NEW YORK (Sputnik) — The report examined New York City’s financial strength by measuring the size of what it calls a budgetary cushion.
“Our analysis shows that we still haven’t restored the level of available resources we had before the recession. In fact, we’re at least $1.2 billion short of what we should have on hand to be truly prepared for an economic downturn.”
The budgetary cushion “allows the city to cover unexpected revenue shortfalls, or expenditure needs, with a minimum disruption to services,” the report explained.
As of the start of fiscal year 2016, New York City’s emergency budget was $8.5 billion. Based on rating agencies guidelines and historical experience in the past two recessions, the Comptroller’s Office determined the city’s budget is approximately 10.5 percent or $1.2 billion short of the desired range.
“In many ways, the City has recovered from the [last 2007-09] recession. But one way in which we haven’t fully recovered is in replenishing out budgetary cushion.”
Stringer added that cushion should be replenished as soon as possible, while the economic forecast is still positive.
During a conversation about economic stability at the Brookings Institution on July 8, 2015, US Treasury Secretary Jacob Lew said the United States is bound to eventually have a financial crisis similar to the one it faces in 2008.
“We cannot predict when the next crisis will be, but based on our experience, we can be certain that we will see financial instability again,” Lew stated according to a US Treasury Department press release.
The New York City Comptroller is the city’s Chief Financial Officer responsible for conducting audits and providing comprehensive oversight of the city’s budget.
