NEW YORK - New York City’s budget for the current fiscal year (2011) is balanced, but the City’s financial plan faces significant risks and uncertainty, which could increase the City-projected budget gaps. The City faces $700 million of budget risks this year and the out-year gaps, which are already large, could reach $6.8 billion by fiscal year 2014, according to a report State Comptroller Thomas P. DiNapoli.

“The Mayor and the City Council have managed the City’s finances prudently and there are encouraging signs that economic recovery is taking root, but New York City still faces considerable risks associated with federal and State aid that may not materialize as hoped,” DiNapoli said. “Although the federal government has played a major role in helping state and local governments weather the economic downturn, future assistance may be limited.”

The report also found:

• New York City closed fiscal year 2010 with surplus estimated at $3.6 billion, but is still feeling the effects of the global economic recession.
• The recession cost New York City about 185,500 jobs; unemployment peaked in November 2009 at 10.5 percent, a 17-year high; and, tax revenues fell by $2.8 billion in fiscal year 2009, a 7.1 percent decline that is the steepest in at least 30 years.
• Although the State budget is not yet complete, preliminary estimates indicate it could reduce aid to New York City by approximately $1.1 billion.
• Strengthening tax collections and 49,800 jobs added to the private sector are among signs of a continuing economic recovery.
• Wall Street earned a record $61.4 billion during 2009 and earned $10.3 billion in the first quarter of 2010, the fourth best quarter on record.
• The City is counting on $279 million of additional federal Medicaid relief in the current fiscal year, which may not materialize, and next year the City faces the loss of $853 million in federal stimulus funds that have supported education.
• The large out-year budget gaps reflect the City’s reliance on non-recurring resources to balance the fiscal year 2011 budget, the scheduled loss of temporary federal assistance, and rising costs for debt service and fringe benefits.