Forecast shows bigger deficits, fewer jobs in city
As Wall Street continues its slide, dragging the city’s economy with it, analysts today projected unprecedented deficits that will likely mean more taxes and service cuts over the next year and a half.
A report released by the city’s Independent Budget Office predicted gaps of $7 billion in the fiscal years 2011 and 2012, some 40 percent higher than what Mayor Michael Bloomberg forecast in November.
“The city is looking at further spending reductions and/or tax increases,” said IBO Deputy Director George Sweeting.
The City Council has already approved a 7 percent property tax increase to close the current deficit and the Bloomberg administration has called for slashing the next two police classes, cutting the hours of fire companies and shutting down health clinics. In his November budget plan, the mayor also suggested raising income taxes.
Bloomberg will present a budget to the council on Jan. 30.
“The mayor has continually said that things have unfortunately gotten far
worse since he laid out the budget picture in early November,” said spokesman Marc LaVorgna. “We will have a full update of the city's budget outlook later this month when the mayor presents the preliminary budget.”
The IBO report projects that by the end of 2010, the city will have lost 242,700 jobs from its employment peak in early 2008.
The financial industry is poised to shed over 82,000 jobs, about 17 percent, by 2011, the report said.
Only a quarter of those jobs are expected to come back and the industry will look vastly different when the recession ends.
“The financial industry that emerges from the current crisis is likely to be smaller, less highly leveraged and less profitable,” the report said.















