IBO Finds NYC Budget About $1 Billion Worse Than Mayor Does (Updated)
Mayor Bloomberg's getting really creative in his attempts in stim the city's failing economy: today he, Anna Wintour, Vera Wang and others announce that they'll hold "Fashion's Night Out" on Thursday, September 10, and call on rag traders "to keep their doors open late." They claim over 100 stores have agreed to stay in business till 11 p.m.
That's good, because the Independent Budget Office has just analyzed our finances and estimates that the city's budget is on course to achieve a $1.1 billion deficit for 2010 -- as opposed to the mayor's projection of a balanced budget -- and a $5.6 billion gap in 2011. *
While at his budget press conference in January the Mayor called for staffing cuts and new taxes to close the gap, IBO points out that Albany has to approve these measures, rendering them "uncertainties" at best. In any case, they say their tax revenue projections are "significantly lower than those of the Mayor's Office of Management and Budget," that they expect we'll get $400 million less in federal Medicaid relief than the Mayor predicted, etc.
And speaking of fashion, they don't seem to see the same benefit Bloomberg sees in his plan to end the sales tax exemption on clothing and footwear, because "sales taxes, especially on clothing, tend to be regressive" as poorer citizens' "spending on basic needs does not increase proportionately with income." So unrich New Yorkers aren't going to buy more clothes and thus increase tax revenue, no matter how late the stores are open.
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The sobering assessment ends with some political realism: "Given that this a municipal election year, the difficult decisions about spending cuts and tax increases that lie ahead are unlikely to be addressed until November."
Oh, and the state budget? Don't ask.
*Update 4:55 p.m.: Bollocksed some numbers here earlier. Also omitted a mild implication that the IBO recommends one course of action over another, which of course it does not.
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