NEW YORK (BLOOMBERG) -- New York City’s budget surplus in the current fiscal year is $2.8 billion higher than Mayor Eric Adams’ forecast, reducing pressure on officials to cut services, the city’s budget watchdog said.
The higher surplus results from about $900 million more in anticipated tax revenue for the fiscal year ending June 30 and about $1.9 billion less in spending, according to the city’s Independent Budget Office. Spending will be lower than expected mainly for the city’s workforce and for sheltering migrants.
New York City’s current full-time employee headcount is 285,000, which is 5% lower than a 2020 peak of 300,000, according to the IBO.
The fiscal monitor also predicts that the city will have a $3.3 billion surplus for fiscal year 2025, which begins July 1, while projecting gaps of $6.5 billion, $5.8 billion and $5.6 billion for the following three years.
“Although the outyear budgets are not balanced, IBO’s projected gaps are well within the range that the City has closed in the past,” the IBO said in its latest analysis.
Adams, in a $109.4 billion preliminary budget unveiled in January, reversed some service reductions including police hiring and trash collection, citing nearly $3 billion in extra tax revenue and lower costs for migrant care. However, he maintained cuts to popular services like the city’s 3K preschool program and Sunday hours at city libraries.
Despite the cuts, the total 2024 budget has increased by 7% to about $116 billion, compared with the budget adopted in June, according to the IBO.
Separately, the IBO expects higher costs in future budgets for housing vouchers, overtime for police and corrections officers, firefighters and sanitation workers, and for education programs previously funded by federal Covid-19 relief.