The New York City Comptroller's Office yesterday predicted that the city will likely end the 1993 fiscal year with a surplus, despite the continued loss of jobs and budget problems.
In a report based on two months of spending and revenue data, city Comptroller Elizabeth Holtzman said the city could use this possible surplus to address budget problems in fiscal 1994, which begins July 1.
"Although it is far too early in fiscal year 1993 to make a definitive judgment, the city may well be able to end this year with a surplus," according to the report.
Neither the report nor the comptroller's spokesman Louis Haber could provide an estimate on the size of the surplus.
Haber said "It's too early to say with confidence" the amount of the surplus. But Haber added that "at this point, the pluses outweigh the minuses."
The report attributed the possible surplus to the tougher fiscal management polices implemented by the city's Office of Management and Budget, as well as the low interest rate environment. Lower interest rates have allowed at a lower sell and refinance debt at a lower costs, reducing debt service expenses, the report said.
However, the report also says the economy is "still weak" and says that the city would likely loose 130,000 jobs in the 1992 calendar year.
"In terms of tax revenues, our view continues to be that the weak economy makes it possible that the city may face shortfalls of $127 million," the report says. "While this shortfall is small in proportion to total city tax revenues, given the weakness in the economy it should be monitored closely."
Despite the general tone of optimism in comptroller's report, city Budget Director Philip R. Michael said that it is too early in the fiscal year to determine if a surplus will materialize.
"If you add up the pluses and the minuses there is no real surplus," Michael said.
The existence of a budget surplus in fiscal 1993 would be a key element in the city's plan to reduce a projected $1.6 billion gap in its 1994 fiscal year budget.
In late August, Michael announced that the city would eliminate it planned use of a controversial mirror-bond refunding technique in fiscal 1994.
Michael said savings from a recent general obligation bond refunding and increased tax collection projections will allow the city to eliminate the $300 million mirror-bond refunding.
Yet even without the need for the mirror-bond sale, the budget office says it still faces a projected $1.3 billion gap in fiscal 1994.
Michael said the city is committed using any surplus found in fiscal 1993 to address the fiscal 1994 gap. So far, the city is counting on a rigorous cost-reduction plan to produce these savings, as well as state and federal aid, observers said.
A monthly financial status report issued on the city's finances earlier this week by the Office of the State Deputy Comptroller did not predict a budget surplus in fiscal 1993.
But the report says that "there have been a number of encouraging developments in the city's fiscal outlook," such as the gap closing initiatives and a tentative contract agreement with the city's fire-fighter's union.
