New York City Comptroller Elizabeth Holtzman released a revised report yesterday saying the city now faces a $257 million to $357 million budget gap in its fiscal 1992 budget.
Her estimates are much higher than the Dinkins administration recently forecast, and she urged Mayor David N. Dinkins to address the budget gap in a revised four-year financial plan due in January.
Last week, state Comptroller Edward V. Regan released a report saying the city could face a $342 million budget gap in fiscal 1992, caused primarily by higher social spending, falling revenues, and the potential impact of reduced state aid.
The city comptroller in October had projected a $419 million gap for fiscal 1992, which ends June 31.
Mayor David N. Dinkins and his budget office on Nov. 6 had projected a $210 million gap and submitted a modified financial plan for fiscal 1992 that included $210 million of actions to close the gap. The Dinkins administration also presented a preliminary financial plan for fiscal years 1993 to 1996. A revised version of that plan and additional plans for fiscal 1992 are expected to be presented by Mayor Dinkins on Jan. 16.
Based on the city comptroller's estimaes, the fiscal 1992 actions pared the gap to about $209 million, but the report noted that recent developments have prompted her office to recalculate the gap to reach as high as $357 million. The comptroller said this estimate was calculated to include both the city an the state's budget problems.
According to the city comptroller, those developments include: $30 million in additional spending for medical assistance costs in fiscal 1992 not included in the plan; revenues from a special lottery for a new criminal justice program, "Safe Streets, Safe City," are forecast to fall $9 million below the $25 million projected by the administration plan; revenues from small business taxes could be $10 million less than projected by the financial plan; and personal income tax collections and real property tax collections could be $60 million and $49 million lower than projected in the city plan, respectively.
In addition, the state's budget crisis is likely to hit the city even harder. In the preliminary spending reduction proposal offered by Gov. Mario M. Cuomo to close a $875 million gap in the state's fiscal 1992 budget, which ends March 31, the city may lose $100 million in state aid, the city comptroller said.
And the report says the city's economy remains in the throes of the recession, as evaporating jobs continue to add to a burgeoning unemployment rate. In October 1991, there were an estimated 3.39 million jobs in the city, down 170,200 from October 1990, the report notes. In additon, the report says that from Septembers 1989 to October of this year total employment fell 233,000, or 6.4%. The private sector portion of that figure totaled 220,000.
The city comptroller also said that to maintain a balanced city budget, the Dinkins administration should have a fully funded reserve of $150 million in the budget. The original fiscal 1992 financial plan included reserves of that much, but in the modified financial plan unveiled on Nov. 6 the reserve figure was pared to $66 million.
The city comptroller's report says it would be "prudent" given the current economy for the general reserve to be funded at $150 million in the January plan.