Latest analysis projects $1.8 billion more in revenues than OMB’s FY ‘23 and ‘24 estimates in Executive Budget, and stronger outyear revenues outpace OMB forecast
City Hall, NY – Today, the New York City Council unveiled its Fiscal Year (FY) 2024 Executive Budget Economic and Tax Forecast, with key findings on the national and local economies, as well as tax revenue projections. With a city economy proving more resilient than previously anticipated and driving stronger than expected tax collections, the Council now estimates slightly higher growth projections than its previous forecast. It forecasts $1.8 billion more in revenues for Fiscal Years 2023 and 2024, and greater revenues in the outyears, than is projected by the Mayor’s Office of Management and Budget (OMB) in the Executive Budget. The Council projects city tax revenues will exceed those estimated in the Executive Plan, with $926 million more in FY 23 and $909 million more in FY 24, additional revenue available to finance urgent needs and/or to bolster reserves. The Council’s outyear revenue projections exceed OMB’s by $942 million in FY 25, $1.34 billion in FY 26, and $2.55 billion in FY 27.
The Council’s complete report is available here.
While these latest numbers are higher than the Council’s previous Preliminary Budget forecast by $619 million for FY 23 and $337 million for FY 24, economic growth is still projected to slow. The Council’s tax forecast expects growth in revenues through the Fiscal Year 2024 Financial Plan to average 2.7% through the FY 2023 – 2027 forecast period. Though this is better than the Council’s estimate of 2.2% for the same period in its previous March Preliminary Budget Forecast, it is still weaker than the 5.2% rate realized over the past ten years. This slower growth will include a brief period of unemployment and job losses that the Council predicts will quickly be recovered, be even less severe than previously estimated, and occur later.
“While New York City is projected to experience slower economic growth, the Council’s latest economic and revenue forecast predicts that growth will still be slightly stronger than our last projections in March,” said Speaker Adrienne Adams and Council Member Justin Brannan, Chair of the Finance Committee. “It’s clear that our economy is resilient and built to withstand challenges without compromising investments in essential services for New Yorkers. While OMB’s Executive Budget projections came closer to the Council’s, validating our previous forecasts, the Council’s economists still estimate nearly $2 billion more than OMB in revenues for Fiscal Years 2023 and 2024, and stronger revenue projections in the outyears. Our budget response, like this forecast, recognizes that our budgets require careful management to account for risks and invest in the people of our city. Responsible budgeting means investing in the services that ensure New Yorkers succeed, not cutting programs that undermine their health and safety. As a Council, we will continue to prioritize delivering a budget that protects the fiscal health of our City and meets the needs of all New Yorkers and communities.”
In its FY 24 Preliminary Budget Forecast, the Council predicted a brief and mild downturn with tax revenue growth slowing but remaining positive. This latest forecast provides a slightly more optimistic economic outlook, driving a healthier tax revenue forecast, though growth will still be slower than New York City is accustomed to experiencing in recent years.