Business

DiNapoli: New York City Economy On The Rebound

Buildings are seen on West 56th Street - New York, NY - Jul 24, 2010 - Photo: Evan Bindelglass / WCBS 880

Buildings are seen on West 56th Street – New York, NY – Jul 24, 2010 – Photo: Evan Bindelglass / WCBS 880

haskell_feature Peter Haskell
Peter Haskell joined WCBS in 1994. This followed stints at WCTC Radio...
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ALBANY, NY (AP / WCBS 880) - State Comptroller Thomas DiNapoli reported Wednesday that New York City’s economy is recovering faster from the recession than the rest of the state and nation, but the higher tax revenues still won’t close the city government’s upcoming budget gaps.


WCBS 880’s Peter Haskell reports

DiNapoli’s office said private-sector employment in the city rose 2.5 percent from December 2009 through October, more than twice as fast as the national rate, regaining almost half of 176,700 jobs lost in the downturn. Those 76,300 jobs accounted for 88 percent of the total statewide gain.

Preliminary data showed the securities industry belatedly adding jobs, slower than lower-paying retailing, health care and restaurants, as Wall Street earned $21.4 billion during the first three quarters of 2010.

That exceeded predictions, though the 2010 cash bonus pool is expected to be smaller than last year’s bailout-fueled $20.3 billion record. Regulatory reforms also could result in more deferred bonuses, the report said.

“With only two months of job gains and continued reports of firms downsizing as they restructure, we are reluctant to conclude that Wall Street is adding jobs on a sustained basis,” the report said. “However, if the industry is adding jobs, the state and city economies (and tax collections) will surely benefit.”

The report noted city forecasts of a nearly $1.2 billion budget surplus in the 2011 fiscal year, followed by a gap of $2.4 billion in 2012 rising to $5.6 billion in 2014 even as Mayor Michael Bloomberg proposes cuts in municipal agency spending and staffing.

“New York City is taking steps to control spending, but maintaining core services will be difficult in the coming years,” DiNapoli said. “The federal stimulus funds are going away and the city is expecting an unrealistic level of help from the state for education funding. All of this means hard times for the city’s schools and its neediest citizens.”

The city’s accrued liability for pension and other post-employment payments was $75 billion as of June 30.

As of September, the number of city residents enrolled in Medicaid had grown to 2,865,675. City-funded Medicaid expenses were expected to rise from $5.1 billion this year to $6.6 billion in
2014.

City debt service was expected to grow from $5.2 billion in 2011 to $6.7 billion by 2014.

The city’s budget director on Wednesday told agency heads they would need to cut their 10-year capital budgets by 20 percent to reduce future debt service costs.

Bloomberg, who last month announced the ninth round of cuts to city services in the past three and a half years, has repeatedly warned he is far from finished with the budget knife.

He reiterated Wednesday that the city still has to cut more to make up for the estimated $2.4 billion deficit – a number that could be even higher depending on state aid.

The state budget has a projected $9 billion deficit for the coming fiscal year.

(Copyright 2010 by The Associated Press.  All Rights Reserved.)