Entering budget season, New York City faces the tale of two time periods. CBC's latest blog, What to Look for in the NYC Fiscal Year 2024 Preliminary Budget, shows the specific steps New York City will likely take to manage its fiscal year 2024 budget gap, but then identifies the significant risks that make the mid-to-long-term outlook precarious and advocates for acting now to promote long-term stability.

Absent a recession coming soon (a real near-term risk), the path to balancing the fiscal year 2024 budget is fairly straightforward. There is likely to be $4.2 billion in available resources in fiscal year 2023—from higher tax revenues, unneeded annual reserves, and lower spending due to vacancies. These funds, combined with higher tax revenue and on-going vacancy savings in fiscal year 2024, would be sufficient to cover other spending needs and to close the fiscal year 2024 gap, while also leaving sufficient funds to deposit $1 billion into the Rainy Day Fund. 

Balancing the out-years, however, will be very challenging, given relatively large gaps and underbudgeted costs for both labor contracts and the cliff from ongoing programs now funded with non-recurring federal COVID aid and City resources. CBC's analysis finds that—even absent a recession—gaps could exceed $10 billion in fiscal year 2025 and $11 billion in fiscal year 2026, absent swift action to align spending with available resources.