The New York City treasury will end fiscal year 1999 with an $843 million surplus under the recently adopted budget, according to an analysis released on June 16th by IBO. This surplus will include $543 million in excess revenues and $300 million reserved in the budget stabilization account.
The sizable surplus results in large part from IBO's forecast that local tax revenues overall will be substantially higher than assumed in the adopted budget. IBO's estimate of non-property tax revenues are $530 million above the projection provided by the Mayor to the City Council, while IBO forecasts $165 million less in property tax collections than in the adopted budget. A detailed discussion of the debate over property tax rates and the Mayor's actions concerning recently mailed property tax bills is included in IBO's analysis. The report also discusses tax policy changes, such as elimination of the personal income tax (PIT) surcharge and other reductions in the PIT through credits for taxpayers with child and dependent care expenses and shareholders in S corporations (a type of small corporation whose shares are not publicly traded).
IBO projects $804 million more in state and federal aid than assumed in the budget, but such additional aid will be fully spent during the year and therefore will have no net effect on projected surpluses or gaps.
The report also describes a number of IBO expense reestimates and highlights major spending differences between the adopted budget and the Mayor's executive budget. Details are provided for selected agencies such as the Administration for Children's Services, the Board of Education, and the Police Department among others.
With completion of the budget, attention will now shift to budget implementation. The Charter provides the Mayor with substantial powers in deciding when and if appropriations should be spent by agencies, but it appears to stipulate that funds can only be withheld from expenditure (or impounded) if a fiscal emergency arises making such actions necessary. (Refer to the article Implementation of the Fiscal Year 1999 Budget in this newsfax for a more detailed discussion of the Mayor's recent refusal to certify the adopted budget.)
For a copy of IBO's Analysis of New York City's Adopted Budget for 1999, go to the Publications Section of this site or call 212-442-0632.