The City’s Improving Economy
Tax revenues continue to rebound as the city’s economy continues a gradual recovery. NewYork City has regained 65 percent of the private sector jobs lost during the recession, while the restof the country has only gained back 36 percent. The city now is expected to recover all jobs lostduring the recession by the end of 2013, one year sooner than the rest of the country.
The Preliminary Budget assumes the City’s Independent Actuary will make a series of changes to the actuarial assumptions that determine the City’s pension bill, including an expectedchange in the assumed rate of return from 8.0 percent to 7.0 percent. The Preliminary Budgetestimates the changes will increase the City’s pension costs by $575 million in FY 2012 and FY2013 – bringing the City total pension costs to $7.8 billion in FY 2012 and $8.0 billion in FY 2013.The Preliminary Budget funds these increased costs by utilizing dollars the City specificallyreserved over the last two years in anticipation of the actuary’s actions and the increased costs. TheCity had reserved $1 billion in FY 2012 and $1 billion in FY 2013 in anticipation of the actuary’schanges and the City will use the reminder of the reserve funding to help close the budget gap.Since FY 2002, City funded pension costs have now increased by nearly 500 percent, risingfrom $1.3 billion to $8.0 billion in FY 2013.The City’s pension funds have produced an average return of 5.6 percent over the last tenyears and pensions systems across the country have reduced their assumed rate of return in recentyears. Pensions systems in Delaware, the District of Columbia, Illinois, Indiana, Virginia,Wisconsin and more have recently reduced their assumed rate of return.
The Preliminary Budget increases the City’s five-year capital construction program to $39.4 billion, up nearly $700 million.
The City’s full-time and full-time equivalent headcount in FY 2013 Preliminary Budget is291,326, a reduction of 20,478 positions (6.6 percent) since the start of the BloombergAdministration. The City’s December 31, 2001 full-time and full-time equivalent headcount was311,804.
The Mayor also announced today that while the Preliminary Budget for FY 2013 presents a balanced budget, New York City will still face budget gaps of approximately $3.0 billion in FY2014, $3.5 billion in FY 2015 and $3.4 billion FY 2016.-30-Contact: Stu Loeser / Marc La Vorgna(212) 788-29582