State Comptroller Alan Hevesi released a report about the city's economy, noting that we had been benefiting from "a growing economy and sound management decisions made by the Mayor and the City Council over the past five years." Well, isn't that a little post-election political butt kissing? But the Mayor's budget was pretty cautious for the year.
A surplus of $1.9 billion is projected for the 2007 fiscal year (which ends next June), and the projected budget gap has decreased by almost $2.3 billion to just $510 million. Here are some of the factors:
- Wall Street profits are projected to reach $14.5 billion in 2006, an increase of 53.6 percent.
- The City added 56,300 jobs in the first ten months of 2006 compared to the same period last year—the best rate of job growth since 2000. If the job gain is retained for the rest of the year, it would be the sixth-highest increase since the fiscal crisis of the 1970s.
- The unemployment rate has dropped to 4.1 percent in October 2006—a record low—and wages have grown by about 8 percent during 2006.
- Commercial vacancy rates are declining and rental rates are rising. For example, vacancy rates for prime midtown properties are approaching 7 percent, compared with 10 percent during 2004.
But after the 2007 fiscal year, there may be problems: Nondiscretionary spending will be a higher percent of city spending and debt service will increase by 63% between 2006 and 2010.
