Whatever happens in Washington as the deadline for a fiscal deal approaches, New York City is facing some daunting financial topography of its own in the coming year and beyond, the city's Independent Budget Office warned on Thursday.
While manageable budget gaps are projected, the budget office says, those gaps fail to account for two major variables: the costs of labor contracts and of the Hurricane Sandy recovery.
“There is little money set aside in the budget for contract settlements covering years prior to 2013, and the mayor's assertion that any wage increases covering those years would have to be paid for by productivity is impractical,†according to the budget office's latest fiscal outlook. “This stance may well be untenable for the next mayor.â€
Assuming that workers whose contracts expired in the 2010 fiscal year or later settled fo r annual compounding raises of 2 percent for the next two contract years and that teachers conform to the established pattern of two compounded raises of 4 percent, the cost to the city would be an additional $3.8 billion through next June alone â€" not counting more pension contributions and related expenses.
Regarding Hurricane Sandy, the budget report says, “The possibility that the city will indeed have to shoulder some of the cleanup and recovery costs - as well as expenditures to mitigate devastation from future storms - remains very real.†Also, the storm's long-term impact on the local economy is uncertain.
Substantial cuts to libraries and after-school programs are forecast, as are the shrinking by attrition of 395 Correction Department jobs next year and, in 2014, the elimination of vision screening for kindergarten students.
Among sources of new revenue, the analysis says, the city's Transportation Department expects to raise $6.8 million fro m 428 new multi-space parking meters in Lower Manhattan and an additional $4.8 million in 2014 by increasing parking meter rates south of 96th Street to $3.50 an hour, up 50 cents.
“Over the past few years the city has weathered a number of diverse challenges, from the economic storm of the deepest national recession since the 1930s to the post-Christmas blizzard that knocked out much of the city's transportation routes for days to the most recent superstorm,†the budget report concludes. “The fiscal difficulties that lay ahead for the next mayor and City Council may be more prosaic than a historic recession or mammoth storms, but the potential challenges remain no less real.â€
