According to a government watchdog group, the city of New York will likely end up with a $1 billion budget surplus at the end of its fiscal year, even more than was initially predicted by Mayor Bill de Blasio.
A report from The Independent Budget Office found strong property and income tax revenue is expected to propel the city to a $963 million surplus – $828 million more than was estimated by the mayor’s office.
“While some opinion leaders have warned that New York City is slipping back into the difficult times of the 1970s and early 1980s, there is little, if any, evidence to buttress such claims in terms of the city’s near-term fiscal outlook,” the report found.
According to the nonpartisan report, the strong performance of the national economy over the last 79 months has also helped with economic expansions in New York City. The municipality added 95,000 annual jobs since 2009 and has also made more modest growth in funding for health care and education.
Much of the surplus comes from property and income tax revenue, which was stronger than predicted, and an increase in federal grants. The city generated $80.9 billion in revenue this year, the report found, which is $2.3 billion or 2.9 percent more than the previous fiscal year.
New York City’s projected budget surplus could fund mayoral programs including public housing expansions, after-school programs and paid parental leave for city employees.
Expanding city programs
The budget surplus will likely allow de Blasio to continue expanding and adding new city benefits and social aid programs. The mayor has already announced plans to provide around 20,000 municipal employees with six weeks of paid parental leave each year.
As The Wall Street Journal reported, the mayor’s new policy, enacted through an executive order, would allow nonunion employees 12 weeks of paid maternity, paternity and other parenting-related leave each year. Before the budget surplus was even discovered, the mayor’s office had already planned to fund the parental leave policy in the next fiscal year budget. The move would involve capping paid vacation leave for long-term employees at 25 days.
“The surplus will likely allow de Blasio to expand and add new city benefits and social aid programs.”
Unions will also be able to negotiate with the city to get their employees added to the policy, and several have already announced plans to do so, the Journal reported. According to The New York Times, providing this program to these 20,000 employees is expected to cost $15 million annually, but the cost of possibly expanding the policy to include all nonunion employees is unknown at this time.
While the budget surplus will likely be able to assist in funding these sorts of programs, the city still has other expenses it will need to address. As Crain’s New York reported, New York will also need to provide funding for the mayor’s proposed expansions to subsidized public housing and after-school programs. Spending at city hospitals has also increased in recent years. The report cautioned the city could still see modest budget gaps of $762 million in 2018 and $822 million in 2019.
How Questica can help with budget management
Cities looking to balance revenue with spending needs can utilize Questica’s configurable budgeting software for thorough analysis and more comprehensive forecasting.
Questica’s public sector budgeting tools include real-time tracking of city spending broken down by individual departmental budgets. The solution enables municipalities to create specific funding and expense goals while easily consolidating financial data from multiple sources. Through Questica, municipalities can set performance objectives, monitor salary and benefit expenses and project costs on capital improvement projects.
Municipalities should contact Questica today to learn how flexible, web-based budgeting software can contribute to informed spending decisions and maintaining strong budgetary performance.