The Citizens Budget Commission has offered its take on New York City’s budget for fiscal year 2012, which started last Friday.
According to Maria Doulis, the budget was
a missed opportunity … to address the City’s fiscal problems in a lasting way – one that would … greatly reduce the need to propose other cuts in the future.
New York City’s finances suffer from a structural problem: spending growth is consistently projected to outpace revenue growth, resulting in repeated budget gaps.
While the 2012 budget is now balanced, the financial plan shows a gap of $4.8 billion in fiscal year 2013.
Driving the City’s spending growth are three items: health insurance, pension contributions and debt service. Spending on these items totaled $11 billion in 2005 and is expected to reach $23.1 billion in 2015.
While these expenses will double, the rest of the budget is projected to grow only 25 percent during this period. As a result, spending on the “big three” as a share of the budget will grow from 22 percent to 33 percent of total revenues between 2005 and 2015.
As these items claim a larger slice of the pie, less is available for other priorities. And that means service cuts will continue unless the City changes course.
The CBC offers solutions here. Cost-sharing with workers and retirees on healthcare costs, for example, could save $2 billion by 2015.