IBO Report: A Re-Estimate of Mayor Adam’s Executive Budget
The Executive Budget released by Mayor Eric Adams on April 26, 2022 delivers a shift in tone than that of his Preliminary Budget outlined just two months prior according to the recent report by the New York City Independent Budget Office (IBO). In contrast to the more restrained Preliminary Budget released in February that focused on reducing city spending, with the introduction of a $5 billion savings program over five years, the Executive Budget proposes to create almost an equal amount of new city-funded needs over the same period.
Currently the city’s recovery from the pandemic-induced recession continues to surpass earlier expectations — likely prompting the shift, as strong April personal income tax collections increased the IBO’s tax forecast for fiscal year 2022 by 5.4%; and recent revisions to employment data reveal that the city is on track to reach pre-pandemic figures by early 2024 — more than one year earlier than the IBO predicted in March.
However, several potential fiscal hurdles exist in the years ahead such as the looming concern of slowed or negative economic growth due to planned interest rate increases by the Federal Reserve to reduce inflation; as well as the outstanding settlement of New York City’s labor contracts, all of which are nearly expired.