In testimony before the City Council Finance Committee on March 4 sent to us by Harris Lirtzman, Ronnie Lowenstein, Director of the New York City Independent Budget Office, projected city surpluses for each year through 2019. Lowenstein also testified that the city has $2.75 billion in reserves.
The city will be swimming in black ink for as far as the eye can see unless there is some unforeseen economic disaster. Director Lowenstein testified:
Our estimates of city surpluses over the five-year period—and we project surpluses in all of them—are a clear indication of the city’s ongoing fiscal well-being. We project the city will end the current fiscal year with a surplus of $1.8 billion, $182 million more than anticipated by the Mayor. While the Mayor has, of course, presented a balanced budget for next year, our expectation for 2016 is a surplus of $1.3 billion. And we project relatively modest surpluses of more than $300 million in each of the ensuing years through 2019.
Concerning the reserves included in the budget, Lowenstein stated:
Although the current plan does not include a spending reduction program, the budget continues to hold substantial reserves, including roughly $2 billion in the Retiree Health Benefit Trust and a $750 million annual general reserve for 2016 through 2019.
I am no accountant but I do not believe these reserves are counted as part of the surplus.
These projections are coming from the normally conservative IBO. Projecting surpluses for future years is very unusual. No more out year forecasts of gloom and doom like in the past. What if tax revenues come in ahead of what is expected?
It is time to remind our readers yet again of UFT President Michael Mulgrew telling members that the cupboard was bare last May when he accepted a pathetic municipal pattern setting contract of 10% over 7 years with billions of dollars of healthcare savings thrown in for good measure. It looks like our union represents Mayor Bill de Blasio's administration more than its members.
One does not have to be a financial wizard to figure out that the city could have afforded to give municipal employees better salary increases in this round of collective bargaining and educators should not have to wait until 2020 to get arrears payments from the 2009-2011 round of bargaining where former Mayor Bloomberg shut us out.