon Torodash said...

Why do people keep parroting that the IBO predicted a surplus?

The actual report is not nearly so unambiguously confidently optimistic as suggested by the NY Times.

Anonymous said...

The NYC debt is over $100 billion. (That's about $12000 for each NYC resident.) How about using the surplus to pay off some of the debt?

Anonymous said...

There's no "surplus" until (a) every public employee union without a contract gets one and the budget is updated to reflect the new costs, and (b) every dime to fund every future public employee pension payout is held in a trust that the city cannot tap.

Anonymous said...

There is plenty of money but everyone is so passive THEY don't get much while the hose is turned on to cronies and tax breaks for developers.

Push back.

Demand sacred cows are sacrificed. Demand an end to tax breaks.

Anonymous said...

commentor 2: You are correct! How do you have a surplus when the city owes so much debt?! Someone please explain that to me! Teachers unions and court workers have gone years without a contract, mta contract is ticking and so is the LIRR! So someone explain to me how we have a surplus?

Anonymous said...

Someone explain to me how we have a surplus???

Well, Bloomberg was mayor or 3 years..and before that he is a wealthy businessman. A businessman knows how to save and create money..not your politician who just knows how to spend.

Deke DaSilva said...

I'm old enough to remember back in 2001, when there was talk of the possibility of eliminating the U.S. Treasury debt market, due to the budget surplus.

13 years, and $17 trillion dollars more, and how's that experiment going????

de Blasio will have no problem finding ways to blow this "surplus"

J said...

a businessman knows how to cook the books and fudge the numbers,the corporation funsize mayor knew exactly what he was doing.this deceiving surplus he left behind is only for his legacy and is intended to make people nostalgic for him.which is why he feigned disgust and outrage when blaz was running last fall.bloomberger made his victory possible.

It may sound crackpot,but businessmen can be shrewd,calculating,manipulative devils.

and the blaz has kept and hired former some of his former staffers for posts like education and city planning.