The city’s fiscal 2011 budget passed in June “faces significant risks and uncertainty” even though it is balanced, according to a report released last week by state Comptroller Thomas DiNapoli.
“The mayor and the City Council have managed the city’s finances prudently and there are encouraging signs that economic recovery is taking root, but New York City still faces considerable risks associated with federal and state aid that may not materialize as hoped,” DiNapoli said in a statement. “Although the federal government played a major role in helping state and local governments weather the economic downturn, future assistance may be limited.”
The comptroller said the city’s 2010 fiscal year is expected to end with a $3.6 billion surplus, but the city “is still feeling the effects of the global economic recession.”
Wall Street, which earned a record $61.4 billion in 2008 and $10.3 billion in the first three months of this year, is contributing to the project surplus, the comptroller said.
DiNapoli said the 185,500 jobs in the city were lost due to the recession and while the state budget has yet to be passed, aid to the city may be cut by $1.1 billion.
“The recession has been less severe in New York City than in the nation and other parts of New York state, and less severe than first feared, but the impact has been painful nonetheless,” the report said.
DiNapoli said the creation of 49,800 private sector jobs and strengthening tax collections “are among signs of a contributing economic recovery.”
Some of the significant risks DiNapoli referred to were the city’s reliance on $279 million in Medicaid relief “which may not materialize” and that the city faces losing $853 million in federal stimulus money that is earmarked to support education.
DiNapoli said as much as $6.8 billion in out-year budget gaps could be at risk by fiscal year 2014.
Reach reporter Howard Koplowitz by e-mail at hkoplowitz
©2010 Community News Group
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