High Degree of Uncertainty as Annual State of the City’s Economy and Finances Report is Released

Although circumstances will inevitably shift by the time the city adopts a budget in June 2023, the Annual State of the City’s Economic and Finances Report recently released by the New York City Comptroller’s office is designed to provide “a grounding for analysis as the city prepares to begin its annual budget.” However, this year’s report has a higher level of uncertainty than usual due to an economy far different than the pre-pandemic one; inflation at a level not seen in decades; and predictions by most economists of a global economic slowdown on the horizon because of the aggressive actions taken by the Federal Reserve and other central banks to tame inflation. Despite painting a picture of a strong but incomplete economic recovery, the report indicates that there are some key areas of concern; and while Fiscal Year 2023 revenues remain strong, the city continues to “chronically under-budget certain items as well as facing an uncertain financial risk related to the influx of asylum-seekers since the summer. While the Comptroller’s office projects a $256 million surplus in FY 2023, relative to the City’s Plan, projections over the next three fiscal years show additional risks of $980 million in FY 2024, $1.77 billion in FY 2025, and $2.44 billion in FY 2026, increasing projected budget gaps for those fiscal years beyond Mayor Adam’s forecast.

Source:    https://comptroller.nyc.gov/reports/annual-state-of-the-citys-economy-and-finances/