City, State Comptrollers Warn Bloomberg About City Budget Funds

NY 1 - July 24, 2012

by Zack Fink

Both the City and State Comptrollers are warning Mayor Bloomberg, saying at a meeting of the state's Financial Control Board Monday that he's balancing the city's budget with money he doesn't have yet. NY1's Zack Fink filed the following report. At the annual meeting of the the state's Financial Control Board, Mayor Bloomberg presented a rosy outlook for the city's finances. He declared that New York City's financial growth is outperforming the nation's.

While there is no projected budget gap fo2013, the city's plan for raising raising revenue over the next three years involves the sale of 2,000 taxi medallionsr that will serve riders mostly outside of Manhattan. Last month, in response to a lawsuit, a judge temporarily blocked that plan.

"The sale, which is the subject of ongoing litigation, remains the largest risk in the current fiscal year at $635 million," said State Comptroller Thomas DiNapoli.

The city is relying on revenues from medallion sales, including $635 million in 2013, $365 million in 2014 and $460 million in 2015.

"Well, it's a lot of money, a significant amount of revenue," said New York State Budget Director Robert Megna. "If it didn't occur, the city might have to take other actions to make up for that revenue. But I think they are usually pretty conservative in their estimates."

A judge could rule on the suit at any point. The mayor told the board he is not worried.

"We are confident that the city will prevail in court and with ample time to enact our responsible plan for beginning selling these medallions over three years," he said.

City Comptroller John Liu echoed concerns about reliance on medallion sales but said that is not all.

"The city should have contingencies," he said. "The taxi medallion sale is not the only risk to the city's budget. For example, we pointed out that there is a far larger risk to the city's finances with the outstanding collective bargaining items. We have 200,000 city employees who are working without a contract. There is a financial risk to the city."

DiNapoli warned that New York State's overall economic growth was worse in 2011 than it was in 2010. It may be too early to know what will happen this year but unemployment was up in both New York City and New York State last month.